Leaving out of consideration financially self-sustaining municipal investments, like many municipal water works, which are usually reckoned apart from the municipal debt and which do not impose a burden upon the tax payers as such, the temporary relief from financial difficulties secured as above described, by extending the limit of a city’s borrowing power or by expedients such as the contract method of paying for land, leaves the ultimate burden on the municipality and substantially distributes it over the whole of the taxable property of the city in accordance with valuation. Conservative policy will never allow a very great stretching of the debt limit, and any considerable increase beyond the customary annual tax rate is bitterly resisted. Sources of municipal revenue other than the general property tax are practically negligible in this connection in American cities. It is therefore very important to relieve the general tax payer of a portion of the cost of public improvements wherever they can be found to be of so much special benefit to the owners of a limited area as to justify a special assessment.
SPECIAL ASSESSMENTS
1. DEFINITION
“A special assessment is a compulsory contribution paid once for all to defray the cost of a special improvement to property undertaken in the public interest and repaid to the government in proportion to the special benefits accruing to the property named.”[31]
Though a special assessment is an exercise of the taxing power, it differs from a tax in two particulars: First, the nature of a special assessment makes it a charge for a real benefit to property and one which can be more or less accurately measured in money values; second, it has been almost uniformly held by judicial decisions that special assessments need not conform to the constitutional requirement that taxation shall be equal and uniform.
The equity of this species of taxation is defended on the theory that the individuals of the community whose holdings have been made more valuable by the expenditure of the community’s money should repay at least some portion of that outlay. Specific application of the principle may produce an unfair result. If an assessment for street improvement is figured by the front foot, it is unfair to the man with a long, shallow lot. If it is levied in accordance with the area of lots, it is unfair to the land with much depth and small frontage. It is impossible to devise any method of taxation which distributes the financial burden automatically with perfect and indisputable justice. If a lot which was worth $1,000 before a public improvement can be sold for $1,100 after it, and if the lot is assessed any amount up to $100, the method of arriving at this amount is immaterial, since the result is just enough.
2. HISTORY
A special assessment law enacted for New York City in 1691 is said to be the first true special assessment law in the United States, and to have been based on a law passed in 1667 to aid the rebuilding of London after the great fire of 1666.[32] This law of 1667 was one of three special assessment laws enacted in Great Britain before 1900 and their use was very infrequent. But in 1658 the general court of Massachusetts appointed a committee “to lay out the way through Roxbury lots to Boston farms, and to judge what is meet satisfaction to the proprietors for the way, and that they have power to impose an equal part upon all such of Boston or other towns as shall have benefit of such way.”[33] Whatever may have been the origin of the principle, because of its general use and extensive development in the United States it is recognized even in Great Britain as an “American device.”
The New York law of 1691 assessed the cost of street pavements and sewers on the property specially benefited, in proportion to the benefits received. Pennsylvania passed a similar law in 1700: “To defray the charge of pitching, paving, graveling, and regulation of said streets ... each inhabitant was to pay, in proportion to the number of feet of his lots ... adjoining, on each or either side of the said streets.”[34] Massachusetts in 1709 and 1761 provided that “Persons receiving any benefit from common sewers, either direct or remote, were obliged to pay such proportional part of making or repairing the same as should be assessed to them by the Selectmen of the towns.”[35] The old New York law was little used until 1787 when it was amended and made somewhat more definite.[36]
The adoption of the principle was extensive after the war of 1812. The following dates indicate about the time when the legislation was passed in different states and territories, the dates usually indicating the incorporation of the principle in the charter of some city, followed usually by court decisions in the main upholding the assessment. The active use of the special assessment principle may be considered as dating in New York from 1813; Kentucky, 1813; Michigan, 1827; Pennsylvania, 1832; Louisiana, 1832; New Jersey, 1836; Ohio, 1836; Illinois, 1837; Maryland, 1838; Connecticut, 1843; Wisconsin, 1846; Indiana, 1846; Mississippi, 1846; California, 1850; Oregon, 1851; Missouri, 1853; Rhode Island, 1854; Iowa, 1855; Delaware, 1857; Kansas, 1864; Massachusetts, 1865; District of Columbia, 1865; Virginia, 1866; Vermont, 1868; West Virginia, 1868; Minnesota, 1869; New Hampshire, 1870; Texas, 1871; Maine, 1872; Nebraska, 1873; Florida, 1877; Georgia, 1881; Nevada, 1881; Washington, 1883; Alabama, 1885; North Carolina, 1887; North Dakota, 1887; South Dakota, 1887; Montana, 1887; Idaho, 1887; Wyoming, 1887; Utah, 1888; Colorado, 1889; Oklahoma, 1890; North Mexico, 1891; Arizona, 1893.[37]