Under Prussian laws a city may plan its budget for one, two or three years, but as a rule it is done yearly, the financial year begin ning 1 April and ending 31 March. The vari ous departments present their estimates of rev enues and expenditures to the magistrate (the administrative board which controls and di rects the city government, prepares the business for the council, supervises municipal enter prises, has custody of revenues, etc.), which makes the annual estimate not later than 1 January preceding the fiscal year. After public examination and criticism for eight days it is formally presented to the city council whose approval is necessary before it becomes the established budget. When the preliminary esti mate is made, a copy is sent to the authorities superior to the municipality, but their sanction, which the law requires, is necessary only if new taxes are imposed or old ones changed. If the superior authorities do not object and the city council approve, the estimates become the bud get for the fiscal year following. Special budgets may be passed if unforeseen events demand the raising of more revenues, but these occasions are few. The forms and details of a municipal budget are not prescribed by general law, but the main features are as follows: The municipal budget consists of two general classes of minor or subsidiary budgets: (1) those which either increase or decrease taxa tion, and (2) those which do not, such as sav ings bank budgets, foundation budgets, etc. Each of these general classes is again divided into two heads—ordinary administration and extraordinary administration; then follow the minor subdivisions or special items of adminis tration from which the original or primary estimates are made; that is to say, before the general budget is drafted its makers must know the needs of the ultimate administrative di visions though in order of presentation the gen eral budget precedes the separate estimates. The ordinary part of the budget includes regu lar current income derived from communal property, taxes and exemptions, dues, fees, etc., and the portion granted to the municipality by the state, province and circle. The extraordi nary part includes receipts from special, or exceptional sources, such as legacies, gifts, loans, sales of land, etc. There is no state audit of local finance in Germany, but a °revision° of the local treasury is made by the executive every month on specified days and at least once a year a °surprise revisionx' is made when no notice is given. Further control of the budget is provided by requiring the magis trate to keep and publish a register of munici pal property, both real and personal.
The methods pursued in British and French cities are in marked contrast, since the British municipality is practically autonomous (even the small measure of control exercised by the central authorities, the Local Government Board and the National Exchequer, being con ceded grudgingly), while in France a large measure of local control has been sacrificed to the efficiency of centralized authority. English cities may exercise only those powers expressly granted them by Parliament and accordingly constantly petition for special acts granting additional powers. The English mayor is a figurehead, the town council possessing the chief powers and doing the bulk of the work through its committees. The finance committee is held to strict account for the finances of all committees; it negotiates all loans, invests sink ing funds, prepares the annual financial state ment and manages the tax collections. Through it must be made all warrants for payment of authorized appropriations, It acts as a consul tative committee on rate estimates, conferring with other committees as to financial needs for the following year, revising their estimates, and then presenting the completed statement to the council, together with the precept (tax rate) deemed necessary to meet the estimated expend ditures. Though the finance committee presents the estimate the several committees of the council are responsible for the expenditures with regard to the purposes entrusted to them and are expected to keep the expenditures within the amount allowed by the council. The manner of levying the rate varies in different cities. Leeds has a city rate, a consolidated rate and a highway rate levied by town council, besides which there is a poor rate levied by the overseers of the poor, but all are collected in one. Birmingham levies but one, the borough
rate, covering the whole expenditure of the corporation which can be charged on the rate, though there is an additional poor rate to meet expenditures entailed by the poor law proper.
In the French city the mayor prepares the budget for the council's consideration at the May meeting, this being known as the original budget, which may be succeeded toward the close of the year by a supplemental budget. The receipts are denominated ordinary (stable and permanent) and extraordinary (irregular and occasional) ; the expenditures are optional and obligatory, the former resting in the dis cretion of the local authorities — in the mayor, if he can influence the council sufficiently. Obligatory expenditures must be met out of established income, and if not adequately pro vided for, the higher authorities make forcible provision by inscription d'office or official entry upon the budget. Cities with annual receipts of less than $750,000 must submit their budgets to the prefect of their department; those with revenues above this sum are subject to the min istry of the interior, representing the president of the republic. Should the mayor and council prove obstinate regarding obligatory expendi tures they may be suspended from office by the central authorities. When approved, the French budget cannot undergo the slightest alteration. When additional expenditures are found necessary they are incorporated in the supplementary budget, drawn up by the mayor and considered by the council at the May session of the year to which it applies — that is, a year after the budget whose transac tions it completes. In this budget no obligatory expenditures appear as they have been cared for in the regular budget. If the contemplated expenditures do not appear warranted to the higher authorities they may be rejected or re duced by a decree of the President or by a res olution of the prefect in charge of the depart ment, but these authorities arc not permitted to increase expenditures or to introduce new ones.
In England the system of audits is perfunc tory and not taken seriously in the large cities, since there are three auditors, each acting independently and serving without pay. Hence some cities employ salaried professional ac countants. In France, however, there is a National Court of Accounts which surveys and audits the whole of the accounts of national revenue and expenditure of the departments (provinces) and of all towns, districts and pub lic institutions having an annual revenue ex ceeding $7,500. Towns below this limit send their accounts to the prefectoral qouncil for audit.
Canadian cities have been revising their budgetary practices. In 1913 Toronto formed a Civic Survey Committee which consulted with the New York Bureau of Municipal Research to ascertain defects and suggest remedies. The report of the committee has been made, but up to 1918 no drastic changes had been made and hence the methods pursued are about the same as before, though the tendency is gradually to fix the responsibility more clearly. At present the estimates are made out by the heads of de partments and submitted to standing commit tees, resubmitted to the board of 'control and submitted by them, amended, to the council, who pass the final estimates. The word ((budget° is not officially used in connection with the Toronto city government. The coun cil attempts to control expenditure by passing vouchers before payment; its tendency, owing to lack of details supporting the estimates, is to over-estimate income and under-estimate ex penses for the purpose of keeping down the tax rate, which process results in a deficit.
Bibliography.— Adams, H. C., 'Science of Finance> (Pt. I, New York 1912) ; Bastable, C. F., 'Public Finance' (3d ed., London 1913) ; Dawson, William H., 'Municipal Life and Gov ernment in Germany' (2d ed., New York 1916) ; Plehn, C. C., 'Introduction to Public Finance' (3d ed., New York 1911) • National Monetary Commission, 'Report on Fiscal Systems of the United States, England, France and Germany' (1910) ; articles by Karl F. Geiser, D. C. Bald win and H. L. Brittain in 'Annals of the Amer ican Academy of Political and Social Science' (Vol. LXII, pp. 192-210, Philadelphia 1915), giving extensive bibliography by H. A. Rider.