II. EXECUTIVE BUDGET SYSTEMS ESTABLISHED BY CONSTITUTION. Maryland Budget Amendment.1

Maryland is not only the first of the States to adopt a constitutional provision for a budget system, but it has gone farther than any of the commonwealths in developing the idea of an executive budget. The recent amendment resulted from the efforts of Governor Harrington's Commission on Economy and Efficiency, and was adopted by the voters at the general election in November, 1916, by a vote of 77,478 to 37,100. In general, the amendment follows the principles set forth in the proposed New York Constitution of 1915. Governor to submit Budget. -The Maryland constitutional amendment provides that the Governor shall present a budget to the Legislature within twenty days after the convening of that body, setting forth a complete plan of proposed expenditures and estimated revenues for the two ensuing years (appropriations are made biennially in Maryland). For the purpose of making up the budget, the Governor may require State officials to submit itemized estimates of their appropriations and such other information as he may desire. The Governor may provide for public hearings on all estimates, and may require the attendance of any official or other person applying for State moneys. After such public hearings the Governor may, in his discretion, revise all estimates except those for the judiciary and the Legislature and for the public schools.

Content and Form of Budget. — As to contents, the budget in Maryland includes not only the estimated appropriations for the executive branch of the government, but also those for the judiciary and Legislature as well. The Governor, however, does not have power to revise the estimates of the legislative and judicial departments or for the public schools, and such estimates are included in the budget without alteration.

In regard to form, the budget must include not only a complete plan of proposed expenditures and anticipated revenues for each ensuing fiscal year, but must also show the estimated surplus or deficit of revenues at the end of such year. It must also be accompanied by a statement setting forth the following information: (1) the revenues and expenditures for each of the two fiscal years next preceding; (2)

1 Art. III, Sect. 52, Constitution of Maryland. For text of amendment see Appendix B.

the current assets, liabilities, reserves, and surplus or deficit of the State; (3) the debts and funds of the State; and (4) any explanations the Governor may desire to make as to the important features of the budget, or as to methods for reducing or increasing the State's

revenue.

Budget to be accompanied by a "Budget Bill." After the budget has been prepared, the Governor presents it to the presiding officer of each house, together with a "Budget Bill" providing for all proposed appropriations fully itemized and classified. Before final action has been taken by the Legislature, the Governor, with the consent of that body, may amend or supplement the budget in order to correct an oversight or in case of an emergency. All such amendments or supplements are made a part of the original budget bill.

Limitations upon Legislature. — In acting upon the budget bill, the Legislature may not increase the estimates submitted by the Governor except appropriations for the judiciary and for the Legislature itself. In all other cases the Legislature is limited merely to reducing or striking out items. It is in this respect that the Maryland budget system differs from the budget plans of other States. The Commission on Economy and Efficiency, which recommended the adoption of the present constitutional provision, was of the opinion that such a limitation was necessary in order "to prevent the recurrence of deficits in the finances of the State, and to fix responsibility for any derangement of the financial plans of the Governor. . . . It was recognized that the weakness of all American financial methods, in the Congress of the United States, as well as in the Legislatures of the separate States, was to be found in the practice to which all American legislative bodies are addicted of adding either to the amounts demanded by the administrative departments, or to the items for which appropriations were asked."1

The budget bill when passed by both houses of the Legislature becomes a law immediately, and does not have to be presented to the Governor for his approval. If the Legislature does not act finally upon the bill at least three days before the expiration of the regular session, it is made the duty of the Governor to extend the session for such further period as may be deemed necessary, but no other matter may be considered during the extended session.

1 Report of Commission on Economy and Efficiency of the State of Maryland, 1916, Senate Journal, January 28, 1916, pp. 129-134.

Supplementary Appropriations. - Although the Legislature is prohibited from increasing the items recommended in the Governor's budget, it is given power to enact supplementary appropriation bills for purposes not included therein, provided that a majority vote of all the members elected to each house is obtained. Every such appropriation, however, must be embodied in a separate bill limited to a single object and purpose, and provision must be made in the bill itself for a levy of a tax sufficient in amount to defray the expenses thereof. Moreover, neither house of the Legislature may consider any supplementary appropriation until the general budget bill has been acted upon. Unlike the general appropriation act, all supplementary measures must be presented to the Governor for his approval or veto.

Purpose of Maryland Budget Provision. - According to the Maryland Commission on Economy and Efficiency, the following purposes were kept in mind in framing the above amendment:

To impose upon the Governor the sole responsibility, within the limits of the Constitution and the provisions of existing law, of presenting to the Legislature a complete and comprehensive statement of the needs and resources of the State, based upon:

(a) Estimates made by those applying for State moneys;

(b) Evidence brought out at public hearings on those estimates; and

(c) Administrative revision by the Governor of all estimates except those for the Legislature and the Judiciary and for purposes for which provision has been made by the Constitution or existing law.

To make it impossible for the Legislature so to change the plans proposed by the Governor as to produce a deficit; but

To permit the Legislature to make provision for any purpose not included in the Governor's plan, on the condition that it provide also for the revenue which the accomplishment of its purpose necessitates.1

Budget Provision in the Proposed New York Constitution of 1915.2 Since the recent Maryland budget amendment is very similar to the plan which was included in the proposed New York Constitution of 1915, a brief description of that proposal will be of interest. It should be noted that the Convention was almost unanimous in adopting the budget provision, the vote being 132 to 3; while the press was practically a unit in giving support to the plan.

1 Report of Commission on Economy and Efficiency of the State of Maryland, 1916.

2 Proposed New York Constitution, 1915, Art. V. For text of amendment see Appendix C.

Article V of the proposed constitution would vest the initiation of the budget in the Governor, the provision being that each department should on or before November fifteenth submit to him "itemized estimates of appropriations to meet the financial needs of such department, including a statement in detail of all moneys for which any general or special appropriation is desired, classified according to relative importance and with such explanations as the Governor may require." As in Maryland, the Legislature and judiciary were required to submit their estimates, which were to be included in the budget without revision.

The proposed New York provision required that the Governor should present the budget to the Legislature on or before the first day of February, and that it should be accompanied by a "bill or bills" for all proposed expenditures clearly itemized. Like the Maryland system the Legislature could only reduce or strike out items in the budget except items for the Legislature and judiciary, and the bill was to become a law without further action by the Governor. Neither branch of the Legislature was to consider further appropriation bills until the recommendations of the Governor had been disposed of, and, as in Maryland, each supplementary appropriation was to be made in a separate act limited to a single object and purpose.

Although this plan was unanimously favored by the Convention and the press, and received favorable consideration throughout the country, it was defeated when the Constitution as a whole was rejected at the polls.

III. EXECUTIVE BUDGET SYSTEMS ESTABLISHED BY STATUTE.

In addition to Maryland the States of Minnesota, Nebraska, New Jersey and Ohio have provided for executive budget systems. In these States, however, the budget has merely a statutory basis, due very largely to the fact that there has been no attempt to place any restrictions upon the legislative body. In such cases the budget is only a recommendation from the executive, and the extent to which it is followed depends upon whether the Legislature and the Governor co-operate with each other. The laws of each of the States will be reviewed briefly.

The New Jersey Budget Law.1

The New Jersey budget law was passed in 1916 and provides that the Governor shall be responsible for the preparation of the tentative budget and its presentation to the Legislature. Each department of the State government and every board, commission, institution, or other State agency desiring an annual appropriation must present its requests to the Governor on or before November 15 of each year. It is further required that unofficial organizations and individuals shall likewise present their requests to the Governor. The State treasurer and comptroller must furnish the Governor with complete information as to the probable revenue for the ensuing two years. and as to the present financial condition of the State.

Upon receipt of the requests, the Governor considers them and makes his recommendations, with the limitation that he shall not recommend appropriations in excess of the anticipated revenue. He may summon witnesses and conduct hearings, or appoint some other person to make such examinations. If the additional duties prove too burdensome, the Governor is authorized to appoint officers of the State government, together with not more than two assistants, to act as a committee to aid him in preparing the budget.

Content and Form of Budget. As in Maryland, the budget includes not only the estimates for the executive department, but also for the legislative and judiciary. Since there is no provision to the contrary, it is to be inferred from the statute that the Governor has the same power to revise the estimates of the legislative department as those of the executive branch of the government.

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Budget to be transmitted as a Special Message The Governor is required to transmit the budget to the Legislature on the second Tuesday in January in the form of a special message. "The message of the Governor shall be in such form that it can be easily understood by the average citizen, and shall be printed and a copy thereof presented to each member of the Legislature" and given such other publicity as may be deemed wise. If he thinks it necessary, the Governor may from time to time transmit special messages requesting additional appropriations for purposes not anticipated at the time the provisional budget was submitted to the Legislature.

Appropriations to be made in Single Act. Provision is made that

1 Laws of New Jersey, 1916, chapter 15.