USA > Massachusetts > Suffolk County > Boston > Fifty years of Boston; a memorial volume issued in commemoration of the tercentenary of 1930; 1880-1930, Pt. 1 > Part 19
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under the caption, "All Due to the Country Members," - "Unquestionably, Boston owes it to the country inember, accustomed to pay as he goes, that she may be able to raise her own revenue and continue business at the City Hall."
It was not many years, however, before this much-mooted question of the efficacy of the debt limit again came to the fore. By 1907, in spite of greater annual revenues afforded by an increased tax rate, the net debt of the city had kept on mounting to heights greater than ever before. The state of alarm in the community was such that the Mayor, John F. Fitzgerald, appointed the Finance Commission already mentioned, headed by ex-Mayor Matthews, to investigate and report. Again it was pointed out: "The common impression that the debt of Boston is effectually limited by law to two or two and one half per cent of the valuation is a misapprehension," and "As indicated in prior reports, the borrowing capacity of the city within the debt limit, so called, has come to be regarded as simply so much money to be spent in addition to the tax levy for current purposes, and the further necessities of the city have been met by constant applications to the Legislature for leave to issue bonds outside the debt limit." (Finance Commission Reports, Volume 2, pages 166, 196.) What a familiar ring that language has when compared with the finding of the 1895 committee!
While the Finance Commission thus laid part of the blame for the burden of debt upon the working of the debt limit, they also took the city government, and especially the City Council, severely to task. And the remedy they ad- vocated this time was a revision of the City Charter, with a concentration of power in the hands of the Mayor. This reform having been accomplished by an act of the Legislature, chapter 486 of 1909, we later find Mr. Matthews, who for a generation had been student, practical exponent, consultant and critic of city affairs, pointing with pride to the results. In a letter to the Charter Revision Commission of 1923, he points out that from 1895 to 1910 the debt increased eighty-nine per cent to $56,777,630.06 and that from 1910 to 1923, the debt decreased ten per cent to $51,105,617.99, and states:
"The reasons why there has been a decrease of ordinary indebted- ness in this city and an increase in other communities of comparable size can for the most part be directly traced to the operation of the charter of 1909.
"The important provisions of this instrument were: (1) the vesting in the Mayor of full concurrent power with the City Council over every item in a loan bill; (2) the creation of the Finance Commission, and (3) the abolition of the election of members of the City Council by districts.
"It is difficult to apportion the credit between these three causes, and the abolition in 1916 of loans as a source of inoney for new school- houses should not be overlooked; but in my opinion, the substitution of a small single-chamber council elected at large has been probably the most important factor in bringing about the reduction of the ordinary city debt."
(House Document 1220, 1924, Report of the Boston Charter Revision Commission.)
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Whether the optimism expressed in 1923 is to be fully justified may to some degree be doubted in the light of the history of the last few years. For once more the debt has commenced to climb and is apparently accelerating its rate of increase. From a low point for the period of $50,464,465 in 1924 it had reached the figure of $66,767,464 by 1930, and the per cent of net debt to valua- tion had risen from 2.79 to 3.39. Once again the efficacy of the debt limit is being called in question, and the large number of special acts passed by the Legislature giving authority to borrow "outside the debt limit" is attracting attention.
THE TAX LIMIT
The history of the relations between city and state in regard to the tax limit runs parallel to that of the debt limit just recounted. We have seen how for fifteen years the $9 rate established by the 1885 Legislature apparently sufficed to pay the expenditures of the city. But, as the 1895 Commission pointed out and as clearly appeared from Mayor Hart's analysis of 1900, this success was only apparent. On page 5 of their report, the commissioners stated:
"An examination of the subjects for which money has been appro- priated during the last ten years shows conclusively that not only has money been borrowed for what were admitted to be current ex- penses, but many of the objects for which debt has been created are of a nature which, we believe, should be treated as current expenses, and, if needed, should be obtained on the 'pay as you go' principle. Such objects, for example, are all the repaving and repairing of streets, the providing of new schoolhouses for the annual increase of school population, the repairing of city buildings, sometimes disguised under the title of 'remodeling,' the furnishing of schoolhouses and other public buildings, and many other objects too numerous to mention. We, therefore, believe that for the purpose of good financial results, this limit has also been a comparative failure. We believe also that it has lulled the citizens into a feeling of false security, and prevented that perpetual watchfulness of municipal expenditure which alone can produce good results."
These arguments still serve in the continuing controversy over the retention or abolition of control by the Legislature of the tax limit.
The $10.50 limit obtained by Mayor Hart proved to be sufficient, with only a five-cent increase in 1910, until 1918. By that year the school limit had been separated from that for the city, and the city's share of our $11.02 tax limit, $6.52, was now established separately at $9.52. Since that date it has been necessary to apply annually to the Legislature for an annual tax limit. There has been an annual controversy between the city authorities and the Governor-appointed Finance Commission, which has furnished amusement for observers and little enlightenment for legislators, and protracted hearings have been held before the Legislature, with an occasional Governor taking a hand,
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THE STATE HOUSE, ILLUMINATED
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CITY HALL, DECORATED FEATURES OF THE TERCENTENARY OBSERVANCE
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all resulting in a more or less blind compromise of conflicting claims, submis- sion of the budget to the Council so late that little time was available for scrutiny, occasional resort to unsound financing by borrowing for current or annually recurring expense, by boosting estimates of revenue, etc., but when all is said and done, little actual limitation of taxes. The departinental expenses actually affected by the tax limit are less than half the city dollar, so it may still be said that the tax limit does not limit. In 1926 an effort was made by Henry L. Shattuck, a Boston representative, then chairman of Ways and Means and perhaps the most respected and influential member of the House, and Senator Eben S. Draper, chairman of the Committee on Municipal Finance, to do away with the tax limit and at the same time place Boston under the requirements of the Municipal Indebtedness Act of 1914. Their attempt was opposed, however, by the Mayor then in office, Malcolm E. Nichols, and was not successful.
Boston organizations, particularly the Boston Real Estate Exchange and the Chamber of Commerce, have taken an active and effective part in these controversies before the Legislature over the tax limit. Until recent years, these organizations have been invariably opposed to a removal of the tax limit. In 1922 a referendum conducted by the Chamber of Commerce, in which the arguments on both sides were set forth at length, resulted in a vote of almost two to one in favor of retention by the Legislature of its control. More recently, however, there have been indications that their attitude is being modified, and in 1930 a brief was submitted on behalf of a joint committee of the two organizations in support of an attempt to set a tax limit high enough so that it would suffice for several years to come. Although the Legislature refused to do this, the tax liinit was set at such a figure that for the first time in years it was not necessary to appropriate every penny of it. And thus Boston demonstrated that for once at least. it could be trusted. Perhaps as a direct result, no controversy developed in the year 1931, and almost without debate a $16 tax limit was again voted.
It is in this field of the tax limit that the restraint or interference of the Legislature is most irksome and the flag of home rule most strongly waved. The general tax limit for the cities of the Commonwealth, established by the Legislature of 1885, was first shot full of holes by exception after exception, and then after exhaustive study was rejected on principle by the Recess Joint Special Committee of 1913. Their study, as far as other cities of the Com- monwealth are concerned, simply confirmed the conclusions reached by the Boston Commissions of 1895 and 1907, namely, that both the debt limit and the tax limit were failures. They find that "the borrowing authority has been used to pay the annual costs of government, and cities and towns alike have spread over a period of ten years the payment of bills incurred for service rendered in only one year The tax limit is treated in greater detail in a subsequent section of this report, but reference is made to it here for the reason that it has a direct bearing upon, and, in the opinion of the committee, is largely responsible for, the issuing of bonds by cities for a period of ten years to pay expenses which properly should have been met out of the annual tax levy." (House Document 1803, 1913, page 41.)
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The remedies the Commission advocated, which were in substance adopted by the Legislature, included the removal of the tax limit for the other cities and towns of the state. Thus Boston remains the only city in the Commonwealth over which the Legislature exercises control as to its tax limit.
SCHOOLS
In the case of the schools and the system of education, development has proceeded not so much by evolution from within, inside general limits, but step by step under the influence of special enactments of the Legislature. Not only the financial policy, but also methods of administration in school building and in problems of education have had the attention of the Legislature through- out the period under review.
Just before the opening of the period the School Committee had been reorganized from a large and unwieldy board to one of twenty-five, consisting of the Mayor, sitting ex officio, and twenty-four inembers, eight of whom were elected at large each year for a three-year term. By the charter amendments of 1885 the Mayor was deprived of his seat on the Board.
The administration of the system of education and the determination of questions of educational policy, up to the limits made possible under the money granted by the city authorities, and under the direction of an executive board of supervisors set up by the 1875 legislation, rested with the School Committee. But the erection of new school buildings to house the increasing school population rested entirely with the City Council. The School Com- mittee could only recommend. This division of authority resulted in neglect of necessary school construction, and public opinion forced a succession of legislative acts culininating in Acts, 1898, chapters 149 and 400, and Acts, 1901, chapter 448. (See Finance Commission Reports, Volume VII, 1911.)
By the legislation of 1898, the schools were given a specific share of the general tax limit and to that extent became financially independent. By the 1901 Act a separate Schoolhouse Department was set up and the duty of selecting land for school purposes and building, furnishing and repairing school buildings was transferred from the School Committee to the new department.
In these and in countless other ways the Legislature was resorted to by specific enactment to bring the development of the school system to what it is today. The size of the School Committee has been reduced to five, although almost annual efforts are made in the Legislature to increase the number again. The Schoolhouse Department has in turn been abolished, and a Board of Com- missioners, appointed one by the School Committee, one by the Mayor, and a third by the other two, selects a paid Superintendent of Construction to perforin the duties of the department, which is now known as the Department of School Buildings. In case of disagreement between the appointees of the School Committee and the Mayor, the Governor, after thirty days, appoints the third commissioner. Whereas for years a policy of borrowing for school- house construction had been followed, and the Act of 1901, which provided for an expenditure of 40 cents on the $1,000 for new buildings and 25 cents on the $1,000 for repairs, had long been honored more in the breach than in the observance, about 1910 a change in policy began to be discussed
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and was officially adopted by an act of the Legislature in 1916. Since that time, almost without exception, new schoolhouses have been regarded as an annually recurring expense and provided for by appropriation from the current tax levy. While the School Committee is now almost entirely independent of any control by the city authorities, it still must look to the Legislature from time to time to establish a tax limit and to authorize specifically the funds desired for new construction.
Throughout the period the cry of "too many frills, fads and fancies," raised in alarmed protest against the mounting share demanded by the schools, has resounded and investigations have been ordered. (See, for example, Finance Commission Reports, Volume VII, 1911, Volume XII, 1916; Survey Committee Report, 1930; Report of Committee to Investigate Methods of Administration in the Boston Schools, January, 1931, City of Boston Printing Department.) On many occasions the troubles of the schools have been taken to the Legislature for final solution, most recently in connection with the abolition of the Schoolhouse Department, as recommended by the Survey Committee of 1929. And as the period closes the number of special bills before the General Court of 1931 relating to the Boston schools is ample evidence that the Legis- lature is still regarded as the body to exercise final control over the Boston . school system.
OTHER FISCAL RELATIONS
In various ways the interests of the city quite naturally come in contact with the taxation laws of the state, and in some cases this relation has given rise to a conflict of opinion which still exists.
The Corporation Tax
The history of corporation taxation affords one such instance, although the controversy to which it gave rise has since been settled. Under the law in effect at the opening of the period the corporation tax was distributed to the city or town where the shareholders maintained their residence. The growth of the city and the increasing tax rate thus made necessary, combined with a more vigorous enforcement of the assessment and taxation of intangible personal property, resulted in driving this wealth from the city and in the colonizing of towns like Orleans, which became notorious for their concentra- tion of wealth and their consequent low tax rate. Over a period of years the discrepancy between the tax rates of various cities and towns grew ever wider and wider. As early as 1892 Mayor Matthews pointed out in his inaugural, in connection with the tax on street railways, that their physical property taxable locally might be very small in comparison with their large corporate excess, the tax on which was distributed to cities and towns on the basis of the residence of shareholders. (Mayor's Inaugural, 1892, page 32.) This point was recognized by the Legislature in chapter 578 of the Acts of 1898, which distributed the entire receipts of the franchise tax on such railways in proportion to the location of the tracks. Again in 1906, a Boston Mayor, John F. Fitzgerald, called attention to the fact that Boston was losing revenue by the incorporation of firms doing a merchandise business in the city, as the
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city thus lost the tax on the personal property and the receipts from the fran- chise tax were distributed to the towns of residence of their shareholders. In 190S the Legislature recognized the validity of this argument and by chapter 614 of the Acts of that year changed the method of distribution so that one half the receipts from the tax went to the town of the shareholder's residence and the other half to the city or town where the corporation did business. By these two acts the revenue of Boston was materially helped at a time when under the operation of the tax laws the city was losing needed income.
In 1919, after a thorough study by a recess Joint Special Committee headed by Malcohn E. Nichols of Boston, then state senator and later Mayor of the city, the principle of these acts was incorporated into law. It was provided that the personal income tax should be returned to cities and towns on the same basis as the assessment of the state tax, i. e., in proportion to the tangible property located therein, and that the corporation tax should be returned to the city or town where the corporation did its business, or if there should be more than one such city or town, then in proportion to the amount of tangible property in each. (Senate Document 313, 1919.)
The result of this legislation has been to give Boston a fairer deal and to narrow down the difference in tax rate between the cities and towns of the Commonwealth.
Motor Vehicle Registration, the Gas Tax, Division of the Highway Fund
In one aspect of the taxation laws the conflict of interest and opinion between city and state still persists, although Boston has no peculiar interest and simply represents the point of view of all the cities and towns of the Com- monwealth. With the advent of the automobile a large new source of revenue became available, and through the exercise of the licensing power the state began to collect increasing sums each year. From the outset the state took the position in its legislation that this money should not go into the general treasury, but should be earmarked for "Highways and Bridges," and embarked upon a policy of building up a State Highway Fund into which all these receipts should go. The city, on the other hand, has throughout the years fought for a share of this fund, taking the position that as the motor vehicles use its streets, which it is forced to maintain, and as it pays the expenses of the courts which colleet the fines, some portion of these funds should find its way into the city treasury.
The position of the state has, however, been steadfastly maintained until very recent years. In some cases of through highways or metropolitan boule- vards, the Legislature has dipped into the highway fund for a portion of the cost, and to that extent has relieved the city somewhat of its burden of metro- politan assessments. As this article is written the Legislature closes a session in which it passed an act increasing the gasolene tax by one cent a gallon and paying over to cities and towns the sum of $2,500,000 in proportion to their valuation. Boston thus receives more than $600,000, which it must use for street purposes. (Acts 1931, chapter 122.)
This recent action was forced by the necessity of relief to the eities, bur- dened by extraordinary expenses for poor relief in a period of depression.
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Whether it will serve as a precedent time alone will prove, but it may be predicted that Boston will not relax its efforts for a larger share of these revenues.
POLITICAL RELATIONS
It is impossible within the limits of this article to set forth in detail the many ways in which legislative control has affected the functions of the city government. The source of authority for the activities of almost every city department is to be found in some enactment of the Legislature. As before explained, the changes in the city's fundamental law have in almost all cases taken place by enactment of the Legislature and without recourse to the citi- zens of Boston. Reference will here be made in detail only to the police and civil service.
The Police
The same Legislature that assumed control over the tax limit of Boston and put into effect certain charter changes also took charge of the police situa- tion. By chapter 323 of the Acts of 1885 a board of three commissioners appointed by the Governor was substituted for a board appointed by the Mayor. The licensing power, however, was left with the board, although much of the criticism which occasioned the act had arisen because of alleged abuse of the licensing authority. It was not many years before this change was challenged by a popular Democratic Governor, William E. Russell, who attempted to remove one of the commissioners and also to restore the power of appointment to the Mayor. The strongly Republican Council was too much for him and his attempt was not successful. Fromn that day to the present hardly a year has passed without urgent appeals to the Legislature to restore the prerogative of appointing the head of the police force to the Mayor of the city. Mayor Matthews inveighed against this assumption of control, as did Mayor Collins, but there has been no relaxation. On the contrary, in 1906 the General Court enacted legislation placing the administration of the force in the hands of a single commissioner instead of a board of three, and set up an independent licensing board, also to be appointed by the Governor. The duties of this latter board have declined in importance since the advent of prohibition.
In other ways, too, the Commonwealth has shown its interest in the affairs of the police. Under the existing legislation the city must pay the bills and has little effective control over the budget submitted by the Police Commis- sioner. Various acts have from time to time changed the number of patrol- men in the force, and regulated the pension system, the mode of appointment, the conditions of duty, etc.
As the period closes, we find the Legislature ordering an investigation by the Attorney-General of the Commonwealth into the activities of a member of the force, whose actions in conducting raids, etc., had long been notorious. The ramifications of this investigation disclosed a situation in the Police Depart- ment which resulted in the resignation of the Police Commissioner then in office and the appointment by the Governor of a new incumbent.
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Civil Service
In 1884, as part of the nation-wide movement for civil service reform, the state assumed a certain degree of control of the appointments to the city's working force. In general, throughout the period there has been very little criticism of the principles of the Civil Service Act, although from time to time there has been much fault found with the workings of the law in its details and with its administration under the rules and regulations of the State Civil Service Commission. By the charter amendments of 1909 the principle was extended further to apply to the heads of city departments. Although the Finance Commission, in recommending this change, asserted that there was no intention to interfere with the general principle of home rule or to make the Mayor's appointments subject to confirmation by a state board, and that their sole purpose was to insure the appointment of qualified experts to head the city departments, nevertheless this provision of the City Charter gave rise to many bitter controversies between the Mayor and the Civil Service Commission, and was resented as a violation of the home rule principle. Finally, in 1930, a controversy occurring over the confirmation of one of the Mayor's appointments, the Legislature repealed this provision, and, as the period closes, the Mayor has a free hand in his appointment of his department heads.
SUMMARY OF THE RELATIONS BETWEEN BOSTON AND THE STATE
It will thus be seen that at the end of the period the state still retains control of many of the inunicipal activities of Boston. By the continuing existence of a statutory debt limit, the City, restricted in its borrowing power, is forced to resort to the Legislature for authority to borrow for many projects; by the retention of the tax limit set each year by the Legislature, the Mayor is forced annually to present to the Legislature a request for the authority to obtain sufficient revenue from taxation to carry out the activities of the municipal departments, and the School Committee must obtain from the Legis- lature the necessary authority for funds for school building and for admin- istration purposes; the permanent Governor-appointed Finance Commission is still in existence and actively exercises its powers of investigation and rec- ommendation; the control and management of the police force is in the hands of a commissioner appointed by the Governor; the Licensing Board is subject to gubernatorial appointment; and on many boards and commissions, established from time to time, the state insists on representation, such as, for example, the commission to build a Suffolk County Court House, and others.
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