100 TAX FREE TOWNSIN U. S.
100 Tax Free Towns in V. S. [BY EDITORIAL RESEARCH REPORTS] IN the United States, there are about 100 small cities that congratulate themselves on being "tax-free towns." Their residents pay...
...ELECTRIC RATES IN TAX-FREE TOWNS (Typical monthly bill for 100 KWH, Residential Service, Jan...
...They hold that the property owner is best able to bear the burden...
...9,521 5.75 4.90 Duncan...
...The corresponding charges in five of the most widely-publicized tax free towns are shown ln the following table...
...On the other hand, it is said that supporting local government with utility profits gained through relatively high rates spreads the cost more evenly over the whole population since there are many more consumers of electricity than there are owners of property...
...The utilities that support their municipal services are mostly small electric light and power plants...
...The national average charge for 100 kilowatt hours of electrical energy for residential use on Jan...
...1, 1939 (the latest date for which comparable figures are available) was $4.22...
...and Duncan, $25,-235 or 22.1 per cent...
...On the Pacific coast where public and private plants contribute practically the same proportion of the value of their total outputs, the publicly-owned plants are able to offer considerably lower rates...
...In the South Atlantic states where public plants turn over 49.1 per cent of the value of their outputs to governments, compared to 13.5 per cent turned over by private systems, the private systems are able to offer the lower rates...
...1, 1939) Population, 1930 Charge State Average Charge* Logansport, Ind...........18,508 $4.45 $4.24 Ponca City...
...Okls,..........16,136 5.40 4.60 Chanute...
...Costs of police and fire protection in the tax-free towns are less than in congested urban areas, where the tax-free townspeople are envied by heavily burdened taxpayers, but these and other municipal services do cost something —and that something is represented In most cases by an addition to monthly bills for electric service, • *•••« An examination of Federal Power commission statistics shows that consumers of electrical energy In the tax-free towns pay charges for current which are considerably in excess of the national average and also in excess of the average charges of private companies in towns of corresponding size in their own states...
...The amounts involved in each of the other towns were: Logansport, $131,-562 or 25.5 per cent...
...Their residents pay nothing to local tax collectors for the support of municipal services...
...Tax-free towns are freaks in the public ownership field, but they illustrate the extreme of one method of handling the potential savings inherent in public ownership—application of profits to reduce local taxes...
...There is no general agreement as to the relative merits of the two methods of handling the dividends of public ownership...
...All of the tax-free towns are in the "less than 50,000" population group-half of them in Oklahoma...
...In Chanute, the city government received a total of $84,500 in cash and free services or 47.1 per cent of the value of the plant's total output...
...Ponca City's plant in 1938 turned over to the city $202,990 in cash and $25,342 in free services, or 77.4 per cent of the value of its total output for the year...
...An alternate method ls to apply the savings toward reductions of electric rates...
...Kansas ..........10,277 5.19 4.40 Blackwell, Okla...
...The result is that average rates of publicly-owned systems are lower than those attained under private ownership—7.6 per cent lower in the case of the residential consumer using 100 kilowatt hours a month...
...Many advocates of public ownership maintain that service should be provided on an "at cost" basis by public plants, with the lowest possible rates to the consumer, leaving the support of government in general to the traditional revenue sources...
...8.363 5.20 4.90 ?By private companies in towns of same population group...
...Blackwell, $88,498 or 42.7 per cent...
...all town expenses are met from the income of publicly-owned utilities...
...Okla...
...In the public-ownership cities of the country as a whole these two methods are employed in combination...
...A very definite correlation between relative rates and relative contributions by the tw-o classes of ownership to support of local government Is shown by Federal Power commission statistics...
...At the same time, public plants on the average contribute 26.8 per cent of the value of their total output to governments, while private plants contribute only 14.4 per rent...
Vol. 10 • March 1940 • No. 12
