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June 16, 1978
CONFIDENTIAL (FR)
CLASS II FOMC
SUPPLEMENT
CURRENT ECONOMIC AND FINANCIAL CONDITIONS
Prepared for the
Federal Open Market Committee
By the Staff
Board of Governors
of the Federal Reserve System
TABLE OF CONTENTS
Page
THE DOMESTIC NONFINANCIAL ECONOMY
Industrial production...............................
.
Capacity utilization ............
.................
1
1
Book value of total manufacturing
and trade inventories........................
Privately-owned new housing units....................
3
5
TABLES:
Business inventories.... .............................
4
THE DOMESTIC FINANCIAL ECONOMY
TABLES:
Interest raets..............................
.....
Monetary aggregates..................................
6
7
CORRECTIONS
Part I......................................
..........
5
APPENDICES:
Experience with the new 6-mnth certificates .......... A-1
Bank credit revision...............................
B-1
Proposition 13 ramifications...........................
C-1
INTERNATIONAL DEVELOPMENTS
Swap arrangements between the system
and foreign central banks ......................
8
SUPPLEMENTAL NOTES
The Domestic Nonfinancial Economy
Industrial production increased 0.6 per cent in May.
This
advance followed two months of exceptional increases-revised to 1.4
per cent in April and to 1.2 per cent in March, both of which included
rebound effects from the weather- and strike-reduced production in early
1978.
More than half of the May increase was in output of materials.
Auto and truck production declined after substantial increases in the
three preceding months but remained at a high level.
Moderate
increases occurred in
Industrial
output of most other products.
production in May was almost 5 per cent higher than a year ago.
Output of total consumer goods was unchanged in May,
despite increases of 0.7 per cent and 0.5 per cent,
respectively,
in production of home goods and nondurable consumer goods.
and utility
Auto
vehicle production was reduced, as auto assemblies
declined 4 per cent to an annual rate of 9.4 million units.
equipment output advanced 0.6 per cent further in
widespread increases for industrial, commercial,
Business
May, reflecting
and transit equip-
ment.
Output of materials rose sharply again in May.
increases occurred in
Large
production of durable goods materials, mainly
steel and equipment parts, and in energy materials.
A more
moderate increase was recorded in output of nondurable materials,
reflecting gains for containers,
textiles, and paper.
Capacity utilization in manufacturing increased by an estimated
0.2 percentage point in May to 83.6 per cent.
The May increase followed
larger gains in March and April that partly reflected the recovery
of production from the effects of the coal miners' strike and
severe winter weather.
The utilization rate in the primary process-
ing sector rose by 0.7 percentage point in May to 86.0 per cent;
sizable increases in production of metals contributed to this
gain.
The operating rate in the advanced processing sector was
unchanged at 82.4 per cent, as a decline in production of motor
vehicles and parts held down the utilizatinn rate for this
sector.
In the previous 3 months, large gains in output by the
motor vehicle industry had contributed to increases in the advanced
processing utilization rate.
Utilization of capacity for industrial materials
production increased by an estimated 0.6 percentage point in May
to 84.2 per cent.
Gains in operating rates in the production
of durable goods materials and of energy materials accounted
for the over-all rise.
Capacity utilization in the nondurable
goods materials sector was about unchanged.
Operating rates in manufacturing and in the materials
sector in May were the highest since before the 1974-75 recession
in industrial production.
Utilization rates in most major
industry or materials groups are near their historical average
values and are well below previous peak figures.
-3The book value of total manufacturing and trade
inventories increased at an annual rate of $46.2 billion in
April, well below the phenomenal March rate of accumulation of
$65.3 billion, yet still slightly above the first quarter gain.
In April total inventory investment was about evenly divided
between durable and nondurable goods.
Despite the relatively
large increase in book value inventories in April, the ratio
of inventories to sales declined to 1.40, definitely low on an
historical basis, reflecting sizable growth in sales (3.2
per cent).
The book value of retail trade inventories increased
at a seasonally adjusted annual rate of $10.4 billion, down
considerably from the very high March rate of $17.5 billion;
April accumulation was almost 30 per cent above the first
quarter rate.
The ratio of inventories to sales at all retail
stores fell to 1.41 in April, a bit low on an historical basis,
from the March level of 1.42.
Stocks held by durable goods retail stores increased
at an annual rate of $4.3 billion, more than double the March
rate.
Most of the accumulation of these stocks was fairly
evenly divided among the major industries.
Inventories of
nondurable goods rose at an annual rate of $6.1 billion, sharply
below the $15.6 billion March pace.
increase in
As in March, most of the
nondurable goods stocks was at general merchandisers;
inventories held by food stores declined slightly after a
large rise in the preceding month.
BUSINESS INVENTORIES
(Change at annual rates in
seasonally adjusted book value; billions of dollars)
Manufacturing and trade
Manufacturing
Trade, total
Wholesale
Retail
Durable
Auto
Nondurable
1976
QIV
QI
19.3
9.8
9.4
3.5
6.0
4.4
2.7
1.6
31.0
10.6
20.4
12.0
8.4
3.7
.8
4.7
1977
QIIIQIV
QII
QI
1978
Mar.
Apr.
17.8
2.8
14.9
7.5
7.4
3.9
2.8
3.5
44.2
16.6
27.6
19.5
8.1
3.9
.9
4.1
65.3
17.6
47.7
30.3
17.5
1.8
.2
15.6
46.2
18.7
27.5
17.1
10.4
4.3
1.1
6.1
1977
QIII
QII
QIV
QI
1.46
1.60
1.32
1.21
1.43
1.44
1.56
1.33
1.23
1.42
1.46
1.55
1.36
1.27
1.45
28.3
15.7
12.6
. 2.6
10.0
3.8
2.2
6.2
25.2
10.2
15.0
4.7
10.3
5.1
1.5
5.2
INVENTORY/SALES RATIO
Manufacturing and trade
Manufacturing
Trade, total
Wholesale
Retail
- -
1976
QIV
QI
1.50
1.67
1.33
1.24
1.41
1.46
1.60
1.33
1.24
1.41
1.48
1.61
1.35
1.24
1.45
1978
Mar. Apr.
1.42
1.52
1.33
1.24
1.42
1.40
1.49
1.30
1.20
1.41
I
Privately-owned new housing units started in May, at
a seasonally adjusted annual rate of 2.075 million units, were
4.9 per cent below the April rate, which was up 6.9 per cent from
the preceding month.
Starts of single-family units declined 0.8
per cent and multi-family unit starts declined 1.38 per cent.
Starts declined appreciably in the Northeast area of the country
and moderately in the North Central and West.
Permits issued for new housing units in May, at an annual
rate of 1.587 million units, were 8.8 per cent below those in
the preceding month.
About two-thirds of the May decline was in
permits for single-family units, which declined 8.6 per cent.
The Domestic Financial Economy
No textual addendums to the Greenbook were required,
but the usual updating of the interest rate developments and
monetary aggregates tables are contained on pages 6 and 7,
respectively.
CORRECTIONS
Part I:
Pages I-19 and I-20 are misnumbered.
Page I-20
should precede-rather than follow-page I-19.
Part I:
Page I-4 line 10 should read:
Outlays are $452 billion
for FY 1978 and $498 for FY 1979-each about $1-1/2 billion
below last month.
INTEREST RATES
(One day quotes--in per cent)
1978
Highs
Lows
May 15
June 15
Short-Term Rates
Federal funds (wkly avg.)
7.49(6/14)
6.58(1/11)
7.34(5/17)
7.49(6/14)
3-month
Treasury bills (bid)
Comm. paper (90-119 days)
Bankers' acceptances
Euro-dollars
CDs (NYC) 90 days
6.68(1/11)
7.64(6/15)
7.70(6/14)
8.38(6/15)
6.09(4/24)
6.63(1/6)
6.70(1/6)
7.00(2/8)
6.25
7.06
7.88
6.66
7.64
7.70(6/14)
8.38
7.58(6/14)
6.65(1/4)
7.13(5/10)
7.58(6/14)
7.17(6/15)
7.77(6/15)
6.43(1/4)
6.66(1/5)
6.98
7.12
7.17
7.77
8.00(6/14)
6.85(1/4)
7.63(5/10)
8.00(6/14)
7.47(6/15)
6.53(1/4)
7.30
7.47
8.10(6/14)
4.20(6/9)
7.05(1/4)
3.55(3/3)
7.75(5/10)
4.15(5/12)
8.10(6/14)
4.20(6/9)
8.20(5/31)
8.35(6/16)
8.51(5/26)
7.38(1/4)
7.71(1/5)
8.00(1/5)
8.05
8.25
8.44
8.19
8.35
8.47
8.79(6/2)
9.64(6/5)
9.04(6/9)
9.10(5/26)
8.28(1/3)
9.09(1/3)
8.61(3/24)
8.48(1/6)
8.68
9.49
8.87(5/12)
8.92(5/12)
8.70(6/14)
9.59(6/14)
9.02p(6/16
8 .9 6 p(6 /16
Municipal
Bond Buyer index
6.19(6/1)
5.58(3/16)
5.99(5/11)
6.16
Mortgage--average yields in
FNMA auction
9.86(6/12)
9.13(1/9)
9.63
9.86(6/12)
Most often quoted new
6-month
Treasury bills (bid)
Comm. paper (4-6 mos.)
CDs (NYC) 180 days
Most often quoted new
7.33
1-year
Treasury bills (bid)
CDs (NYC)
Most often quoted new
Prime municipal note
Intermediate- and Long-Term
Treasury (constant maturity)
3-year
7-year
20-year
Corporate
Seasoned Aaa
Baa
Aaa Utility New Issue
Recently Offered
III - 4
UPDATED
MONETARY AGGREGATES
(Seasonally adjusted)1 9 7 7
QIII
QIV
QI
1 9 7 8
April
12 mos
May r
-
ending
May
-
Net changes at annual rates, per cent
Major monetary aggregates
1. M1 (currency plus
demand deposits)
8.1
7.2
5.0
18.7
6.3
7.7
9.9
8.0
6.4
11.1
6.8
8.3
3. M 3 (M2 + all deposits at
thrift institutions)
11.9
10.6
7.4
9.6
6.9
9.8
Bank time and savings deposits
4. Total
10.3
13.0
13.1
8.1
13.8
5. Other than large negotiable
CDs atweekly reporting banks 11.2
8.5
7.5
5.7
7.2
8.8
2. M 2 (M1 + time & savings
deposits at CBs other
than large CDs)
12.5
6.
Savings deposits
7.3
5.4
2.2
3.3
1.6
4.1
7.
Individuals2/
9.6
7.0
3.1
4.1
1.7
5.5
8.
Other 3 /
-17.1
-17.8
-8.0
-8.2
0.0
14.6
11.4
12.0
7.9
12.4
9.
Time deposits
-12.7
13.2
10.
Small time4/
8.3
1.0
2.7
10.1
8.6
11.
Large time4/
28.1
32.4
29.9
5.1
17.9
30.7
Deposits at nonbank thrift institutions5/
14.4
15.0
12. Total
8.9
7.1
7.2
11.9
16.2
15.4
9.0
7.6
7.9
12.6
9.5
9.9
5.8
3.6
3.6
20.1
20.0
18.2
14.7
12.1
13.
Savings and loans
14.
Mutual savings banks
15.
Credit unions
5.1
7.4
19.6
MEMORANDA:
16. Total U.S. Govt deposits
Average monthly changes, $ billions
-0.3
-1.0
0.4
-1.2
0.2
0.2
17. Total large time deposits 6/
1.7
6.2
4.5
1.8
5.1
3.9
18. Nondeposit sources of funds 7 / 1.4
1.3
1.9
-1.4
1.9
1.2
r-revised
1/ Quarterly growth rates are computed on a quarterly average basis.
2/ Savings deposits held by individuals and nonprofit organizations.
3/ Savings deposits of business, government and others, not seasonally adjusted.
4/ Small time deposits are time deposits in denominations less than $100,000.
Large time deposits are time deposits in denominations of $100,000 and above
excluding negotiable CDs at weekly reporting banks.
5/ Growth rates computed from monthly levels based on averages of current and
preceding end-of-month data.
6/ All large time certificates, negotiable and nonnegotiable, at all CBs.
7/ Nondeposit borrowings of commercial banks from nonbank sources include Federal
funds purchased and security RPs plus other liabilities for borrowed money,
including borrowings from the Federal Reserve, Eurodollar borrowings and loans
sold, less interbank loans.
CONFIDENTIAL (FR)
CLASS II-FOMC
SWAP ARRANGEMENTS BETWEEN THE SYSTEM
AND FOREIGN CENTRAL BANKS
June 14, 1978
Listed below as of June 14, 1978, are the swap arrangements
concluded on behalf of the Federal Reserve System with foreign banks.
Amount of
Agreement
(millions of
dollars)
Foreign Bank
Austrian National Bank
Maturity
:y of
latest authorized
:horized
renewal
al
December 4., 1978
250
10, 1978
National Bank of Belgium
1,000
December
Bank of Canada
2,000
December 229,
1978
250
December
29, 1978
Bank of England
3,000
December
1, 1978
Bank of France
2,000
December 229,
1978
German Federal Bank
4,000
December 229,
1978
Bank of Italy
3,000
December 229,
1978
Bank of Japan
2,000
December
National Bank of Denmark
4, 1978
Bank of Mexico
360
December i.,
Netherlands Bank
500
December
19,
Bank of Norway
250
December
1, 1978
Bank of Sweden
300
December
1, 1978
Swiss National Bank
1,400
December
4, 1978
B.I.S.
1,850
(
600) 1 ,
(1,250)'
Total
1978
1978
December 4, 1978
December 44, 1978
22,160
1/
This reciprocal arrangement provides for swaps of dollars against
authorized European currencies other than Swiss francs.
CONFIDENTIAL (FR)
CLASS II-FOMC
As of June 14, 1978, drawings on the above arrangements are
outstanding in the amounts indicated below:
Drawings Outstanding on Swaps
Arrangements with
Initiated
by System
(millions
of dollars
equivalent)
Swiss National Bank
(Special Arrangement)
German Federal Bank
Total
Total
Initiated
by foreign bank
--
1,128
1,458
1,458
Date since
facility has been
in continuous use
May 19,
1971
October 5,
1977
APPENDIX A
EXPERIENCE WITH THE NET 6-MONTH CERTIFICATES*
The newly authorized 6-month ("money market") certificates
apparently attracted a sizable volume of deposits in early June, according to regulatory agency surveys, field reports, and press accounts.
Flows into the money market certificates at S&Ls and MSBs were quite
strong, prompting a moderate acceleration in total deposit growth at
these institutions.1/ Data on funds attracted by commercial banks are
not yet available, but qualitative information, including various accounts in the Redbook, suggests that banks have promoted the new certificates less vigorously than thrift institutions and have taken in
less money. More than 90 per cent of all institutions offering the
money market certificates are paying the maximum rates, according to
survey results for all three major types of depositary intermediaries.
Data collected from a sample of large S&Ls (roughly the 20
largest associations in each FHLB District, holding among them about
two-fifths of industry deposits) show that these institutions received
about $1 billion in the new accounts during the first week in June.
This represents about 0.7 per cent of outstanding deposits at the
associations surveyed. Respondents estimated that 40 to 45 per cent
of the deposits in money market certificates represented new funds to
the institutions, with the balance having been transferred from existing
accounts; these estimates agreed with FHLBB staff estimates based on
total deposit flows for the first 10 days of June.2/ Approximately
93 per cent of the S&Ls surveyed were offering the new accounts.
*
Prepared by Edward McKelvey of the Capital Markets Section with
the assistance of other economists in the Division of Research
and Statistics.
1/ Deposit growth for S&Ls and MSBs combined is projected to be 8-1/2
per cent for June, in comparison to an average 6.7 per cent for the
first five months of 1978. The acceleration from May to June is
less pronounced, perhaps because some depositors had transferred
funds into thrifts in May in anticipation of the new offerings.
2/ Estimates by individual institutions of percentages of funds shifted
from existing accounts must be used with care. On the one hand,
funds transferred to a money market certificate from a passbook
account at the same institution may only recently have been deposited
for the express purpose of buying the new certificate. On the
other hand, funds newly deposited at one institution may have been
withdrawn from existing accounts at another institution.
A - 2
More detailed survey results for MSBs, provided by the
National Association of Mutual Savings Banks, are generally in line
with the results for S&Ls, although a greater percentage of funds
taken into the new accounts is estimated to have been shifted from
Of the 466 MSBs questioned in the industry-wide
existing accounts.
survey, 312 responded (67 per cent) and 200 of these said they were
offering the new certificates (64 per cent of the respondents).
These institutions received about $650 million in the money market
certificates during the first week of June, a figure that, in relation to total deposits at these institutions, is roughly comparable
to the 0.7 per cent results for S&Ls. Only 20 per cent of this inflow
was estimated to be new money. The MSBs in New York State accounted
for a large part of the new funds ($450 million), reflecting the predominance of this State in the MSB industry and the greater interestsensitivity of depositors at these institutions.
As noted earlier, data on funds placed in the new accounts
are not yet available for commercial banks. Partial survey results
from six Reserve Banks (Boston, New York, Philadelphia, Cleveland,
Richmond, and Kansas City) indicate that at least 70 per cent of the
banks sampled (STSD sample) were offering the new certificates, and
that virtually all of these institutions were paying the highest
permissible rate. Reports in the Redbook suggest that the money
market certificates may not have sold as well at banks as at thrifts.
Preliminary data on over-all deposit flows for commercial banks
indicate a weakening in savings deposits and a pick-up in small time
deposits, suggesting some shifting between accounts but no net
deposit gains as a result of the new accounts.3/
Press accounts generally agree with the preliminary results
of the surveys reported here. They also indicate that average balances
in the money market certificates exceed $10,000 by a significant
margin at many of the institutions contacted. Additionally, it has
been suggested that sales of the new certificates may increase markedly
in early July. Among the reasons cited for this is that some purchases
are being postponed until interest or dividends credited on a quarterly
basis are received at the end of June. Also, early July may be an
important reinvestment period because a significant proportion of
time certificates reportedly expire on June 30.
3/ Of course over-all deposit growth would likely have been weaker
in the absence of the new accounts.
Table 1
Total Loans and Investments 1/2/
(Dollar changes in bil1ions; annual rates in percent)
Old Seasonally
Adjusted
Series
Benchmark
Seasonal Factor
9.2
6.6
1.0
8.2
1977--May
June
New Seasonally
Adjusted
Series
Changes Due To:
6.6
.6
.4
1.0
1.5
-. 8
9.2
-2.9
3.6
13.5
11.8
-.7
12.9
9.2
October
November
December
9.6
8.5
46.3
1st
2nd
3rd
4th
20.9
25.4
17.9
Quarter
Quarter
Quarter
Quarter
4.7
1.8
2.9
17.6
8.8
7.4
6.7
1978--January
February p/
March
April- I
pj.. L..
/
1st Quarter
p/
I
.6
-1.1
.1
-.1
6.3
10.4
11.0
-1.5
1.6
44.8
11.7
11.3
10.0
-. 6
-. 9
20.3
24.5
21.4
20.4
10.6
12.6
9.9
12.1
10.1
41.8
1.7
-.1
2.2
-1.7
-1.1
-
-1.1
3.8
12.8
10.5
7.2
86.6
5.8
5.5
13.8
-2.1
n
22.9
6.6
4.6
9.5
.1
4.7
35.5
13.5
9.6
12.3
2.7
1st Half
2nd Half
9.6
7.4
5.1
.6
81.8
12.0
New
8.9
6.6
8.6
Year
Old
1.7
-1.8
1.8
July
August
September
-. 5
Annual Rates
-. 6
-
-8
21.2
8.5
8.6
8.3
9.1
10.3
12.1
10.3
9.5
13.6
7.9
7.4
21.5
--
18.4
10.5
9.7
1/ Last Wednesday of month series
?/ Includes loans sold outright to banks' own foreign branches, nonconsolidated nonbank affiliates of the bank,
the banks' holding company (if not a bank), and nonconsolidated nonbank subsidiaries of the holding
company.
p/ Preliminary
Table 2
Total Loans 1/2/
(Dollar changes in billions; annual rates in percent)
Series
Benchmark
1977--May
June
5.4
6.3
July
6.7
8.0
5.1
0.4
0.4
10.4
9.0
1.9
0.2
0.7
2.2
August
September
October
November
December
Year
74.8
1st Half
2nd Half
33.7
41.1
1st
2nd
3rd
4th
14.2
19.5
19.8
21.3
Quarter
Quarter
Quarter
Quarter
1978--January p/
February p/
New Seasonally
Adjusted
Changes Due To:
Old Seasonally
Adjusted
0.5
Seasonal Factor
Series
Old
1.3
6.7
6.4
11.5
13.3
14.2
13.4
-.4
7.1
8.0
6.1
13.9
16.5
10.4
14.8
16.4
12.3
8.8
17.6
18.4
.5
-. 4
9.3
1.5
5.6
20.9
17.8
3.7
79.2
13.8
14.6
34.3
44.9
12.4
14.3
12.6
15.5
14.9
19.4
21.2
23.7
10.5
14.0
13.7
14.3
11.0
13.9
14.7
15.8
7.8
18.3
15.0
-1.8
-. 6
.7
-. 1
1.3
3.1
.1
-. 7
-1.8
.1
.2
.2
-.1
.4
March
p/
9.4
2.8
7.9
April
p/
11.5
-.1
1st Quarter
p/
20.1
-1.8
New
.1
.6
4.4
Annual Rates
-1.6
.8
5.4
10.9
5.9
3.1
8.2
15.1
15.5
9.8
21.6
18.3
19.1
13.0
12.3
1/ Last Wednesday of Month series
Includes loans sold outright to banks' own foreign branches, nonconsolidated nonbank affiliate of the bank,
T/
m
the banks' holding company (if not a bank), and nonconsolidated nonbank subsidiaries of the holding campany.
p/
Preliminary
Table 3
U.S. Treasury Securities 1/
(Dollar changes in billions; annual rates in percent)
Old Seasonally
Adjusted
Series
1977-May
June
Benchmark
1.3
.1
.2
.1
2.2
-1.4
.7
-1.7
-1.7
-18.3
.2
-27.6
-34.3
.1
-1.3
-3.1
-0.7
.1
October
November
December
-2.3
-2.8
-1.5
1.3
-3.0
.2
.1
.7
.8
22.0
1.1
-5.8
-34.9
New
15.3
2.3
8.1
-19.6
-19.9
-15.5
-18.9
-37.4
-8.7
-2.4
-3.9
-2.4
-2.5
2.6
5.4
-7.8
-22.2
-15.1
6.5
-2.2
17.6
-. 3
4.3
1.1
-2.7
-5.1
26.7
1.4
-5.1
-3.8
1.3
7.9
-11.7
1978-January p/
February p/
Old
-. 6
-. 5
Quarter
Quarter
Quarter
Quarter
Annual Rates
.1
-1.6
1st Half
2nd Half
Seasonal Factor
New Seasonally
Adjusted
Series
1.9
July
August
September
Year
1st
2nd
3rd
4th
Changes Due To:
1.3
.3
-. 4
2.1
-6.6
1.0
.5
-1.0
5.0
-1.0
-. 6
2.3
-2.3
-2.4
March
p/
April
p/
1.9
1st Quarter
p/
3.0
1/ Last Wednesday of Month series
.1
-. 6
-2.4
16.2
5.4
-19.4
-26.4
11.0
4.3
-10.4
-20.3
8.8
-3.4
-12.8
64.9
-12.3
33.6
-41.2
2.0
23.6
25.1
.7
2.7
12.8
Table 4
Other Securities 1/
in
billions; annual rates in percent)
(Dollar changes
Old Seasonally
Series
Benchmark
July
August
September
1.5
1.1
.1
.6
.1
October
November
December
1.5
2.3
10.8
Year
1st Half
2nd Half
.2
-1.4
-. 5
.2
-1.1
2.0
-1.0
- 0
4.7
6.1
Ist Quarter
2nd Quarter
3rd Quarter
4th Quarter
.4
-.4
-. 2
April
p/
2.6
1st Quarter
p/
-. 2
1/
Last Wednesday of Month series
p/
Preliminary
.2
-1.2
1.3
.1
1.4
9.4
11.8
8.6
8.5
8.5
.7
4.6
1.7
11.5
17.5
5.4
-6.8
13.0
3.0
-2.3
9.8
7.3
6.6
5.1
6.3
4.7
8.0
6.9
6.1
.4
-. 3
1.4
.9
New
1.1
1.1
-. 3
.3
Old
7.1
1.6
.1
.9
-. 5
-. 5
Annual Rates
.9
1.1
4.0
2.9
1.8
.2
2.9
1978--January
February
March
-1.0
4.5
3.2
Series
-. 2
.2
-. 9
Seasonal Factor
.3
.9
1977-May
June
New Seasonally
Changes Due To:
.7
.5
12.1
8.4
7.4
3.0
10.7
7.5
4.6
3.0
-3.0
-1.5
10.6
5.3
-. 6
2.0
19.6
15.0
.9
2.1
-0.5
5.3
Table 5
Business Loans
(Dollar changes in billions; annual rates in percent)
Old Seasonally
Adjusted
Series
Changes Due To:
Benchmark
Seasonal Factor
New Seasonally
Adjusted
Series
Annual Rates
Old
New
1977-May
June
1.5
.3
1.8
2.0
.1
2.1
12.6
11.4
13.2
July
2.2
2.2
-.2
-.2
12.4
-.3
1.3
13.5
3.0
11.7
.5
2.0
1.9
1.5
13.7
-.1
4.3
-. 4
-.3
-.5
-1.3
2.6
1.6
1.6
26.1
14.8
15.7
9.5
9.5
August
September
October
November
December
2.5
1.1
-.6
1.0
9.5
6.4
9.1
Year
23.9
-1.6
22.3
13.1
12,2
1st Half
2nd Half
11.1
12.8
-1.6
11.1
11.2
12.2
13.3
12.2
11.6
11.4
11.2
12.8
11.2
11.7
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
5.2
-.1
5.9
.1
5.1
6.0
1978--January p/
February p/
2.2
2.4
4.9
7.9
March
p/
3.8
April
p/
3.5
p/
8.4
1st Quarter
-.4
.9
5.4
-1.2
-.9
5.8
12.6
10.2
16.0
.1
-.1
-.1
-. 3
-.1
.4
2.2
2.0
4.1
12.8
13.9
21.7
12.9
11.6
23.6
3.1
19.7
17.5
8.3
16.4
16.3
-.1
1/ Last Wednesday of Month series
/ Includes loans sold outright to banks' own foreign branches, nonconsolidated nonbank affiliates of the bank,
the banks' holding company (if not a bank) and nonconsolidated subsidiaries of the holding company.
P/
Preliminary
Table 6
Real Estate Loans 1/
(Dollar changes in billions; annual rates in percent)
Old Seasonally
Series
1977-May
June
Changes Due To:
Benchmark
New Seasonally
Seasonal Factor
2.2
2.5
2.0
October
November
December
2.0
2.2
2.1
New
16.8
18.1
16.8
18.1
2.2
2.7
2.5
16.4
18.3
14.4
16.4
19.8
18.0
-. 3
2.1
3.1
2.3
14.3
15.5
14.6
14.9
21.8
15.9
.2
.2
-. 2
.3
.2
.1
.7
.5
Old
2.2
2.4
2.2
2.4
July
August
September
Series
Annual Rates
.2
Year
25.4
2.0
-. 1
27.3
17.0
18.3
1st Half
12.4
13.0
-.1
12.4
14.9
16.6
2.0
16.6
18.5
5.6
15.0
17.6
16.6
2nd Half
5.6
6.8
1st Quarter
2nd Quarter
3rd Quarter
6.7
6.3
4th Quarter
1978--January p/
February p/
6.8
.7
1.3
2.0
.1
.5
March
p/
1.8
2.6
April
p/
2.4
-.1
1st Quarter
p/
6.4
.6
1/ Last Wednesday of Month series
F/
Preliminary
-. 1
.1
.2
-.2
16.1
15.0
15.0
17.6
18.3
17.8
2.2
2.5
2.4
13.7
12.2
17.5
14.9
16.8
15.9
2.3
15.9
15.0
7.1
14.7
16.1
7.4
7.5
Table 7
SEASONALLY ADJUSTED COMMERCIAL BANK CREDIT 1/
COMPARISON OF OLD AND REVISED LEVELS
(In billions of dollars)
Total Loans & US Treasury
Investments
Old Revised
1977 July
August
September
October
November
December
1978 January p/
February p/
March
p/
April
1/
p/
Securities
Old Revised
Other
Securities
Old Revised
Total
Loans3/
Old Revised
Busines /
Loans3/
Old Revised
Real
Estate
Old Revised
841.1
849.7
852.4
842.6
850.0
855.1
103.6
103.1
100.1
104.1
102.4
100.7
154.4
155.5
156.1
154.4
155.5
156.2
583.1
591.1
596.2
584.1
592.1
598.2
195.2 195.2
197.4 197.1
197.9 198.6
163.6
166.1
168.1
163.6
166.3
168.8
862.0
870.5
870.0
864.3
870.9
875.5
97.8
95.0
93.5
99.4
96.3
95.6
157.6
159.9
159.0
157.9
158.3
158.0
606.6
615.6
617.5
607.0
616.3
621.9
202.2 201.2
204.7 202.8
205.8 204.2
170.1
172.3
174.4
170.9
174.0
176.6
878.8 885.4
886.2- 891.2
892.9 896.7
92.5
97.5
96.5
96.3
99.0
95.6
159.4
159.0
158.8
159.4
159.4
160.1
626.9
629.7
637.6
629.7
632.8
641.0
207.7 206.4
210.1 208.4
213.9 212.5
176.7
178.5
181.1
178.8
181.3
183.7
909.3
98.4
97.6
161.4
162.1
649.5
650.8
216.7 215.6
183.5
186.0
910.5
Last-Wednesday-of-month series except for June and December which are adjusted to the last business
day of the month.
2/
Data revised to reflect revisions in seasonal factors and benchmarking to the December 31, 1977, Call
Report.
3/
Includes outstanding amounts of loans reported as sold outright by banks to their own foreign branches,
nonconsolidated nonbank affiliates of the banks' holding company (if not a bank) and nonconsolidated
nonbank subsidiaries of holding companies.
p/-- Preliminary
Appendix B*
Bank Credit Revision
The seasonally adjusted series on commercial bank credit and
its major components have been revised. The revised data were used in
this month's analysis of financial developments. The revision included the
updating of seasonal adjustment factors and the usual benchmark revision that
incorporates the latest Call Report data, December 31, 1977, for nonmember
banks. Revisions in seasonal factors affected the seasonally adjusted data
from 1971 to date, with principal changes in the more recent years. The
benchmark revision covered the July 1977 to April 1978 period.
In summary, over the recent period, the principal effects of the
combined benchmark and seasonal revisions were to raise the level of total
bank credit and to smooth the pattern of growth somewhat. In the second half
of 1977, the seasonally adjusted annual rate of growth in total bank credit
was raised 1.5 percentage points to 10 per cent, Over the January-April 1978
period, growth increased somewhat to a 12 per cent rate but this was considerably below the rate of acceleration previously estimated. Expansion in total
loans was a little faster over the July-December 1977 period than preliminary
data had indicated but in the early months of 1978, revised data indicated
a slight slowing in the growth rate compared with a slight expansion on the
old basis. The revised data indicate less liquidation of U.S..Treasury
securities in the second half of 1977, but net acquisitions in the first four
months of 1978 also are much smaller after revision than previously estimated.
In contrast, "other securities" increased somewhat less on the new basis in
the second half of 1977 but then rose somewhat more in early 1978. Growth
in business loans was slightly lower in the second half of 1977 than previous
figures had indicated--11.6 per cent compared with 13.3 per cent, although the
revised data continue to indicate rapid acceleration in these loans in early
1978. Real estate loans expanded faster on the revised basis over the 10
months since mid-1977, with the pace of growth falling off somewhat in early
1978 as previously estimated.
Changes between old and revised data for major bank credit components
are shown in detail in Tables 1 through 6 at the end of this Appendix. Outstanding data on the two bases are shown on Table 7.
Revisions in the original not seasonally adjusted monthly estimates
reflect three sources of error, as discussed below.
*
The revised seasonal factors were prepared by Edward R. Fry and Mary F.
Weaver, and the benchmark revisions by Mary Jane Harrington, Banking
Section, Division of Research and Statistics.
B-2
1.
Nonmenber bank credit estimates.
Data from the December Call
Report suggest that total credit at nonmember banks (including loans to
domestic commercial banks) increased by $2 billion more than previously
estimated between June 30, 1977 and December 28, 1977.1/ Loans were $0.8
billion higher. By historical standards, these revisions were much smaller
than those for any other recent Call date and indicate a fairly comparable
rate of growth for small member banks and nonmember banks.
years, growth rates have been larger at nonmember banks.
In most recent
Estimates of U.S.
Treasury security holdings were raised $0.8 billion and those for "other
securities," $0.4 billion. Reflecting the December benchmark corrections,
nonmember estimates were revised for earlier months back to June 30, 1977-i.e., to the previous Call Report benchmark. Also, the revised levels were
carried forward from December 1978 into the current monthly estimate.
Revisions of levels for the most recent months, as usual, had little effect
on estimated changes in not seasonally adjusted bank credit for those months.
In addition to the benchmark revisions in nonmember estimates,
outstandings for total loans and investments, loans, and business loans were
also affected by reclassifications of loans sold to the banks' own foreign
branches, affiliates, etc. The reclassifications, which occurred in April
1978, increased total loans sold by $400 million and reduced business loans
sold by $700 million. These changes were distributed over the July 1977March 1978 period to avoid discontinuities in the series. About $300 million
of the increase in total loans and $600 million of the reduction in business
loans were reflected in the second half of 1977. In the tables shown in this
Appendix, changes due to the loan sale reclassifications have been included
with the benchmark revisions.
2. Estimates of domestic interbank loans. The bank credit series
measures credit extended to the nonbank public and thus excludes loans to
domestic commercial banks. Such interbank loans, including Federal funds
transactions as well as other loans to banks, are estimated on the basis of
data reported each Wednesday by member banks. Nonmember estimates rely on
data reported by small member banks and Call Report ratios of nonmember to
small member interbank loans. Based on the December 1977 Call, the total
change as in the three previous December Calls. This reduction in interbank
loans raised estimated loans to nonbanks by a like amount.
Because of their extreme volatility , interbank loans are difficult
to estimate, and these estimates frequently are a major source of error in
1/
Initial estimates for nonmembers banks are for the last Wednesday of each
month. These estimates are based on data reported weekly by the smaller
member banks, using ratios derived from Call Reports that relate nonmember amounts to the amounts reported by the smaller member banks. Previous estimates reflected Call Report relationships as of June 30, 1977.
B-3
bank credit estimates. For example, in the second half of 1977, revisions
in interbank loans and in total loans (including interbank) were in opposite
directions. Thus, the upward revision in loans adjusted (excluding interbank),
the concept used in the bank credit series, was somewhat larger than the
revision in total loans (including interbank)-$2.8 billion versus $0.8
billion.
3. "Window-dressing" estimates. When the last-Wednesday current
reporting date differs from the Call Report date, as usually happens, an
estimate of the change in
levels between these two dates is
included in
the
initial bank credit figures for the June 30 and December 31 Call dates. The
change between the Wednesday and Call dates is termed "window dressing."
Frequently in the past, errors in estimating this change have contributed
substantiallyto benchmark revisions.
However, in December 1977, the actual
change in total bank credit between December 28 and December 31 ($9.1 billion)
was only moderately above the amount of change included in the initial
esti"Window dressing" estimates were $1.4 billion too low
mate ($8.5 billion).
for total loans but $0.9 billion too high for total investments, with the
latter reflecting a substantial contra seasonal reduction in "other securities"
With the exception of security loans,
in the last three days of December.
errors in "window dressing" estimates for major loan categories were relatively
small.
Security loans increased $2.6 billion between the last Wednesday of
The large
December and the Call date, or $0.9 billion less than anticipated.
increase in security loans in the last three days of December appears to be
The effects
associated with heavy runoffs of System repurchase agreements.
of similar runoffs at the end of December 1976 were taken into account in the
1977 "window dressing" estimates, but the effect on security loans was overestimated.
"Window-dressing" errors affect only the December levels and
changes involving December and surrounding months. Thus, the upward revision
in
total loans due to December "window-dressing"
washes out in
the January
change. Similarly, the large decline in "window-dressing" for "other
securities" in December was followed by an increase in January.
There is an additional source of error that may be involved in
original monthly estimates but which cannot be measured directly in the case
of the December 31, 1977 Call. Errors in the original reported member bank
data which are incorporated directly into the credit series and the indirect
effects on estimates for nonmember banks can only be derermined when the lastSuch reporting errors
Wednesday reporting date coincides with a Call date.
sometimes have been substantial in the past when it was possible to crosscheck reports for the same date.
B-4
Actual data for loan categories are available on a current basis
only for large weekly reporting banks. Estimates for other commercial banks
are made largely on the basis of the movement of total loans at the smaller
banks, the trend of business and other loans as indicated by the most recent
Call Report and patterns for previous years established in the monthly benchmarking of the series. Taking account of revisions in nonweekly reporting
bank estimates, "window-dressing" estimates, and seasonal factor changes,
the net effects on major loan categories varied considerably over the late
1977 and early 1978 periods.
Business loans increased $1.6 billion less than estimated in the
second half of 1977--$11.2 billion compared with an estimated $12.8 billion.
The difference was due entirely to benchmark changes including a downward
revision of $600 million in loan sales. The $1.0 billion benchmark error
alone was comparable with the average error on other recent December Calls.
While seasonal factor revisions did not affect the half-year change, they
added $0.9 billion to the third quarter level and subtracted $0.9 billion
from the fourth quarter level. Growth in the first four months of 1978-$11.4 billion--was somewhat smaller than estimated initially with revisions
in seasonal factors accounting for most of the change.
Real estate loans were $2 billion higher at the end of December
than estimated--a somewhat larger benchmark error than average for this
series and the estimated January-April 1978 increase was raised by $600
million. Changes in seasonal factors reduced the second-half 1977 increase
slightly and added slightly to the early 1978 rise.
Agricultural loans were estimated at a level $1.1 billion too high
in December 1977--an unusually large error for this series. The revised
data indicate little change, on a not seasonally adjusted basis, over the
second half of 1977 compared with increases of $1.1 billion in corresponding
periods of the two previous years. In most prior years, however, changes in
the second half had been much smaller. In addition, Production Credit
Association loans declined in the closing months of 1977. These recent shifts
in agricultural loan patterns appear to be associated with four factors:
(a) recovery in farm prices and income from the low point of mid-1977,
(b) special Federal payments to wheat producers disbursed around mid-year,
(c) Federal disaster loans to farmers in drought areas, and (d) storage of
large amounts of grain under Federal price support loans. However, in the
first four months of 1978, data nowavailable indicate that agricultural
loans increased substantially compared with little change on the earlier
estimates. The seasonal factor revision had no effect on agricultural
loan levels.
B-5
The level of security loans was $600 million lower than estimated
on December 31, 1977, and that of nonbank financial loans $500 million higher.
In the first four months of 1978, security loans increased somewhat more
than estimated due to the December-January "window-dressing" pattern discussed
earlier. Revisions in seasonally adjusted levels due to changed seasonal
factors were small for both series over the late 1977-early 1978 period.
Consumer loans, which are derived from consumer credit survey
reports, were not affected by the benchmark revision on a not seasonally
adjusted basis. However, changes in seasonal factors were relatively large
and lowered the seasonally adjusted level by $800 million over the second
half of 1977 and increased it by $400 million over the first four months of
1978. The consumer loan series will be benchmarked to the December Call
shortly, and it is expected that these revisions will indicate considerably
larger growth than previously estimated. This, in turn, will reduce the
large upward revision in "all other loans" on December 31, 1977, of $4.5
billion.
C-1
APPENDIX C*
PROPOSITION 13 AND ITS RAMIFICATIONS
The passage of Proposition 13 is likely to result in major
changes in California's fiscal structure. Both tax relief and tax
"reform" will be one outcome. Total revenue growth for the public
sector will slow, and property taxes will become less important.
Expenditure growth is also likely to be slower, but cuts in spending
will be cushioned by accumulated surpluses at the state level.
Despite the general tone of fiscal conservatism across the nation,
the unique combination of high property taxes and large state budget
surpluses in California makes it difficult to judge to what extent
similar developments will spread to other parts of the country.
Some effects are bound to be evident, however.
WHAT PROPOSITION 13 DOES
Proposition 13 requires major changes in the collection of
state and local revenues in California. It restricts property tax
collections in the fiscal year starting July 1, 1978 to 1 per cent
of the market value of a home or business property three years ago.
Further, it will sharply limit property tax increases thereafter.
The measure also erects formidable barriers to increasing other
taxes whether by local governments or the State legislature.
The key elements of Proposition 13 are currently being challenged in the courts and, thus, might never be fully implemented. In
particular, a suit has been filed that contests the section that allows
a house that is sold to be fully reassessed while a similar unit that
does not change hands would have a much lower assessment. The provisions that tax increases must be approved by two-thirds of all
members of the Legislature or two-thirds of local "qualified electors"
is also being questioned.
WHAT WAS THE BASIS FOR VOTER SUPPORT?
Citizens of California--like those all across the Nation-suffering from heightened doubts over the value of
apparently
are
local government services. However, the approval of Proposition 13
in California clearly reflects more than this general feeling.
The Tax Structure. The tax burden borne by Californians
must be judged a contributing factor in their decision. Property
taxes have increased sharply in California--albeit not as starkly,
on average, as many accounts would suggest. Table 1 shows that for
the last two fiscal years for which we have complete data (1975 and
*Prepared by James Freund, Economist, National Income Section,
Division of Research and Statistics.
C-2
1976), California was among the states where property tax revenues
grew most rapidly.1/ More current data covering tax receipts in
large metropolitan counties suggest that California has continued
to be among the areas with the most rapid increases through the
current fiscal year. Part of the above-average rate of increase
reflects inflation in home prices and decisions by elected officials
to keep statutory rates high.
These increases would not have been quite so irksome to
voters had Californians not already been bearing relatively heavy
property tax burdens. Table 2 shows that California ranks fourth
in terms of per capita tax burden. An alternative measure--local
property taxes as a per cent of personal income--also shows that households and businesses in California have high burdens relative to the
national average. California is eighth from the top in this regard.
Part of the explanation for this heavy property tax burden is that
in the past California has relied quite extensively on the property
tax vis-a-vis other revenue sources. In 1976 local property taxes
in California accounted for 41 per cent of all state and local tax
levies--the national average was 35 per cent. Only eight states
were proportionally more dependent on this source of revenue.
Another motivating factor in the vote for Proposition 13
could have been the perception of a high over-all tax burden. In
terms of total state and local taxes per capita, California ranks
only behind New York. When measured as a proportion of income, on
average Californians rank eighth in total tax burden.
The Effects of Inflation. The problems experienced by
California have been heightened by the effects of inflation. Higher
housing values have led to rising assessments and to larger tax bills.2/
Some homeowners are apparently having difficulty paying property taxes
1/ It should be noted that in fiscal year 1974 property tax receipts
actually declined slightly in California. If that year is averaged
with 1975 and 1976, 30 states had higher property tax increases.
2/ Of course, it is not necessary that higher property tax receipts
must follow higher house prices. Tax rates can be adjusted downward
to obtain any rate of increase in effective tax rates desired.
C-3
out of current income.3/ While such inflationary effects are a nationwide
phenomena, they have been magnified in California by very rapid
increases in housing prices and by relatively efficient reassessment procedures.
At the same time that California's heavily-burdened property
taxpayers were asked to pay for higher costs of local services through
increased property taxes, the State treasury was garnering windfall
gains from inflation. Like the Federal tax system, California's
state income tax is progressive. As nominal incomes increase with
inflation, taxpayers move to higher effective tax rates and pay
proportionally more.
WHAT IS LIKELY TO HAPPEN IN CALIFORNIA?
If court challenges to Proposition 13 are unsuccessful,
major changes will take place in the system of taxation in California.
For the fiscal year starting July 1, 1978,an estimated $7 billion will
be cut from a previously-expected $12 billion in property tax
receipts.
(It is noteworthy that a substantial majority of property
taxes are paid by business property owners.) The latest data available show that total property tax receipts account for almost 40
per cent of local revenues; thus, on average about one-fourth of
a local unit's receipts have been taken away.
Other Sources of Funds are Available. It is likely that
offsetting increases in other taxes will be enacted in some communities
despite the new two-thirds rule. Increased use of fees and charges
is also likely. However, clearly the most important replacement for
lost property taxes in the fiscal year about to start will be grants
from the State of California to local governments. Recently-revised
estimates show that by spending over $2 billion less than its receipts
in the fiscal year just ending, the state has raised its cash balances
to over $3 billion. If these funds--along with the additional surplus of
about $2 billion now projected for the upcoming fiscal year-were
transferred by the legislature to local governments, a substantial
portion of next year's $7 billion shortfall in local receipts could.be offset. Thus, it is quite possible that drastic cuts in total spending
may not be immediately necessary. It is likely, however, that
3/
In theory, homeowners could borrow against these unrealized capital
gains to improve their liquidity.
C-4
spending will not grow as rapidly as it might have; this is particularly
true in the short-term because of the substantial uncertainties felt
by individual units as to the amount of state funds they will eventually
receive. Moreover, in future fiscal years when the state government
does not have a large accumulated cash balance on hand, reduced
spending may have to bear more of the burden.
Disruptions and Redistribution Questions. There are undoubtedly going to be short-term disruptions in services as well as
layoffs and salary freezes before the adjustments to Proposition 13
are completed. These problems may be prolonged for some time since
longstanding issues will have to be dealt with before state resources
can be fully distributed to local governments. 4/ Should state
revenues be distributed in proportion to property taxes lost? Or should
special consideration be given to areas that are property-poor but have
great financial needs? Since it seems inevitable that any plan adopted
will not replicate the distribution of receipts from property taxes,
some localities will have to make adjustments in spending.
Capital Markets. Proposition 13 may affect the ability of
the State of California and its localities to market some of its longterm debt instruments. The Proposition specifically excludes from
its purview taxes needed to pay the principal and interest for
existing general obligation bonds. Further, it is generally thought
that--after a period of uncertainty--new general obligation bonds
will not have serious trouble in being sold (although perhaps at
a somewhat higher rate). A possible exception is governmental units
for which a new state aid formula would mean substantially reduced
revenues.
Conversely,
tax allocation bonds --and other instruments
specifically tied to future property tax revenue growth--probably
will not be marketable until new fiscal arrangements for future tax
revenue growth are settled. Both Moody's and Standard & Poor's have
suspended ratings on such issues which comprise about $2 billion of
California's $18 billion outstanding debt.
SPILLOVER TO OTHER STATES
There already is a generally conservative attitude regarding state and local finances across the nation, but the success
of the "taxpayers' revolt" in California may strengthen these
feelings. In particular, new constraints on taxation and spending
may be enacted in other states, but it is not clear to what extent
this will occur. There are obstacles to transferring California's
experiment to other jurisdictions.
4/ The political question of how to distribute the state surplus is a
longstanding one. In fact, some commentators feel if the state
legislature had successfully dealt with the problem at an earlier
date, it would have cleared the path to lower property tax rates
without Proposition 13.
The Full Consequences are Unknown. Most of the ramifications of Proposition 13 may not be felt for several years. Among the
questions that will determine the desirability of such actions
elsewhere is taxpayer reaction to lost services. While many
apparently wish that welfare payments and "fat in the budget" would
be the areas that are cut back, an extended period of local government
budget constraint probably can be achieved only by also cutting
educational and protective services--the two largest budget items.
Further, the desirability of cuts in property taxes will depend
on acceptance of increases in other revenues. For instance, will
taxpayers be willing to pay additional fees and charges? Many
Federal grants depend on local matching funds or local tax efforts.
If the loss of local revenues has a multiplier effect through loss
of grants and causes even more spending cuts, such actions may be
less popular. On the other hand, any compensatory Federal aid that
might result from reduced local services will encourage similar
actions elsewhere.
California is Different. More important, perhaps, is the
fact that the preconditions for Proposition 13 were in many ways
specific to California. Obviously, the initiative procedure
facilitated political action that is normally difficult. But on
top of that, the combination of a heavy reliance on property taxes
and a high level of total local tax burden exist only in several
other states. In addition, no other state--with the possible
exception of Texas-has experienced surpluses like those in.
California. The juxtaposition of high taxes and substantial
unused revenues has been avoided in other states.
C-6
Table 1
STATES WITH THE HIGHEST RATES OF INCREASE IN LOCAL
PROPERTY TAX REVENUE IN RECENT PERIODS
Average rate of increase (per cent)
Fiscal Years:
Fiscal Years:
1975 and 1976
1977 and 1978
U.S.
total
8.7
n.a.
1.
Wyoming
24.0
n.a.
2.
Alaska
22.4
n.a.
3. Colorado
17.2
6.3
4.
Oregon
17.0
11.8
5.
Georgia
15.3
6.9
6.
Florida
14.7
17.4
7.
Texas
14.2
12.6
8.
Idaho
13.7
n.a.
9.
Arizona
13.5
16.1
13.3
12.1
13.2
15.6
12. New Hampshire
13.2
n.a.
13. North Dakota
13.1
n.a.
14. Virginia
12.7
4.9
15. Tennessee
12.6
7.0
16. Hawaii
12.5
1.4
17. CALIFORNIA
12.0
12.2
10. Utah
11.
South Carolina
Source:
Governmental Finances 1974-75, 1975-76 (Bureau of the Census, U.S.
Department of Commerce) and Quarterly Summary of State and Local Tax
Revenue, 1974-75, 1976-77 (Bureau of the Census, U.S. Department of
Commerce).
Note:
Changes are calculated as an average of the per cent changes in
Data for fiscal years 1977 and 1978
the two individual years.
derived from data for major metropolitan counties only; 1978
collections estimated from data for the first half of the fiscal
year.
C-7
Table 2
PROPERTY TAX BURDENS IN FISCAL YEAR 1976
1/
Property taxes per
Property taxes as a proportion
capita1/
of income1/
U.S. average
$255
U.S. average
3.96%.
1. New Jersey
$436
1. Massachusetts
6.54%
2.
Massachusetts
$431
2.
New Jersey
6.01%
3.
New York
$411
3.
South Dakota
6.01%
4.
CALIFORNIA
$397
4.
Montana
5.86%
5.
Connecticut
$370
5.
New York
5.78%
6.
New Hampshire
$339
6.
New Hamphire
5.71%
7. Wyoming, Oregon
$332
7. Vermont
5.60%
8.
$327
8.
5.55%
9. Michigan
$310
9. Oregon
5.26%
10. Vermont
$306
10. Connecticut
5.00%
Montana
CALIFORNIA
Ratios constructed by dividing fiscal year 1976 property tax receipts
by population and personal income in calendar year 1976.
Sources:
Governmental Finances 1975-76 (Bureau of the Census, U.S. Department of Commerce and Survey of Current Business (Bureau of Economic Analysis, U.S. Department of Commerce).
@FedFRASER