New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-06-20
The A 3 G. of City Finance Explanation OF the
Relation Between the Average Citizen and the SPend-
ine of the New York City Budget-Provident AND lam
Bond Issue Explained by Cys Channoer1a1m

sum Of bonds that would have been issued under
the old policy to pay for improvements. And so this
goes on until the savings in interest finally in about
20 years aggregates the full amount Of the annual
APPROPRIATION, which assuming for purposes
of illustration does not vary. After this time
the annual interest saving will represent net
reduction in the budget TIE present generation
in carrying the city's great debt bears the burden
past generations committed TO posterity. II will
have the satisfaction of realizing however, that
il is willing no such heritage TO the next genera
ton, but on the contrary, practically debt free
city, ready for the splendid destiny that the next
so years surely has in store for it.
The embarrassment Of this new plan, which
MAYOR Mitchell calls the pay-as-you-go plan, occurs
in the first years of its operation until the de-
clining interest charge equals or overtops the
amount of the annual improvement budget.
This change in the city's fiscal policy is purely
voluntary, and not being required by law Will be
subject to modification by succeeding administra-
tions. There is, however, sound principle under
lying the plan, though expedency presented BY the
emergency arising on the outbreak OF the war
and not principle determined it. Once the prin-
chile becomes clearly established succeeding ad-
ministrations will not be easily tempted back into
the fatal comfort of postponing until the future
the cost Of present Improvements.
Many Of these assets are inextinguishable, such
as parks and streets. Others are transitory and
will need to be replaced. Heretofore when
school needed replacing new bonds were issued.
In other words the school made to represent
a permanent debt, since bonds issued for the orig
inal school to be replaced generally scarcely
paid when the new school was acquired. The city
in this way was kept continually in debt for and
never in unqualified ownership of its properties.
Under the new plan it will be reasonable to ap-
propriate each year sum sufficient to replace out
worn equipment included in the city's capital or
working facilities account. These appropriations
may either be spent Immediately for new equip
ment or set aside a reserve against deprecia-
ton, to be spent when disrepair or obsolescence
makes replacement necessary. In this way from
generation to generation there will be kept intact
the city's accumulated working facilities, It's
school houses, fire and police stations, hospitals,
bridges, etc.
To arrive at a proper determination Of the an
nual replacement needs two things must be done.
The city must have engineering appraisal made
of its deteriorating properties to determine their
probable life 1t must estimate the rate of the
deterioration through use or obsoescence, in ex-
cess of the reservations made through repairs.
Secondly, it must determine definite policy Of
repair ana upkeep, so that properties purchaseu
for the benefit of several generations may not be
consumed within the space of single generation
by negligence in maintenance
An alternative plan is to leave to each year the
determination of that years needs This is easier,
hut probably more costly in the end. Just the
present city debt grew through the cheerful habit
of officials and taxpayers Of failing to look for
ward to the accumulation Of oppressive interest
demands, so demands for new facilities TO
place the outworn will in irregular and in
convenient times, unless by foresight and intelli-
gence they are provided for in anticipation.
These charges for repairs and requirements Of
existing facilities, both from the standpoint Of
good management and convenient financing, should
be included in the annual expense budget, and
paid for out of current revenues, each years
charges out Of the income for that year.
Then comes the extension to plant for nom
revenue producing purposes. New schools for
new population new facilities of various kinds to
!