american jurisprudence, second edition

database updated may 2003

municipal corporations, counties, and other political subdivisions

kenneth w. biedzynski, j.d., richard b. gallagher, j.d., stephanie giggetts,

j.d., gary a. hughes, j.d., mindy pittell hurwitz, j.d., theresa l. leming,

j.d., william lindsley, j.d., eric c. surette, j.d., tim a. thomas, j.d., and

jane e. lehman, j.d. and anne e. melley, j.d., of the national legal research

group, inc.

xiv. fiscal matters, in general

a. in general

topic summary; topic contents; parallel references; list of topics; index

§ 535. budgetary matters

  a "budget" is a statement of the financial position of the government, for a definite period of time, based upon an estimate of proposed expenditures and anticipated revenues. [fn1] the purposes, generally, of statutory or charter municipal budgeting requirements are to inculcate sound business principles and practices into the municipal economy, with particular reference to avoidance of waste, extravagance, and ill-considered expenditures, and to give the members of the taxpaying public a better understanding of the financial affairs of the municipality in the anticipated disposition of public moneys. [fn2] similarly, the purpose of constitutional provisions prohibiting cities and other political subdivisions of a state from becoming indebted in an amount exceeding, in any year, the income and revenue provided for such year is to force cities to operate on a cash basis and to prevent indebtedness extending beyond one year. [fn3] some charters provide that the governing body of a city shall have no authority to appropriate money to any purpose not provided in the budget, except in case of an emergency or a contingency contemplated by the charter. [fn4] moreover, a city may not levy a tax or make an expenditure unless it is in accordance with the budget, although a tax is not necessarily rendered invalid because of noncompliance with budget provisions. [fn5] however, a municipality cannot evade its liability to pay stated salaries of its officials by failing to include them in its budget, or even by failing to embrace them in its tax levy. [fn6]

  generally, the authority to budget and appropriate revenue is an inherent power of all counties. [fn7] in some jurisdictions, county commissioners have a duty to set a budget for all county expenditures on an annual basis, and to assist them in preparing the budget, commissioners have the authority to order surveys or studies with respect to any budget item, along with the discretion to use or ignore any results in making budgetary decisions; no other county officer shares co-equal status with the commissioners in fulfilling this role, and thus, only commissioners are entitled to participate in the formulation of a proposed budget. [fn8] a board of county commissioners is given a wide degree of discretion in determining budgetary matters for a county. [fn9] in the absence of a legislative prohibition, a county's decision to allocate funds to a specific purpose should be upheld. [fn10]

              comment: in an action by a county supervisor of elections seeking judicial review of a denial of a budget request by her office for funds to maintain a computer system to process voting registration data, the supervisor of elections would have the burden of proving that the board of county commissioners arbitrarily and capriciously denied the request; the board of commissioners would not have the burden of proving the request was unreasonable and unnecessary. [fn11]

  however a commission may not exercise unfettered discretion to reject "reasonable" budget requests for adequate performance of essential functions of government, based upon how those requests impact upon the totality of county's budget. [fn12]moreover, as soon as provisions of statutes governing the examination of county budgets are fulfilled, the budget is placed beyond the excise board's reach, and becomes an appropriation; that appropriation, which at its final stage passed the excise board's scrutiny, must control over any discordant resolutions by a county board of commissioners which either preceded or followed the de jure budget's birth. [fn13] in the event a county suffers a revenue shortfall, the excise board is authorized to reduce the county budget to meet revenue loss, by first cutting expenses which are statutorily authorized but not required, and next by cutting items whose funding is required by the legislature but not by the constitution, and finally cutting constitutionally mandated governmental functions. [fn14]

              illustration: the trial court abused its discretion in granting a preliminary injunction enjoining a county board of supervisors from proceeding with layoffs and demotions in the sheriff's department and ordering the board to continue to provide staffing and funding at previous levels, where there was no possibility that the sheriff would prevail on the merits; the board was acting within the scope of its constitutional role in undertaking to reduce the size of the sheriff's staff. [fn15]

  in addition, when items budgeted are excessive, the county excise board has authority to reduce the proposed budget. [fn16] moreover, a city may put excess revenue from a specific tax into a general fund to offset deficits elsewhere in the city budget. [fn17]

[fn1]. korn v. gulotta, 72 n.y.2d 363, 534 n.y.s.2d 108, 530 n.e.2d 816 (1988), related reference, 186 a.d.2d 198, 587 n.y.s.2d 1007 (2d dep't 1992), leave to appeal dismissed, 81 n.y.2d 759, 594 n.y.s.2d 719, 610 n.e.2d 392 (1992), reargument denied, 81 n.y.2d 835, 595 n.y.s.2d 398, 611 n.e.2d 299 (1993).

[fn2]. wilmerding v. laguardia, 268 a.d. 496, 52 n.y.s.2d 169 (1st dep't 1944), motion denied, 268 a.d. 1027, 52 n.y.s.2d 941 (1st dep't 1945); edwards v. city of renton, 67 wash. 2d 598, 409 p.2d 153, 33 a.l.r.3d 1154 (1965).

[fn3]. state ex rel. brown v. city of warr acres, 1997 ok 117, 946 p.2d 1140 (okla. 1997).

[fn4]. moore v. logan, 10 s.w.2d 428 (tex. civ. app. beaumont 1928), writ dismissed, (oct. 23, 1929).

[fn5]. rachford v. city of port neches, 96 s.w.2d 167 (tex. civ. app. beaumont 1936), writ refused.

[fn6]. metropolitan life ins. co. v. deasy, 41 cal. app. 667, 183 p. 243 (1st dist. 1919).

[fn7]. city of annapolis v. anne arundel county, 347 md. 1, 698 a.2d 523 (1997).

[fn8]. lewis v. monroe county, 737 a.2d 843 (pa. commw. ct. 1999), appeal denied, 753 a.2d 822 (pa. 2000).

[fn9]. city of aurora v. board of county com'rs of county of adams, 919 p.2d 198 (colo. 1996), reh'g denied, (july 29, 1996).

[fn10]. city of aurora v. board of county com'rs of county of adams, 919 p.2d 198 (colo. 1996), reh'g denied, (july 29, 1996).

[fn11]. pinellas county v. nelson, 362 so. 2d 279 (fla. 1978).

[fn12]. etowah county com'n v. hayes, 569 so. 2d 397 (ala. 1990).

[fn13]. state ex rel. macy v. board of county com'rs of county of oklahoma, 1999 ok 53, 986 p.2d 1130 (okla. 1999).

[fn14]. morton v. adair county excise bd., 1989 ok 174, 780 p.2d 707 (okla. 1989).

[fn15]. county of butte v. superior court, 176 cal. app. 3d 693, 222 cal. rptr. 429 (3d dist. 1985).

[fn16]. abel v. madden, 1987 ok 55, 738 p.2d 1340 (okla. 1987).

[fn17]. city of wichita falls v. kemp public library bd. of trustees, 593 s.w.2d 834 (tex. civ. app. fort worth 1980), writ refused n.r.e.,(may 21, 1980) and (not followed as dicta on other grounds, tomlinson v. tomlinson, 960 s.w.2d 337 (tex. app. corpus christi 1997)).

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 amjur munccorp § 535

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