THE FIRST STATE EXECUTIVE BUDGET1

T

EMERSON C. HARRINGTON

Governor of Maryland

HE Executive Budget was established in Maryland by

an amendment to our state constitution. The legislature of Maryland at its regular session of 1916 passed a bill amending the constitution of the state so as to provide for an Executive Budget for Maryland, and as required under our constitution this amendment was submitted to the people of our state for their approval or rejection. At the general election of 1916 it was approved by the people by an overwhelming majority, and therefore all appropriations thereafter had to be made in accordance with the Budget Amendment. The manner of passing appropriations, leading as it did to appropriations by the legislature of 1914, for the fiscal years intervening from one legislature to another, of over $1,500,000 in excess of the revenues for the same time, at a time when the governor was of one political faith and the legislature of another, had caused both political parties to make the fiscal condition of the state the leading issue, and thereby both of the two great political parties declared in favor of an Executive Budget. The result was that the passage of the amendment by the legislature and its ratification by the people was proposed and carried most opportunely. Our legislatures meet every two years, so that the real test or try-out occurred at the last legislature, the legislature of 1918.

I presume the manner of appropriating money by the legislatures of the different states has heretofore been similar to our own, that the Finance or Ways and Means Committee would not bring out the bill until almost the last moment. Then the bill carrying all the expenditures for the state departments and the state government was finally passed in the last hours under a suspension of the rules, generally allowing each senator or delegate practically what he wanted for his own county or locality, regardless of the amount appropriated, and leaving it to the executive to do the paring. In our state the executive, it is true, could cut down or

veto the separate items of an appropriation bill, but I understand that in many states even this cannot be done. The members of the two committees appropriated this money upon no scientific or expert plan and had not before them any synopsis or summary either of the revenues or their contemplated expenditures. Largely it was a question of log rolling and of senatorial or delegate courtesy. In our state we had also a system of continuing or annual appropriations, which when made and marked annual would go on forever as appropriations without any further legislative action. Some of these appropriations of ours were of over 100 years' standing, and most of them were not known to exist by the average member of the legislature. As a preliminary to all budget making the legislature of 1916 wiped out all continuing appropriations of every kind or character whatsoever, so that no money could be available except what was specially stated in the appropriation bill.

Our Budget Amendment was drawn after the most careful consideration by a Budget Committee which I appointed, with President Goodnow, of Johns Hopkins University, as chairman.

I will briefly state the points of this amendment:

Section 52. The general assembly shall not appropriate any money out of the Treasury except with the following provisions:

Sub-Section A: Every Appropriation Bill shall be either a Budget Bill, or a Supplementary Appropriation Bill, as hereinafter mentioned.

Sub-Section B: Within twenty days after the convening of the general assembly (except in the case of a newly elected governor) and then within thirty days after his inauguration (unless such time shall be extended by the general assembly for the session at which the Budget is to be submitted, the governor shall submit to the general assembly two budgets, one for each of the ensuing fiscal years. Each budget shall contain a complete plan of proposed expenditures and estimated revenues for the particular fiscal year to which it relates; and shall show the estimated surplus or deficit of revenue at the end of such year. Accompanying each budget shall be a statement showing: (1) the revenues and expenditures for each of the two fiscal years next preceding; (2) the current assets, liabilities, reserves and surplus or deficit of the state; (3) the debts and fund of the state; (4) an estimate of the state's financial condition as of the beginning and end of each of the fiscal years covered by the two budgets above provided; (5) any explanation the governor may desire to make as to the important features of any budget and any suggestion as to methods for the reduction or increase of the state's revenue.

Second. Each budget shall be divided into two parts, and the first part shall be designated "governmental appropriations" and shall embrace an

itemized estimate of the appropriations: (1) for the general assembly as certified to the governor in the manner hereinafter provided; (2) for the executive department; (3) for the judiciary department as provided by law, certified to the governor by the comptroller; (4) to pay and discharge the principal and interest of the debt of the state of Maryland in conformity with Section 34 of Article III of the constitution, and all laws enacted in pursuance thereof; (5) for the salaries payable by the state under the constitution and laws of the state; (6) for the establishment and maintenance throughout the state of a thorough and efficient system of public schools in conformity with Article VIII of the constitution and with the laws of the state; (7) for such other purposes as are set forth in the constitution of the state.

Third. The second part shall be designated "general appropriations," and shall include all other estimates of appropriations.

The governor shall deliver to the presiding officer of each house the budgets and a bill for all the proposed appropriations of the budgets clearly itemized and classified; and the presiding officer of each house shall promptly cause said bill to be introduced therein, and such bill shall be known as the "Budget Bill." The governor may, before final action thereon by the general assembly, amend or supplement either of said budgets to correct an oversight or in case of an emergency, with the consent of the general assembly, by delivering such an amendment or supplement to the presiding officers of both houses; and such amendment or supplement shall thereby become a part of said budget bill as an addition to the items of said bill or as a modification of or a substitute for any item of said bill such amendment or supplement may affect.

The general assembly shall not amend the budget bill so as to affect either the obligations of the state under Section 34 of Article III of the constitution, or the provision made by the laws of the state for the establishment and maintenance of a system of public schools, or the payment of any salaries required to be paid by the state of Maryland by the constitution thereof.

The general assembly may increase or diminish the items relating to the general assembly and may increase, but not decrease, the items therein relating to the judiciary. In all other respects the legislature cannot increase any items of appropriation, but may strike out or decrease, with one exception, that is, it cannot decrease the salary of a public official during his legal tenure of office.

The budget bill as then passed by both houses becomes a law without the governor's signature.

The governor or any one of the department heads designated by the governor has the right to appear and be heard in respect to

it is made his duty to do so if requested by either house of the legislature, to answer inquiries relating thereto.

Sub-Section C; Supplementary Appropriation Bills: Neither house shall consider other appropriations until the Budget Bill has been finally acted upon by both houses, and no such other appropriation shall be valid except in accordance with the provisions following: (1) Every such appropriation shall be embodied in a separate bill limited to some single work, object or purpose therein stated and called herein a supplementary appropriation bill; (2) Each supplementary appropriation bill shall provide the revenue necessary to pay the approriation thereby made by a tax, direct or indirect, to be laid and collected as shall be decided in said Bill.

A majority in each house of the whole number elected is required to pass a supplementary bill and the yeas and nays must be recorded. The requirement for the revenue to be provided in the bill places the responsibility, whether the tax be a direct or an indirect one. Moreover, all supplementary bills are to be presented to the governor and are subject to his veto under the same conditions as now apply.

Nothing, however, shall be construed to prevent the legislature, under the same conditions and qualifications as now, from passing any bill to pay for any obligation of the state of Maryland under the provisions of section 10 of article 1 of the Constitution of the United States. Should the budget bill not be finally acted upon within three days before the expiration of the regular session, the governor can by proclamation extend the term, but no other matter save the budget bill shall be considered except as to its cost. Likewise, the governor is given full power to require all departments and heads to report to him and all institutions applying for or receiving state aid to give such itemized estimates and information as, and in such form as he may desire.

The governor has the power to provide for public hearings and to compel attendance of all necessary parties.

The legislature may enact such laws as may be found necessary from time to time to carry out the provisions of this constitutional amendment.

In the case of any inconsistency between any provisions of this amendment and any other of the constitution, the provision of this amendment shall prevail. Nothing in the amendment, however, shall effect any obligations as to the public debt as provided for in section 34 of article 10 of our Constitution; and the governor may as heretofore call an extra session of the legislature for the same

purposes as now provided, and in such a case the legislature can consider any emergency appropriation or appropriations.

In our budget system, the items of the budget can be reduced or eliminated, but not increased by the legislature. This limitation is fundamental in my opinion for any sound budget system. It will be noticed that the governor has to include the salaries provided for by law for the public officials, also the salaries and expenses of the judiciary have to be included as certified to him by the controller as fixed by statute, and third, that the legislature has control of its own running expenses, the governor having to put into the budget what the presiding officers of the legislature estimate as the proper expenditures for the succeeding legislature. The idea was that the governor should not have the power to reduce salaries fixed by the constitution or by law, and that the independence of the judiciary and the legislature as to their own expenses should be maintained.

Now for the operation of the Executive Budget. The legislature of 1916 had not specially provided for any aid for the governor in preparing the budget, nor had they appropriated any special sum for that purpose, but the governor had a very fair contingent fund which was available for such a contingency, and as the present governor had been the controller of the state for the four years previous to his election as governor he had the advantage of intimate knowledge of the fiscal affairs of the state and of the needs and the necessities of the different departments. He was, therefore, enabled by the help of Mr. A. E. Buck, recommended by Dr. Beard of the Bureau of Municipal Research of New York city, together with his own office force, to complete the budget practically within the time prescribed by the constitutional amendment.

Our legislature of 1918 made appropriations for the two following fiscal years, the first beginning October 1, 1918, and ending September 30, 1919, and the second beginning October 1, 1919, and ending September 30, 1920, called with us the fiscal years 19 and 20.

First we prepared and forwarded to all state institutions or departments certain blanks to be filled in by the proper authorities and requiring them to furnish, first, all their receipts and expenditures for 1917, giving the names and positions of all employes, and, second, their requirements for 1919 and 1920, under proper