officers will be appointed by the governor and will be removable by the state tax commission with the consent of the governor; they are to assess annually both real and personal property, under the supervision of the state tax commission. For each county there will be a board of complaints composed of three members not more than two of whom shall be of the same political party; they are to be appointed by the state tax commission for overlapping terms of three years, and will be removable by the state commission, with consent of the governor; they are to hear and determine complaints relating to the assessment of both real ar.d personal property; appeal from their decisions may be taken to the state tax commission. The elective township and ward assessors of personal property, the quadrennial appraisers of real estate, and the county and city boards of equalization and review are abolished by the act.

The bill providing for the state levy of one-half mill, which is to be outside of the Smith One Per Cent limit for improved highways was passed.

A proposed constitutional amendment exempting the bonds of all political divisions of the state from taxation was adopted for submission at the election in November of this year. Such bonds were exempted by constitutional amendment adopted in 1905; but this exemption was removed by one of the amendments adopted in 1912. (April 21, 1913.)

COUNTY BUDGETS: ECONOMY AND EFFICIENCY

IN EXPENDITURES

BY JAMES E. BOYLE, PH.D.,

Professor of Economics and Political Science, University of North Dakota.

"People seldom improve when they have no model but themselves to copy." This simple truth helps explain the bad financial situation existing in many of our three thousand counties. Counties have not been able to compare themselves with other counties in their own state or with more distant counties in other states. Such a comparison would have led to progress. In this article I shall point out some existing defects in county finances and in county accounting, and the progress which is being made in curing those defects. And in conclusion I shall attempt to formulate the principles which must be found in any ideal system of economy and efficiency in county budgetary matters.

I. PRESENT SITUATION BAD

1. In County Finances

In making some inquiries recently concerning county expenditures for bridges, I found that two adjoining counties had bought steel bridges of the same size and style and of the same company, and at about the same time. One county paid at the rate of twentyone dollars per running foot; the other at the rate of forty-two dollars, or exactly twice as much. This case is believed to be typical of the lax methods of buying supplies for county purposes.

The practice of piling up a big floating debt is another evil all too common. This is done in spite of the fact that the constitution of the state usually places definite limits to the county tax levy.

Governor Johnson of Minnesota in his message of January 9, 1907, and Governor Dawson of West Virginia in his message of January 8, 1907, both pointed out this evil in their states. Governors' messages and state statutes everywhere show the prevalence of the practice. These documents form an echo of the old, old story of our county government: there is the constitutional debt and tax levy limit; the county spends more than this limit; warrants are

issued and stamped unpaid for want of funds; the county piles up a big floating debt; then the county is either permitted to fund the debt and issue bonds in excess of the bond limit, or to effect a compromise and scale down the debt-a quasi repudiation of part of the debt. In the early '70's and '80's Kansas was one of the conspicuous offenders in this debt-making, debt-scaling process. That this state has not wholly lost appetite for this discreditable practice would seem evident from a recent statute (Laws of 1907, ch. 137) providing that cities of the first and second classes may compromise and refund outstanding indebtedness. Constitutional limitations and legislative control have proved inadequate. Central administrative control is essential to sound financing.

Counties deposit their cash balances in banks. In some cases interest is paid to the county; in most cases, however, judging from replies from the various states, no interest reaches the county treasury.

Among the other common shortcomings of county financial administration are the following:

1. Expensive junkets by county boards to inspect county buildings in distant states. Expert advice on county improvements is now available in a much better and cheaper form.

2. Exercise of unauthorized powers, such as the abatement of taxes.

3. County charges not strictly construed. Often claims are paid which are not authorized by the express provisions of the law. Everything from cigars and fountain pens to banquets is found under this charge.

4. Inadequate audit or no audit at all. In many cases where the law provides for an audit of bills, the statute is weak and a perfunctory audit is the result.

5. Additional compensation, under various guises. Various county officers augment their legal compensation by putting in claims for extra work, for extra clerk hire, for materials and supplies bought, and by various other devices.

6. Temporary loans. In some cases bonded debts are created for current expenses.

7. Fees. Fees are often wrongfully kept or applied. In some instances the public has no knowledge of the officer's compensation since he keeps the fees and makes no accounting.

8. Defective county organization. Too many co-ordinate elective officials, with no centralization of financial powers, and no administrative headship.

The county has been our most neglected unit of government. Too much politics and too little business has been the situation. Inefficient personnel has been the rule. Tenure of office is short. Merit is not rewarded. The county office is a blind alley, leading nowhere. Hence the lax methods; the losses in buying materials and constructing permanent improvements.

Underlying all these evils is the evil of bad accounting.

2. Situation in County Accounting

"A statistical jungle" is the name applied by Mr. Chas. F. Gettemy to the town and city finances of Massachusetts. This phrase might well be applied to county accounting in most of the American states. Some evidence on this point will make the matter clear.

For instance we read in the auditors' report for New Castle county, Delaware, for 1912, these typical statements:

"We wish to state that in our opinion there is urgent need for necessary legislation to permit the county to adopt some comprehensive system of bookkeeping; a system that would centralize the accounts of the various offices in one place, where the condition of the county's affairs could be readily ascertained. . . . As will be seen by the statement of bonded indebtedness, $695,000 of borrowed money has been invested in highway improvements. There are no books to show what the county owns for the expenditure of this

sum.

"We cannot find any explanation of the item 'Unappropriated Funds' which appears in the comptroller's statement amounting to $166,854.84."

This same report contains a statement of taxes, for various purposes, such as, for instance, "Poor Tax $1,018.69." These fractional cents are carried out punctiliously through several columns of figures. This nice regard for petty details and jaunty disregard for big and essential things is one of the most universal defects in county accounting.

Mobile county, Alabama, for instance, tells us how much the county expended for "fresh meat" for paupers, but not how many

paupers were fed or what the per capita cost of poor relief is, or how much is spent for the construction and how much for the maintenance of good roads, or how much for education.

Dane county, Wisconsin, issues a 200-page pamphlet entitled "Proceedings of the Board of Supervisors," which contains, besides the proceedings, the abstract of the assessment of each town (township) in the county, a comparative statement for four years of the assessed value of each town, village and city in the county, detailed statistics of all the principal crops for each town, the annual report of the commissioners of the poor, and, finally, good illustrations showing the county's poor farm and buildings. While this booklet is in most respects an ideal publication for the county-in fact a model for other counties to copy-yet from the standpoint of county finances, it has one serious defect: It contains no summary of county finances. And this is exactly the question of first importance to the county and to the taxpayer, into whose hands this booklet comes.

Dozens of similar pamphlets might be cited, notably those from the counties of Los Angeles, Denver, Kings (Washington), etc., all excellent in most ways, yet deficient in their method of reporting county finances. Some omit the inventory of county property. Some omit statistics of the preceding year, so that no comparison of the two years can be made. Few attempt to print a county budget. The exception to this is Erie county, New York, which prints the proceedings of the board of supervisors, and a complete, detailed budget for the current year and the estimated budget for the coming year. Few show the debt transactions for the year. Very few have solved the problem of classifying receipts and expenditures. And very few counties use the same form of reports.

Enough has been said to indicate the great diversity of methods in keeping and reporting county accounts. Uniform county accounting would seem to appeal to every man as the best method. Yet I find a difference of opinion here among county treasurers and county auditing officers.

One county treasurer in Wisconsin writes, "Every county ought to have the right to dictate its own way of accounting." A county clerk in Virginia takes exactly the opposite view.

Uniform accounting is one test that measures efficiency in county government. It is refreshing to note the great progress already made and now being made in securing this improvement in various states of the Union.