The Budget Must Go Up

A Letter from ROBERT MOSES

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HON. LAZARUS JOSEPH
Comptroller of the City of New York
DEAR SIR: —
The Management Committee of which you are Chairman and of which I am a member has now been in existence for almost two years. The City has approved an expenditure of more than $2,000,000 for the surveys thus far authorized, not including overhead contributions of City agencies.
I accepted membership on this Committee reluctantly at the insistence of Mayor O’Dwyer. At one of its early meetings, I strongly urged that its activities be confined to a few definite, specific subjects where technical advice from outside would bring about genuine improvements in administration and actual economies. I suggested several such subjects. Some were adopted but, generally speaking, the scope of staff work has been greatly expanded and, as I feared, extravagant expectations have been aroused as to anticipated achievements. The public is beginning to believe that sufficient savings can be made in various departments to meet the increased cost of salaries and services.
The time has now come to take stock, to inform the public as to what we arc actually driving at, whether or not there will be any substantial savings, to correct misapprehensions, and to fix attention on the basic problems of the City.
I have had considerable personal experience with the improvement of forms of government and have for some years followed efficiency and economy studies, in the federal field from Mr. Taft to Mr. Hoover, in the State from Governor Smith to Governor Dewey, and in the City from John Purroy Mitchel to the present Mayor. I was responsible for the staff which prepared the plan of State reorganization for Governor Smith, and was recenllv identified with Mr. Hoover’s Commission. I have also had responsibility over the years for administration on a fairly large scale and for the expenditure of considerable sums of public and quasi-public money, and have even drawn from ultraconservatives the grudging comment: “What you build costs a lot, but we get something for our money.”Bearing in mind that some of our wealthier citizens regard all government as an organized conspiracy against the taxpayer, this comes as close to praise as anyone who toils in the vineyards of Uncle Sam, Mother Empire State, or Father Knickerbocker can get.
This experience has taught me to be wary of salvation by new organization charts and efficiency installations and extremely suspicious of extravagant claims of net dollar savings in government. Men, not charts and measures, make good government. The ideal thing, of course, is to have firstclass men operating first-class machines, but firstclass men can operate any machine and third-rate people can’t make the best and most modern gadgets work. Budget, efficiency, and planning surveys usually avoid the big immediate problems in favor of small economies or propose long-range revolutionary plans not realizable in our lifetime.
I have learned that government is not just another business with the profit motive left out — a business which, once divorced from politics, can readily be improved by itinerant experts armed with the lingo of efficiency. The electorate is not exactly like a group of stockholders who choose directors to run a corporation, and the Mayor is expected to have qualities, loyalties, and compulsions quite different from those of a bank or business president. It has even been suggested that the Mayor is the conscience of the community as well as its housekeeper!
Capitalism, whose practices government is asked to imitate, has not always been internally healthy and without sin, and it has even been whispered among the unregenerate that great corporations have their own diseases paralleling those of government, including politics, deadheads, nepotism, illusions of grandeur, hardening of the arteries, gout, and the Chinese rot.
My hunch is that Mr. Waterman, the fountain pen manufacturer, who ran against the Honorable James J. Walker for Mayor in 1925 and is the only honest-to-God businessman in my memory who actually took the plunge, would, if he had won, have been the greatest flop in the history of City Hall. I am supported in this cynical observation by practically every reporter, taxi driver, bartender, and other trained observer, philosopher, and pundit in a fairly wide acquaintance.

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WITH these generalizations, let me turn to the big problems of New York City’s administration and financing. We must keep in mind that the City is still growing in population, that it has 8,000,000 people today, that the population in five years will be 8,225,000 and in ten years 8,555,000. Recent metropolitan increases have been accompanied by tremendous geographical shifts from the City to the suburbs, from central areas in the City to outlying areas, from one borough to another, and public and quasi-public housing have brought about complete changes in entire neighborhoods. With these shifts enormous problems involving old and new schools, recreation facilities, hospitals, roads, transportation, health, sanitary and other services have arisen.

It should be noted in passing that the City has plans and specifications, some preliminary but many detailed and final, for well over a billion dollars in capital and assessable improvements, none of them extravagant or frivolous, and that Civilian Defense will require additional capital and expense appropriations. Increased appropriations are also required to pay for the installation and upkeep of new facilities. Debts must be amortized and interest must be paid on them in the expense budget, and personnel and maintenance must be provided for. Recently high prices and inflation, for which the City certainly is not responsible, have raised costs, and federal controls have made orderly city planning difficult.

Meanwhile, the demands of the people have increased. Life, liberty, and the pursuit of happiness have acquired new meanings in terms of municipal expenditures. People are no longer satisfied to live in slums. They properly demand a fair share of the good things of life and look to government, and particularly to municipal government, to provide them. There are more old people than there used to be, and there is more leisure time for recreation. No administration can be elected, and certainly none can survive, which does not recognize these facts. This is the democratic process as we practice it.

New York had a disgracefully inadequate borough park system when Mayor La Guardia took office in 1934. Since then we have doubled its acreage, raised the number of playgrounds from 117 to 550, and quadrupled other recreation facilities, but we have had no proportionate increase in our budget. We have so few attendants and police that vandalism and violence are rampant and cannot be checked. The rank and file of our men are scandalously underpaid and are hardly able to pay for their overalls. Our receipts have risen from $373,773.24 to $1,855,747.

What would the people of the City do? Reduce these facilities? Stop the growth of the system? Leave the old neglected and newly populated neighborhoods as they are? Would they raise the entrance charges at swimming pools and cut out the free periods? Would they put turnstiles and meters on beaches such as Coney Island where we have 10,000 people to the acre on good summer days? We can indeed raise our revenues and in the process freeze out a third of our children and adults. Shall we feed sawdust to the animals in our zoos? Is that what the City wants? Will itinerant management experts from Oshkosh who never operated a peanut stand tell us how to run one of the greatest municipal recreation systems in the world?

We are in the midst of a $150,000,000 hospital expansion program. The new beds must have doctors, nurses, equipment, bandages, food, heat, and current. New parks and playgrounds must have attendants. New schools require teachers, janitors, and supplies. New streets must be swept and lighted. Expressways must be policed. Slums, parking, traffic congestion, smoke, dirt, pollution, disease, gambling, ignorance, dope, organized crime, rackets, vandalism, the law’s delay — everyone demands a sustained drive against them, but nobody wants to pay the bill.

Business and industry also make demands on the government for the many improvements which require the power of eminent domain and the expenditure of public funds to furnish the framework in which private enterprise can flourish, and to enable local business to compete successfully with business in other progressive and ambitious communities. A good example of this is our waterfront, which is so important to the economy of the City that it must be subsidized.

All these factors contribute to a steadily mounting municipal budget, and no management survey by this Committee or any other, by the present staff of outside experts or any which can be recruited, will change this situation. The City budget is bound to go up. An honest effort should be made to anticipate and publicly explain the curve of increase, to keep it within reasonable bounds, and to get a dollar’s worth for each dollar spent.

Economy is, of course, indispensable, but the notion which has been assiduously cultivated by various civic agencies and the press, that enforced efficiency and economy will actually result in iremendous net cuts in the City’s expense budget and make it possible to meet inescapable demands for increases in pay and services within the present total and without new taxes, is so much moonshine.

I recommended and voted for the present Director of the Management Survey. I am for genuine economy, for cutting out waste, for the smallest practical number of competent, decently paid, and well-treated employees, and for savings which do not cut services, but I ask that the experts on whom we are spending $2,000,000 concentrate on the big problems of financing and refrain from making mountains out of molehills. We are attempting to balance the budget of what we hope will continue to be the world’s first city. We are not rewriting Poor Richard’s Almanack, or re-establishing the economic and civic standards of the nineteenth century.

I here is undoubtedly waste in our municipal gov - ernment, and it should bee mercilessly exposed and rooted out, but not at the expense of morale and service. There are too many professional employees on the permanent payrolls preparing specifications and inspecting contract work which could be done faster, cheaper, more smoothly, with less overhead, stalling, and clock-watching, if it were farmed out on a contract basis to the best firms in private business, firms which have to meet payrolls, rent and light bills, to live. The costs of plans and inspection in some departments are astounding. Here is room for savings in both capital and expense budgels. But it is one not welcomed by some of our organized civil service groups.

better executives in all departments will get long-term economies, but they are not easy to find.

The incentives become less rather than greater when investigating committees from Washington, dominated by men like Senator To bey, by clear implication characterize the entire City service as corrupt and incompetent, and imply that men like Costello and Erickson, whom most of us never saw until the Kofauver Committee televised them, run the City’s entire business. I personally never laid eyes on or even remotely heard of these characters in the course of seventeen years in major City work. It is senseless to foul our municipal personnel with unproved charges of general corruption and then demand that better people hurry into government service.

That the standards of government, the levels of public morality, and the ambitions of the young will be permanently elevated by the appearance and sworn testimony of such ineffable characters as Virginia Hill — whose performance my ribald friends unanimously hold to hav e been the high point of the Greatest Minstrel Show On Earth — is a proposition which only professional believers in good clean fun will advance. Miss Hill was no more relevant, in the Kofauver Investigation than Morgan’s Midget at the Stock Market Investigation.

Spasms of reform and efficiency get us nowhere. We need firm objectives. These are orderly growth, wider horizons, decent standards. Toward their realization we require steady, reliable sources of income.

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THERE has been a deal of loose talk about patronage in the City service. There are, to be sure, political jobs in every government, but the possible savings claimed by eliminating them have been fantastically inflated. There are in all 532 exempt positions in our municipality, including elected officials, commissioners, and others, controlled by the City. The salaries attached to these positions aggregate $3 151,492 out of a total personal service appropriation of $693,000,000. If half of all these exempt places could be dropped, the net saving would be less than $2,000,000, or two tenths of one percent of the total.

We must not forget that in the total current annual expense budget of $1,322,181,423.09, mandatory items amount to $402,000,000. Anyone who believes that these mandatory appropriations can actually be substantially reduced with legislative and public approval must have the mentality of a peculiarly guileless child.

It is an undeniable fact that the same individuals and groups who demand drastic economies are equally vociferous in shouting for additional expenditures for their pet projects, groups, and causes. Some are particularly interested in police, others in teachers, still others in transportation workers or nurses. Some are trustees of private hospitals, and in this capacity demand that the City pay these hospitals full cost of maintaining City charges in private institutions. Some are trustees of semi-public educational institutions, museums, foundations, theaters, concerts, and what not, and in t his guise urge greatly increased City appropriations for these excellent causes. They point out that we cannot live by bread alone, that culture too counts, and claim with considerable truth that the City is not living up to its moral and contractual obligations to the arts and sciences.

Often the same critics demand lower assessments on real estate on one day, and on the next claim payments or awards in condemnation far in excess of assessed values. It all depends upon whose blocks are gored! Ambitious parents of small means look to the Hoard of Higher Education to make the gates of our City colleges wide enough for every qualified applicant, but what does “qualified” mean? In theory we might restrict the professions to a small number of the most brilliant students, but that is not the way democracy looks at it. It means more buildings, more teachers, more upkeep. It’s very expensive, but we are committed to it.

Vociferous shouters for economy include prominent figures who for years in the La Guardia administration supported the five-cent fare on the ground that the social implications of a higher rate would be terrible. They prevented the building of new subways when prices were low and materials available. They created our worst budgetary problems, and blame subsequent administrations for them.

Let us consider inevitable increases in the salaries of underpaid City employees.

The total number of City employees is about 217,000.

Here is a table of conservative increases: —

Police $16,000,000

Firemen 9,000,000

Sanitation Workers 2,500,000

Teachers 40,000,000

Board of Transportation Employees 25,000,000

Park Employees 1,500,000

Water, Gas and Electricity Employees 500,000

Clerical and Stenographic Forces 3,500,000

Nurses and Doctors 5,150,000

Other Professional and Technical Forces 500,000

Welfare and Court Workers 4,350,000

If we add these together we see that we require, beginning in 1952, not less than $100,000,000 for increases in wages alone.

Now to this total must be added the cost of additional police, teachers, and other employees, which will bring the total required for expansion of forces to $10,000,000. To these figures must be added the costs of amortization, interest charges, and upkeep arising out of a considerable amount of additional capital construction, totaling another $20,000,000. The grand total of inescapable additions seems, therefore, to be about $130,000,000.

How can any sane and honest person claim that any such sum can be saved by efficiency studies and relatively small economies? For example, improved business methods in the Police Department will not save more than a small fraction of the cost of more officers to make life safe, and of sufficient pay to enable the average policeman to keep his family decently and to resist the temptations to which underpaid men are subject. An adjustment in the age of retirement is certainly in order, but this can’t be made retroactive, may be applied only to newcomers, and therefore means little for many years in terms of savings. Let us anticipate also that at the first public hearing in this matter there will be critics, now screaming for economy, who will question whether vigorous young thugs can be caught by worn-out, middle-aged policemen.

Let me give another example. We have just been forced, because of largely unavoidable delays in the building of new incinerators, to extend the dumping of garbage, refuse, and ashes. In the process we prudently reclaim meadow marsh and lowlands and lands under water for parks, road, and other future public improvements. This reclamation program

means ultimate economy, but the immediate effect is an increase in the budget to furnish better barges, trucks and machinery, dykes, water gates, hydraulic fill, more men and supervisors, and so forth. No immediate savings in the Sanitation Department by efficiency installations will oil set these increases, and only tricky minds can make such a claim.

The net reductions in the 1952 expense budget, through real economies brought about by this Management Survey, cannot possibly exceed $10,000,000. I am all for saving this $10,000,000, but am not for ignoring the $130,000,000 which can be reduced only by injustice to underpaid employees and by curtailing vitally needed services.

The question arises how these bills are to be met and this should be answered by the Committee, its Director, and his staff, l’he establishment of full, true value of real estate will permit an increase in the budget and in borrowing power without imposing new forms of taxation. Do the Director and staff recommend additional federal and state aid Do they recommend attracting more private capital into quasi-public enterprises such as slum clearance? Do they recommend increased fares and other changes? All these are matters which require study and honest presentation, and it is unfortunate that the Management Committee has been pictured as an agency which can meet these problems simply bv improved efficiency and small savings. I want to see something more substantial come out of all this than slogans for the next municipal campaign.

In conclusion, let me suggest that the Management Committee ask the Director and his staff and consultants to furnish the following important information: —

1. How much more money is required in the expense budget for personal service, including net increase in the number and pay of employees? When will we have this estimate?

2. What will the budget increase be to meet the amortization and interest for needed public improvements?

3. What will the budget increase have to be to meet increased cost of food, drugs, equipment, and other materials which the City must buy?

4. How long will it take and how much will it cost to put the reclassification of personnel into effect?

5. In what departments can substantial immediate net savings be made, and what is the total of such savings?

C. What does the aggregate of all anticipated dollar savings due to efficiency and economy amount to?

7. How shall the net increase reached by deducting No. 6 above from the sum of Nos. 1, 2, 3, and 4 be provided for?

8. What legislation, state or local, is required to carry out the Committee’s recommendations and when will it be ready for introduction?

Sincerely,
ROBERT MOSES
Construction Co-ordinator