Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: [v. 97, no. 2505: Articles]: March 18, 1916

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REAL ESTATE AND 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¬ tonomy." 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¬ ceeding year. 2. Giving publicity to the plan proposed. 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 them. 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 June said: "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¬ tions: 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 by borrowing? 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 accomplished: The average annual increase in expen¬ ditures during the control of the board has decreased as follows: Per cent. 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