The Guardian (And Evening Star, with which is incorporated the West Coast Times.) SATURDAY; MAY 27, 1939. RATING ASPECTS.

Hokitika Guardian, 27 May 1939, Page 4

The Guardian (And Evening Star , with which is incorporated the West Coast Times.) SATURDAY ; MAY 27, 1939. RATING ASPECTS.

The revaluation of the Borough of Hokitika calls attention to rating aspects, and the equities of the various systems under which revenue may. be collected. Revenue is an important matter to the Council in the first place, pmd to the ratepayers in the second, in that the latter expect, if they do not certain amenities in civic affairs for which more or less substantial expenditure is required. The Council realising its obligations would be disposed in most in-

stances to meet the demands of ratepayers, for it is not usual to ask lor works unless required obviously, but the Council is governed by the state of the finances. There are three systems under which valuations are made, and on which rates may be struck, namely: Annual value (the rental value)', unimproved value (land value), and capital value (improvements and land value combined). Hokitika elected by a poll, to rate on unimproved value, and the annual rate is levied on that valuation, in the revaluation, it is apparent there cannot be a mark°d increase in values from the unimproved point of view, and because of that the fate return may not show any very substantial increase. But there will be a large increase in capital value, because of the neqv and. iiut proved buildings a,i»,d this, fact has a bearing on the Borough finance. That is because the hospital levy is based on capital values uniformly throughout tne whole hospital district. It may be expected therefore that the hospital levy to be made next year on the new capital valuation will show a substantial increase, and require probably more than the increase in rating under the unimproved values. This will create a new problem for the Council, in that finance will continue to be restricted. Where land is valuable rating on land values was a felisli in former years, and the theory extended to various boroughs, but it is now apparent that values in small towns are not liable to material increases, whereas under the capital valuation them is a tendency to build modern and more costly houses, and so add to the rateable vjtlue. The higher the value does not mean necessarily higher rates. The nites are based on estimated requirements, and can be spread more fairly (certainly in small towns) on the capital valuation. A Pood (’example could be shown in the relative values, unimproved and capital, of the Government houses. The Council is being vput to extra expense to provide the amenities in footpaths, water supply etc, , for the dwellings, hut if the rating return were worked out under the two systems, the difference would be seen. The capital value gives a moi'e equitable distribution of the rate levy, than unimproved value can give, and many examples could be shown iii)d"r the present system. This was all advised in advance, but the ratepayers were prepared to adopt a theory which sounded well. Now there is a degree of experience' in the matter which should give the Council food for thought in considering .methods to obtain extra revenue.