REPORT OF COMMITTEE ON CONSTITUTIONAL CONVENTION,

plied to the column in the Assessor's book headed "Full value" as equalized by the County Board of Review and State Board of Equalization, or to the one-fifth part thereof set down in the column headed "Assessed value" as so equalized. The Court held that the limitation applies to the assessed value, which is one-fifth of the full value. It would serve no useful purpose to attempt to show that the Court might with equal or better reason have held that the limitation should apply to the full value. Suffice it to say that the construction placed by the Supreme Court upon the constitutional provision in question is a source of great embarrassment to the City of Chicago. Even if Chicago had sufficient revenue to allow it to make adequate provision for the cleaning of her streets, which admittedly it has not, one of the first requisites of cleanliness is good pavements. The method of providing such by special assessment, especially in the matter of repairs and renewals, has proved to be slow, unsatisfactory and unbearably burdensome to property owners.

The bridges of the city are in a dilapidated condition and a positive menace to the lives and limbs of those using them. Needless to remark that only by the issue of bonds. can the city obtain the means for such and similar necessary improvements. Nor does it appear right that, even if the means for such improvements for the benefit of this and future generations could be raised by taxation, the present generation alone should bear the burden of providing for the

same.

Municipal ownership of public utilities--a principle upon the wisdom of which we express no judgment, but which was endorsed in no uncertain terms by the voters of Chicago at the last spring election-is practically impossible, unless the city have power to issue bonds pledging generally the credit. of the city. But far from being able to increase our municipal indebtedness, Chicago has already considerably exceeded

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the constitutional limit. Judgments against the city aggre gating about four million dollars remain unpaid and without means of payment. These judgments draw interest at the rate of five per cent per annum, whereas bonds at a rate of three per cent interest per annum would probably command a premium.

The same constitutional limit applies alike to the smallest village of the State and the second city of the union in population and importance. The fact is that Chicago's debt is ridiculously small compared to that of any city of size in the world. The demand that the city be relieved from the burden of this constitutional limitation is well nigh universal.

Moreover if the unification of all municipal governmental functions within the limits of Chicago, which is so devoutly to be wished, be effected, it would result in the addition to the city debt of all the debts of the governmental bodies wiped out, and would leave the city the only debt incurring body where there are now several. This arrangement alone would make it imperative that the debt limitation upon the city should be extended.

If the legislature had the constitutional power to provide that the taxes in Chicago or Cook county should be assessed upon the full value while permitting the assessment of taxes in the country upon a fractional part of the full value the constitutional difficulty now existing would be removed. But this cannot be done constitutionally. Section 1 of Article IX of the Constitution requires the general assembly to provide state revenue by the levy of taxes upon the value of all property in the state. Section 6 of the same Article provides that the general assembly shall have no power to release or discharge any county, city, township, town or district whatever, or the inhabitants thereof, or the property therein, from their or its proportionate share of taxes

REPORT OF COMMITTEE ON CONSTITUTIONAL CONVENTION.

to be levied for state purposes, nor shall commutation for such taxes be authorized in any form whatsoever. Clearly, therefore, it is the purpose of the Constitution that revenues for the state be raised by a general tax levied upon all the property as assessed by the local assessors. Consequently the legislature is without power to provide for different standards of valuation of property for assessment purposes in different parts of the state.

This leads us to a consideration of the fundamental difficulty of our revenue system which brought about the expedient of extending the taxes upon one-fifth of the full value resorted to by the legislature in 1897.

The fundamental principle upon which revenues, both for state and local purposes, have always been obtained in Illinois is that all property, both real and personal, should be assessed at its fair cash value by a local assessor. The theory is ideal. Experience for a long series of years under the most varying conditions has proved it to be thoroughly impractical. The requirement of the Constitution that state revenues be raised by a pro rata tax upon local assessments resulted in placing a premium upon undervaluation. Under this provision the assessor who returned his estimates at the lowest per cent of the true value of the property assessed obtained for his community the least burden of taxation for state purposes.

The assessor who violated his oath the most by getting the furthest away from a fair cash value served his constituents the best. But when once the standard of valuation at the real fair cash value is departed from, tax payers are left to the mercy of the assessor, whose mercy too often has a fair, or perhaps an unfair cash value.

In order to remedy these evils Governor Oglesby in 1885 appointed a tax commission which a year later filed its report recommending a number of important changes in the revenue laws. The commission stated in its report that they

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could suggest no remedy for this system of undervaluation by local assessors unless some method could be devised for divorcing the levying of taxes for state and local revenues. Such separation of state and local taxes appears to be impossible under the present Constitution. The complete separation of state from local taxes should be the foundation stone of a new revenue system for this state. It is not for us to devise the new system in any detail, but we would suggest that a just method of taxing the franchises and some classes of property of corporations might be devised which would furnish ample revenue to the state, leaving revenues for local purposes to be derived by taxation upon property within the locality.

At any rate it is manifest that under the present Constitution the legislature is powerless directly or indirectly to provide a different limit of indebtedness for the city of Chicago than for the smallest village of the state.

In this connection we desire to call your attention to another constitutional provision respecting municipal indebtedness which appears to us entirely out of date. Under Section 12 of Article IX municipal bonds must be made payable within twenty years. The municipality is required to provide for the collection of a direct annual tax sufficient to pay not only the interest, but to provide a sinking fund for the discharge of the principal when the bonds mature. This twenty year limitation might have been wise in 1870. A fifty year limitation would be more nearly in accordance with the most advanced financial theories of the present. Long term bonds have come to be regarded as more desirable investments than short term bonds. They command a higher premium. Moreover they would make it much easier for the municipality to build up the sinking fund for the discharge of the principal.

While there are other provisions of the present Consti

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tution which appear to us to be of doubtful value, we have confined ourselves to a consideration of undoubted evils which cannot be cured except by changes in the Constitution. We believe, however, that the time has come when the Constitution of this state should have embodied in it certain affirmative governmental principles, thus placing them beyond the peril of political exigencies. We believe that the principle of the merit system in the Civil Service as embodied in the City Civil Service law should be extended by constitutional provision to the subordinate positions in all state and county offices and institutions, and should be made compulsory instead of optional as applied to the cities of the state. We further believe that the system of paying public officers by fees instead of salaries should be abolished by constitutional provision.

Theoretically the changes in the Constitution necessary for the enactment of the reforms spoken of, may be obtained by amendments. But the history of attempts to obtain the adoption by the legislature of propositions for amendments to the Constitution shows that this method is extremely difficult, not to say entirely impractical.

In the first place, under Section 2 of Article XIV, the General Assembly has no power to propose amendments to more than one article of the Constitution at the same session, nor to the same article oftener than once in four years. This means that any number of amendments might be proposed at the same session and submitted to the vote of the people at one time, provided they all refer or are germane to the subject matters covered by one and the same article.

The Constitution consists of the preamble, fourteen articles, four separate sections and a schedule. The limitations to be removed in order to effect the necessary reforms that we have suggested are found in Article IV, Section 22, forbidding special legislation as to county, town and city affairs.