The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-02-20

power to increase revenues. 1t is in
a. strait Jacket, and bankruptcy
not later than next autumn is a vir-
tual certainty unless the strait
Jacket is removed.
This can be demonstrated. For
the year 1884, of which nearly one
sixth has already elapsed, the budget
as adopted by the Tammany admin
istration of Mayor O'Brien calls for
expenditures of $551 100000. The
taxes that may be levied on real
estate are limited by agreement with
the bankers, and also fixed by law
at $438,000,000. Other revenues
under existing law are estimated at
S82,0OO,OOO. This leaves deficit of
about $30000,000.
TINE La Guardia administration
i is compelled, therefore, to cut
expenses or find new revenues, or
to borrow $3O,O0O,000. 1t can not
borrow from private sources be-
cause it can not sell its bonds. 1t
has no power to levy new taxes.
1t has insufficient power to reduce
expenses.
The struggle at Albany turns on
a request for power to reduce eX-
penses. Now there is only one
place in the budget where expenses
can be cut in any substantial
amount, and that is in the appro-
pirations for salaries and wages.
The reason is as follows: Out OF
the $551 100000 to be spent, $685.
100000 are for the service of the
debt. This figure can not be re-
duced. For suppose the city should
decide to force the bondhOlders to
take less interest. 1t could con-
ceivably do that. But only on the
theory that it did not have to Dor
row any more from them.
The city has, in fact, to borrow
several hundred millions from them
this year, and obviously this would
be impossible if it defaulted on the
old money. Yet without the new
money public works will come to
a standstill, and pay rolls which are
always paid before taxes come in
can not be met. Default, even If it
were morally justifiable, would
therefore, be no solution. The $685.
100000 for debt charges has to be
paid.
There is another $115,000,000 or so
in the budget which can not be
cut and have to be paid. Of this
about SCI 100000 goes for pensions
to retired employees, widows, the
aged, the veterans and for support
of charitable institutions. Another
$12,000,000 or so is needed to light
the city, to pay rent on leased
buildings and for telephones.
4 MOTHER $24,OOO,oOO has to be
IA set aside by law to cover I'M
collected taxes. About $19,000,000 is
left for repairs to all the city's prop
critics and for supplies; it is almost
certainly too little.
The debt charges plus these more
or less untouchable items make a
total of $273,OOO,OOO The only thing
left are personal services, that is
salaries and wages, amounting to
1858, 100000, chargeable against the
budget. The city also receives
$40, 100000 from the state applicable
to teachers salaries. The total pay
roll is therefore $3170OO,000. There
is no other place in the budget
where the whole or any substantial
part of the deficit can be made up
If the budget is to be balanced with
out new taxes, the city pay roll has
to be reduced about 10 per cent.
But the city has not now the le-
gal power to reduce its whole pay
roll. The largest item in it is for
teachers salaries, which accounts
for S123,OOO,O0O out Of $317,0OO,O00
and they are fixed by the state. 1t
has no power over some Of the
courts. though it paws the bills. II