The first thing to learn about a city budget is that it is not set in stone. The funds appropriated will not necessarily be spent, and anticipated revenues will, in all likelihood, be higher or lower than predicted. Expenditure trends usually follow receipts.
 
The budget should therefore be thought of as a snapshot, at a particular point in time, as required by the City Charter, the Financial Plan Budget in January (links to the Mayor's Financial Plan for 2004-2008 can be found here), the Executive Budget in April, and the adopted budget in June. But even the adopted budget is not final. It is subject to periodic modification during the year, depending on conditions that may develop on the revenue or expense sides.
 
There are, however, some real decisions that are involved in the budget: who, if anyone, will be laid off or hired; which capital projects will be undertaken and which will be deferred or abandoned; and where will resources be allocated. Budget messages are also good times to announce tax increases or reductions. It is the mayor’s day, to show how he would shape city government for the next year.
 
In our system of municipal government, however, the mayor simply proposes a budget; the legislature (in our case, the City Council) either amends it or adopts its own budget. After that, Mayor Giuliani spent what he thought proper. It is difficult to spend more than the council has appropriated, but easy to spend less. The council budget has always been higher than the mayor’s because the members want to show how influential and kindly they are by responding to citywide interest groups and adding items for their local districts.  
 
Through a process known as logrolling, the entire array of pork-barrel projects (some of which are quite meritorious and are omitted from the budget just to give councilmembers something to do) is consolidated into one budget resolution that provides for all districts and which is passed overwhelmingly. The only districts shut out are those whose councilmembers have displeased the speaker.
 
For example, when Peter Vallone, father of the current councilmember, was speaker (1986-2001), the one member whose district received its regular appropriations but no extras was Sal Albanese of Brooklyn, a frequent critic of Vallone’s leadership who voted against the budget. This process gives whoever is speaker leverage in inducing members to vote for unpopular legislation; if they don’t obey their orders, they won’t get their rations.  Or, as the tale goes, if you didn’t help bake the pie, don’t ask for a bite.
 
The council districts themselves are tailored with great care for the protection of incumbents of both parties. In the two-year period just ended, councilmembers were more likely to be assassinated (one) or convicted of bribery and imprisoned (one) than defeated for reelection (none). Term limits, which I originally doubted, have become the only legal method of avoiding the life tenure that state legislators now enjoy.
 
They have resulted, however, in generational succession: Five members (Clarke, Dilan, Foster, Rivera and Vallone) are offspring of their predecessors, and four others (Addabbo, Boyland, Serrano, and Weprin) are children of other elected officials. The nine pedigreed members come from Brooklyn, the Bronx, and Queens. They are no worse than legacies in colleges, or the President of the United States.
 
There are, however, certain constraints that the mayor faces in budgeting:

(1)  The budget must be balanced, as required by state law, in compliance with generally accepted accounting principles, and, as the mayor said in jest, with “very few shenanigans.”
(2)  Taxes cannot be raised so high that businesses and citizens who pay them will leave the city for lower-tax areas.
(3)  Services cannot be reduced so much that businesses and citizens who rely on them will leave for safer and cleaner places.

To achieve this balance, the colossal workforce must be reduced. The skill the mayor must show is in managing the reduction with minimum loss of actual service. We should also remember that the so-called mandatory, nondiscretionary expenditures are climbing much faster than controllable costs. Each year, the percentage of the budget that the mayor and the council control becomes smaller.  Therefore, the annual effort to balance the budget becomes more difficult.
 
Traditionally, the City Council is not as fiscally responsible as the mayor. After all, the mayor already has the job he wanted, while the ambitious councilmembers are still striving for his position or any other ways to better their lot or save their skins as term limits loom.
 
To climb the greased pole, they make extravagant, unaffordable and inconsistent promises that they need not worry about fulfilling until they become mayor, at which time, if God is just, they will be beleaguered by new councilmembers who have even less sense of responsibility.
 
Political campaigns now begin a year earlier than they used to. John F. Kennedy announced he would run for president on Jan. 2, 1960. On the same relative date 44 years later, the candidates have crisscrossed the country, and the result could have been just about settled (although it has not been).
 
The 2005 mayoral campaign is gearing up, and the candidates’ statements have become more influenced by electoral prospects. We are still in the middle of the mayoral term, and politicizing every issue (e.g., lead paint) will have a negative effect on the rational conduct of public affairs.
 
So we are in for a rough ride. There is a famous saying, attributed to Aeschylus (525-456 BCE), “In war, truth is the first casualty.” One might expand that wisdom to political campaigns: “In elections, reason is the first casualty,” as we watch both retreads and rookies, blinded by ambition and overweening sense of self-importance, offer proposals that defy the laws of mathematics and common sense.

To be fair, the mayor’s optimistic budget skirts the edge of reality, providing that wage increases be funded by productivity gains. It would be nice if he could do it, but no one ever has. The agreement on health benefits reached with the city’s unions is a real achievement, but wages represent a far higher hurdle. But whatever the mayor proposed, even if it were completely over the top, the council would add even more to it, to show what good folks they are.

Meanwhile, the state budget was presented last week by Governor Pataki. It comes out to $99.8 billion, which suggests a temperature reading that is just short of being a fever. What I wrote about the city pretty much applies to the state, except that the state budget dance is a troika, with Pataki, Bruno, and Silver, while the city dance is a duet, performed by a senior partner and a junior partner trying to move up in the firm.

You can get the details of the state budget by linking Al Baker, who wrote the story in this morning’s Times. There are three fine analytic pieces inside the paper, by James C. McKinley, Jr., Michael Cooper, and Marc Santora and Greg Winter. The weather is colder in Albany, but people’s spirits are warmer. That could be because the state election is a year farther away than the city’s. It also helps that neither Mr. Bruno nor Mr. Silver is running for Governor.

The weather is colder in Albany, but people’s spirits are warmer. That could be because the state election is a year further away than the city’s. It also helps that neither Mr. Bruno nor Mr. Silver is running for governor.

Henry Stern’s civil service title was administrative staff analyst in the Office of Management and Budget. It was attained through an open competitive examination in 1970.