Problems in Municipal Finance

• DOI: 10.1177/106591296201500308
• Date: 01 September 1962
• Published date: 01 September 1962
• Author: Vualter F. Scheffer
• Subject Matter: Articles

PROBLEMS IN MUNICIPAL FINANCE
VUALTER F. SCHEFFER
University of Oklahoma
ETROPOLITAN
GOVERNMENT and its attendant problems are
/ the subject of considerable recent publication.’ Demographic and em-
-~- 1
pirical findings justify this volume of publication which is concerned
mainly with the pattern of urbanization and suburbanization now occurring in the
United States. Each new census confirms the trend toward an increased urbani-
zation so that today by Census Bureau definition, over two out of three Ameri-
cans are urban, or only one out of every eight individuals is classified as rural-
f arm.2 The drama of bigness in the metropolitan phenomenon overshadows the
less dramatic existence of the small and medium sized city and its problems. The
fact remains, however, that incorporated cities of less than 50,000 population ac-
counted for over 50 million or 28.2 per cent of the total population in 1960 as
compared with over 64 million or 36.2 per cent living in cities of over 50,000. If
cities up to 100,000 population are considered as a group, 35.9 per cent of the
population is accounted for as compared with 28.5 per cent in cities of over
100,000 people.3
3
Though many of the smaller cities are within the metropolitan complexes
and as such are a part of the problem of the metropolitan areas, there are still
millions of urban Americans living in cities in which problems of the magnitude
of those identified with the larger metropolitan centers do not exist. The problems
confronting these smaller and medium sized cities, however, often are as difficult
to solve, given the available resources as compared with the larger cities. The
fact is that the social, economic, demographic, and technological changes that
are having so profound an effect on our great urban centers also leave their mark
on the smaller cities and communities. The problems of the large and small ur-
ban development are more a matter of degree. Where the metropolitan city may
be involved in many area and regional-wide problems in services, planning, deci-
sion-making, financing, and a host of other matters,4 the smaller city, existing
1
Besides the volumes of articles, monographs, papers, and speeches of recent date and scores of
surveys of individual metropolitan cities in the past decade, including the New York Metro-
politan Region Study by Harvard University Press, a representative number of books and
studies of length include: John C. Bollens, The States and the Metropolitan Problem (Chi-
cago : Council of State Governments, 1956); The Editors of Fortune, The Exploding Me-
tropolis (Garden City: Doubleday, 1957); Robert M. Fisher (ed.), The Metropolis in Modern
Life (Garden City: Doubleday, 1955); Martin Meyerson, Barbara Terrett, and Paul Ylvisaker
(eds.), "Metropolis in Ferment," Annals of the American Academy of Political and Social
Science, Vol. 314 (November 1957); William A. Robson, Great Cities of the World (New
York: Macmillan, 1957); Robert C. Wood, Suburbia: Its People and Their Politics (Boston:
Houghton Mifflin, 1959); and Daedalus, Journal of the American Academy of Arts and
Science, "The Future Metropolis," Winter 1961.
2
U.S. Bureau of the Census, Statistical Abstract of the United States, 1961 (82nd annual ed.;
Washington, D.C., 1961), p. 613. Under the 1960 Census definition of farm population,
the ratio is 1 to 10.
3

Ibid., p. 23. These percentages exclude unincorporated parts of urbanized areas, equal to 5.5 per
cent of the total population.
4
Several recent general statements of these problems are found in: Committee for Economic
Development, Guiding Metropolitan Growth (New York: August, 1960); Robert C. Wood,
522

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523
outside and often within the metropolitan area, is primarily immersed in the
problem of supplying adequate services to its population, while other matters
remain peripheral to these basic services. The problem is usually that of secur-
ing financial resources adequate to meet the increasing demands for more and
better services. This concern is basic to large metropolitan government also, but
the smaller urban communities have not seriously recognized public respon-
sibilities which go beyond the traditional service function.
The purpose of this paper is to take a look at the problem of municipal
finance of smaller cities by focusing attention on cities of a particular state -
Oklahoma - and to establish the extent of the revenue problem under which
these cities operate, to make some comparisons with cities in other states, and to
suggest measures which might improve their general financial plight. A
study of
this nature might well begin with a brief analysis of the city resident.
The American city-dweller is a complex being. He is a composite of many
conflicting values of our society. Myths, fears, anxieties, loneliness, insecurity,
indiff erences, prejudice, status-seeking -
all are a part of the urbanite to a greater
or lesser degree.5 Furthermore, many identify themselves with the broadly stated
and acceptable precepts of past eras How many today accept the precept which
states: &dquo;that government is best that governs least,&dquo; or the popular principle of
&dquo;government hands off,&dquo; or &dquo;rugged individualism,&dquo; or the belief that whatever
can produce profits must not fall into the hands of government, that capitalism
means democracy, and that to save democracy government must be kept small,
weak, and poor? These clich6s and hackneyed assumptions have deep roots in
our people, even though they are readily ignored when practical sense and selfish-
ness must be satisfied. Thus, we must not permit the city to take over a city bus
line, or a water system, or a golf course, or a museum or other educational or rec-
reational enterprise, or one of the utilities so long as any of them show profitable
operations. When the red ink begins to show on the ledger, it becomes a govern-
ment responsibility to subsidize or to assume the function, and no soul-searching
about the great guiding principles for a free people is necessary. In New York
City today there is a possibility that the rail commuter service will break down
completely if government does not step in with public financial aid or take over
the commuter trains as a public function
7
What does this add up to? For one thing, much of what is the plight of the
American city, and certainly the Oklahoma city, is traceable to the question:
Metropolis Against Itself (New York: Committee for Economic Development, March 1959);
Wilfred Owen, The Metropolitan Transportation Problem (Washington: Brookings, 1957);
Luther Gulick, Metro, Changing Problems and Lines of Attack (Washington: Government
Affairs Institute, 1957).
5
An analysis of what the individual is today in American society is summarized in Charles R.
Adrian, State and Local Governments (New York: McGraw-Hill, 1960), chaps. 2-4. Also
see David Reisman, The Lonely Crowd (Garden City: Doubleday, 1950); Erich Fromm,
Escape From Freedom (New York: Rinehart, 1941); Margaret Mary Wood, Paths of Lone-
liness: The Individual Isolated in Modern Society (New York: Columbia University Press,
1953).
6
Wood, Suburbia, chap. 2.
7

New York Times, September 1, 1960, 26:2; Edward T. Chase, "How to Rescue New York from
Its Port Authority," Harper’s Magazine, 220 (June 1960), 67ff.

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524
&dquo;What is it that the people in the city want?&dquo; We have to determine first
whether demand for more services is legitimate. Are the people ready to sacrifice
somewhere else to make it possible to extend and improve specific services? In
our personal lives we are constantly making decisions which reflect our particular
value system. We pick and choose within and sometimes outside our means.
With limited resources, it may be a new car, or a comfortable and gracious home,
or entertainment and prolonged vacations, or savings for the education of our
children, or advancement of our careers or businesses. In each instance, the
decision reflects what the individual considers important and thereby satisfies
his set of values.
The first prerequisite for the improvement of municipal finance is to create
the setting for that improvement. We cannot expect one to have a desire to see
a great work of art until he is made aware of art, and he cannot appreciate a
work of art until he has been exposed to it. Likewise, in the case of the problem
of the city, a real desire for improvement must first exist before the city can
expect favorable response. This desire can be generated in large measure by the
city. Under energetic imaginative leadership supported by sound and compre-
hensive long-term planning, people can be made aware of alternatives from
which they can pick and choose. With information and education people can
usually be expected to seek advancement and improvement because they become
restless with the status quo. The advertising profession appears to understand
this well. As the people make the choice for improved public services and per-
haps sacrifice to do it, they will not want to lose it. As they become the recip-
ients of better public services, an appreciation of them is likely. There are few who
would return, if given the chance, to the broken and pot-holed street after having
enjoyed a new street, even if it meant a return of the financial investment.
Much more could and should be said on the problem of educating the people
to think favorably of public improvements. Public relations is basic for democ-
racy to work constructively.8 Other factors,...