LEGAL ASPECTS OF THE PLAN OF CHICAGO (continued 2)

The constitutional limit of municipal indebtedness does not mean that every public corporation has power to incur debts to that amount. Municipalities have no greater powers than the legislature confers upon them. There is no constitutional limit on the amount of taxes that the legislature can authorize municipalities to levy.[90] They may incur only such debts, not exceeding the constitutional limit, and levy such taxes as the general assembly authorizes them to do. Several municipal corporations, however, may be created under legislative authority for different purposes, embracing all or part of the same territory, and each of these overlapping municipalities may be given power to levy taxes and incur debts up to the constitutional limit. To restrain the increasing burden of taxes, the legislature in 1901 passed the so-called Juul law, designed to limit the aggregate taxes which might be levied upon any community in any one year to five per cent of the assessed valuation of property therein; but the constitutionality of this statute has been questioned and the amendments of and numerous exceptions to its provisions made by the legislature have left its operation, if not its continued existence, so doubtful that its repeal has been sought on divers occasions.[91]

The county of Cook is permitted to levy taxes not exceeding seventy-five cents on every one hundred dollars, without popular vote, and to levy any additional taxes voted by the people. County bonds may be voted by the people in any such amount as not to cause the total debt of the county to exceed five per cent of the assessed value of the property therein. The assessed value for the year 1908 was $514,730,186, of which five per cent is $25,736,509. Up to that limit the county might become indebted by vote of the people. The present bonded debt is $9,360,000, and the floating debt averages about $1,600,000. Without aiming at nicety of detail, it may be said that the county has at present a borrowing capacity, in round figures, of $15,000,000. The operation of the Juul law, however, now reduces the tax available for the general expenses of Cook County to sixty-five cents on one hundred dollars; and the increasing demands upon the county would probably necessitate a modification of this law, so as specifically to exclude from its limitations the taxes necessary to care for additional bond issues and provide for future maintenance of county parks or boulevards.

The city of Chicago is practically indebted at all times to the constitutional limit of five per cent of its assessed valuation, and has been given power by the legislature to levy an annual tax for corporate purposes not exceeding two per cent on that valuation, exclusive of taxes levied for the payment of bonds. Under the operation of the Juul law, the maximum rate has been cut down to one and eight-tenths per cent. The assessed valuation of city property for 1908 was $477,190,399. A two per cent tax on that amount is $9,543,808, and a five per cent indebtedness would be $23,859,520. The legislature could authorize a higher annual tax, but could not, under the constitution, increase the limit of indebtedness unless by means of some change in the method of assessing the property on which the limitation was to be computed.[92] One of the chief reasons for asking a new charter was to increase the bond-issuing power of the city by changing the basis of computation of the limit of indebtedness.

The taxing powers of the three park districts in the city of Chicago are contained in a mass of separate laws, which authorize the issuing of bonds for particular purposes and the levying of taxes to pay the interest and retire the principal. The park boards could be authorized by the legislature to incur debts somewhat in excess of their present bonded liability, without infringing the provisions of the constitution; but here also the tax limitations of the Juul law would have to be modified unless maintenance expenditures were scaled. The assessed valuation for the year 1908 of property in the West Park district was $105,614,809, of which five per cent is $5,280,740. The present bonded debt of the West Park board is $3,270,000, leaving a possible margin of about $2,000,000 of additional indebtedness that the legislature could authorize to be incurred by the board.

An entirely new taxing body could, with the consent of the voters, be created by the legislature, having jurisdiction over all or part of Cook County. That body, if properly constituted, could be invested with power to levy such taxes as might be deemed advisable, and with power to issue bonds up to the constitutional limit of five per cent of the assessed valuation. It is also to be borne in mind that by some slight changes in the method of fixing the assessed valuation of property, which is now arbitrarily defined as one-fifth of the full valuation, the legislature could largely increase the borrowing power of all the taxing bodies.

Large improvements need not only extensive borrowing powers, but the distribution of the burden over a long series of years. While twenty years has been heretofore deemed the limit of time which ought to be allowed for paying any debt incurred by the issue of bonds, it may be thought that the radical changes contemplated by the Plan of Chicago are of such unusual magnitude and of such permanent character that justice might demand distribution of the burden over more than one generation. Upon that view, bonds running for a longer period might be thought reasonable. The present constitutional limit of twenty years is, however, absolute, and an amendment to the constitution would be required to enable any municipality to issue bonds for a longer term.

CONCLUSIONS

From the foregoing examination of the legal aspects of the Plan of Chicago it appears

First: That without any additional legislation many of the recommendations of the Plan can be adopted and practical steps be taken to carry them into effect;

Second: That the legislature has ample power to grant either to the city or to other governmental agencies such additional authority as may be necessary to carry out all of the recommendations of the Plan as fully and as rapidly as may be found wise; and

Third: That additional authority, and especially a substantial increase in the local bonding power, is essential to the effective accomplishment of the most important of these recommendations.

It remains for the people of Chicago, through their legally constituted representatives, to decide upon the wisdom of the suggestions and to adopt them in the order of their relative importance and availability. The necessary funds can no doubt be secured as rapidly as it can be clearly shown that their expenditure will result in real advantage to the individual citizens who constitute “the public,” and upon whom rests, directly or indirectly, the burden of expense. In the last analysis it must be clear that a community which makes wise expenditure for public works not only imposes no real burden upon private property, but increases the value of all private property within its limits. Such a community should be given adequate authority to levy taxes and incur debt, subject always to such intelligent supervision of expenditures as will effectively guard against extravagance and waste. Certainly, any limitations upon a progressive municipality should be broad enough to make it possible to undertake such public enterprises as are recommended in this Plan.

Fortunately, this is entirely possible in Chicago within the constitutional limitations upon municipal indebtedness. By consolidating the local authorities within the city of Chicago under the provisions of the so-called charter amendment to the state constitution (Article IV, Sec. 34), the present bonding capacity of the city can be multiplied five times, less the aggregate indebtedness of the consolidating bodies, and subject to such limitations as may be imposed in the consolidating act. By merely changing the statutory method of fixing the assessed value of property, the present bonding power will be proportionately increased. By utilizing the county for making such improvements as it may well be authorized to make, we can secure additional bonding capacity even greater than that available through the agency of the city. There would seem to be no valid objection to an act authorizing any county which chose to adopt its provisions by popular vote to acquire, construct, and maintain parks and boulevards, with all the powers (including those of eminent domain) already recommended as to cities and park or forest-preserve districts, and with appropriate increase of taxing and of bonding powers subject to popular approval. For many, if not all, of the purposes now sought under the Forest-Preserve Act, the county of Cook would seem to be the appropriate and available agency. It would be a distinct public gain to enlarge its functions so that membership on its board of commissioners would both demand and permit the highest type of public service. If the Forest-Preserve Act, or an act of this general character, is constitutional, the agency thereby provided is also available for many of the purposes of the Plan, and could be given additional bonding power subject only to the constitutional limitation. It will thus be seen that ample bonding power for all the purposes of the Plan can be conferred by the legislature. Significant precedents are not lacking to justify the expectation that private generosity will co-operate in the accomplishment of some of the recommendations here made for the practical and effective promotion of the public welfare. Some of the conspicuous benefactions of this general nature, already made by public spirited citizens of Chicago, have been mentioned earlier in this volume,[93] and the movement for small parks and playgrounds has already received very substantial assistance from the generosity of private individuals. To other individuals other features, such as outer parks or the improvement of tenement conditions, may make an equal or greater appeal.

Some increase in the bonding power of the city is, however, essential to the effective accomplishment of certain park and street improvements which the city itself should immediately undertake. The two great connecting links—that between the North and South Divisions at Michigan Avenue, and that between the West and South Divisions by means of Twelfth Street—might well proceed immediately; and yet to raise the entire cost of these improvements by special assessment, spread over a wide area, would be to arouse vigorous opposition both in and out of the courts. This contest should, if possible, be confined to the adjustment of damages and benefits to the property directly affected and which abuts on or is in the immediate vicinity of the improvements. Property which is clearly benefited in a special and peculiar manner should be assessed its fair share—and only its fair share—of the cost of these improvements, and the remaining cost should be borne by the city at large as a public benefit. The present machinery of the special assessment law is adequate for all these purposes. What is needed is sufficient bonding power to enable the city to issue bonds for the portion of the cost assessed as “public benefits.”

The power to condemn or otherwise acquire easements, and to acquire and thereafter sell the fee simple title to property in the immediate vicinity of public parks and boulevards, subject to such easements as may enhance and protect the public use, would be of great advantage in the practical accomplishment of many improvements, and might aid in overcoming serious financial obstacles. The available space will, however, not permit the discussion of the particular instances to which this suggestion especially applies.

It remains only to consider the official agencies which are most desirable and most available for the effective working out of the Plan. As a matter of theory, the best results could be achieved through a consolidation of the city and county governments, or by placing the entire metropolitan district, which constitutes the real city of Chicago, under a unified municipal administration, endowed with broad powers of local self-government, including the power to levy taxes and incur indebtedness. Practically, however, the enlargement of the powers of these two governing bodies—the city and the county—within the limits permitted by the present constitution, is probably the most available method of attaining desirable results. As a means of co-ordinating the two it is respectfully suggested that a permanent Commission on City and County Plan should be created by joint resolution or ordinance of the city council and the county board. This commission should contain appropriate representation for each body, and it should be charged with the duty of reporting to each its recommendations as to all matters falling within the general scope of a city and county Plan. It might well be ordained by the city council that no public buildings should be hereafter located or erected, and that no parks should be acquired and no streets or boulevards be opened, without a report from the commission or the city members thereof. The commission might be composed entirely of city and county officials, or might contain some representation of those who are not public officials but who are particularly interested in and particularly qualified for its work. The city board of local improvements and the present park boards or any future consolidated park board should be directly represented.

Whether the functions of the Commissions on Municipal Art and Small Parks should in the interest of simplification and efficiency be transferred to such a Commission on City and County Plan might be profitably considered. While such an advisory commission would be entirely extra-legal, it would be of distinct service in securing the harmonious development of a single comprehensive Plan for the city of Chicago and its environs.

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