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NEW YORK, MARCH 18, 1916
BUDGET MAKING FOR NEW YORK CITY UNDER
A REGIME OF HOME RULE
By Dr. FREDERICK A. CLEVELAND, Dire .-tor, Bureau of Municipal Research
IN the first article of this series, entitled
"Why We Do Not Have Home
Rule," this conclusion was reached:
"Until we have a charter which
provides for a responsible executive,
■\vith adequate machinery for mak¬
ing the administration responsive to
the will of the people, it may be
confidently expected that bills will
be sent to Albany each year op¬
posed to the principle of local au¬
What Is a Budget?
In simple terms a budget is a plan of
financing next year's business.
The only way to keep the government
of a city in adjustment with public opin¬
ion is to adopt a procedure which will
provide for five things:
1. The preparation and submission
by the executive of a plan for carry¬
ing on the business for the next suc¬
2. Giving publicity to the plan
3. Finding out -whether the plan
will be supported by a majority be¬
fore it is approved.
4. Holding officers responsible
for faithful execution of the plan,
after it is approved.
5. Enforcing- this responsibility
by promptly retiring those officers
'who do not retain support of the
majority; or, to put it in another
way, electing and retaining officers
who do have a majority back of
These are not alone the essentials of
a home rule budget procedure; they are
the five essentials of popular govern¬
ment; they are the essentials of any
form of democratic government which
is entitled to the continued confidence
and respect of a majority of the people.
Any city charter which provides for
these five essentials will give the peo¬
ple a governrnent which can be trusted
—a government which will be protected
against the assaults of persons in the
community who seek to gain a personal
or partisan advantage through State or
other interference. A charter whicli fails
to provide these five essentials will be
the victim of frequent and successful
legislative attacks; it will prevent effec¬
tive leadership for doing the things the
people want done.
New York City Without a Budget.
Cornptrollcr Prendergast begins his
article, published in Record and Guide,
February 26, with this statement:
"Since 1899, when the first budget
was made, the city population has
increased 39 per cent., but the bud¬
get has grown in the same period
104 per cent."
The term bud.get, as here used is only
a part of an official vernacular. As a
matter of fact New York City has not
now and never has had a budget. And
this is stated on the authority of the
Coinptroller himself, who when out of
the city at the conference of mayors last
"We have been too prone to re¬
gard the annual statement of our
appropriations as a budget. It has
enjoyed this name although no one,
who knows what a budget is has
DR. FREDERICK A. CLEVELAND.
pretended to regard the (so-called)
budget of New York, for example,
as a budget in the true sense."
New York City Carries on a $250,000,-
000 Business Without a Plan.
New Vork City's govermnent is not
trusted by the people, and officers who
are trying to serve the city well often
feel discouraged by reason of this fact.
They are scarcely seated before malcon¬
tents begin to create unfavorable opin¬
ion, and to do this in a way such that
officers cannot find out what is beini^
said and done against them—without
any provision made for bringing criti¬
cism into the open and meeting it pub¬
licly. The people here do not trust the
officers because they are equally help¬
less; they hear the rumors, the gossip,
the complaints circulated by irresponsi¬
ble persons; they have nothing but
garbled, one-sided reports; they do not
have accurate knowledge of what is go¬
ing on; they are not even kept informed
about what is proposed. Officers of New
York City have not yet completed the
first step toward putting themselves in
a position to be trusted—they have not
fully met the first requirement of ef¬
ficient management under a regime of
genuine home rule. The citizens have
never had placed before them, by exe¬
cutives, a definite financial plan—a pro¬
posed sailing chart for next year whicli
officers are asking to have approved.
Essentials of a Budget as Business Plan.
A budget as a business plan should
set forth proposals in such form that it
may be used as a basis for discussion
and reaching decisions on these ques¬
1. What is the city going to do?
—Its proposed work program.
2. What does it need to buy?—
Its proposed contractual relations.
3. What will be the total cost?—
Its estimated expenditures.
4. Who will be entrusted with
doing the work, making the pur¬
chases, vouching for expenditures?
5. What is the amount of money
which must be raised?
6. How much sliould be raised by
taxation and other forins of reve¬
nue, and how much should be raised
When officers present their requests
for appropriations each year they do not
present the info.rmation needed to an¬
swer any of these questions fully. What
the Board of Estimate and Apportion¬
ment (as an executive council) at¬
tempts to do is to obtain statements and
data on the cost of current operation and
maintenance—that part of the city's ex¬
penditures which they will ask to have
charged against such part of the reve¬
nues of the city as go into the "general
fund"; they give a part picture of what
work is proposed; they give a part pic¬
ture of what they propose to purchase;
they give a part picture of expenditures
to be authorized; they give a part pic¬
ture of amounts to be raised; they leave
to inference what amount of the cost is
to be met by revenue and what amount
is to be met by borrowing.
What Has Been Done in Five Years.
Ijut what has been accomplished is of
vast importance. Until eight years ago
the whole problem of city government
was shrouded in mystery. The atten¬
tion given to planning the city's current
expenses (about 75 per cent, of the total
annual cost) has completely revolution¬
ized its methods. What Comptroller
Prendergast might have said but did not
say is this: If we take that part of pub¬
lic expenditures which has been made
the subject of careful planning; review¬
ing and criticism each year during the
last eight years, this is what has been
The average annual increase in expen¬
ditures during the control of the board
has decreased as follows:
1!I03-100.8 average annual increase...... 8.38
l!l(l8-lt)13 average annual increase...... 5.25
11110-1013 average annual increase......4.23
1010-1014 average annual increase...... 3.63
1013-1014 average annual Increase...... 1..83
IOI4-IOI0 decrease ......................34
If the same average rate of increase
had been maintained as obtained during
the years 1903-1908, the 1916 appropria¬
tions would have been $30,000,000 larger
than they actually are. When it is con¬
sidered that the average annual increase
in population is 3.51 per cent, and that
tlie service given to the public has not
only kept pace with population, but a
large number of new services have been
added, this is a very favorable showing.
The parts in which there has been a
steady and overwhelming increase have
been those expenditures not included in
annual estimates and reviews—in those
things for which neither officers nor
citizens have been conscious of a plan—
in those things for which the city has
had no prevision.
The Pay-As-You-Go Agreement.
Because the city had been short-
si.ghted. had exercised little prevision,
when the great war broke out its finances
became so far involved in international
exchange that it was necessary to enter
into an agreement which presumed some
sort of future financial planning. Be¬
cause the city had over a thousand mil¬
lion dollars debt, and had gotten nearly