In December, the media traditionally report on the adoption of the budget for the coming year. For example, the Kharkiv City Council approved the city’s draft budget for 2020 on November 27, and it must be said that this topic has long taken on a scandalous tone. At the beginning of the 20th century, this issue received no less attention in our city—and, incidentally, there were just as many controversial decisions and scandals. So today, I invite anyone interested to take a brief trip back to 1902 to find out what decisions were made back then.
It all began on November 28, when Kharkiv’s budget for 1903—compiled by the city administration and the finance commission—was distributed to all members of the Kharkiv City Duma and published in the newspapers. According to the budget, revenues for the coming year—including arrears and cash on hand—totaled 2,641,649 rubles, while expenditures—including debts from previous years—amounted to 2,641,581 rubles. Compared to the 1902 budget, an increase in revenue of 116,562 rubles and an increase in expenditures of 88,677 rubles were expected for the new year.
In newspaper articles about the city budget for 1903, we read the following:
The projected increase in revenue from the assessment tax (by 13,101 rubles) and from municipal property and rent-based taxes (by 23,397 rubles) is encouraging. It is safe to say that revenue from these sources will increase year after year, as real estate is gradually being revalued and rent on municipal properties has finally begun to rise through public auctions.
Among the projected revenues, a particularly substantial income of 145,000 rubles from the profits of the municipal bank stands out, attesting to the institution’s brilliant performance, which has remained unaffected even by the general severe crisis. Revenue from the hospital fee is expected to increase by 3,000 rubles, which will be the result of measures recently implemented by the police to ensure that unskilled laborers and domestic servants residing in the city are required to have hospital cards.
It is also interesting to note that, alas, a number of expense categories have remained unchanged from those days to the present. For example, when drafting Kharkiv’s new budget, the city administration took great care to accommodate its former and current employees. As a result, a budget line item of 22,778 rubles was included, which was planned to be spent on:
— pension payments — 11,858 rubles;
— benefits — 4,920 rubles;
— awards (bonuses) — 6,000 rubles.
Compared to 1902, these expenditures increased by 4,834 rubles. Although, to be fair, it is worth noting that, according to the draft city budget for 1903, expenditures increased due to:
— salary supplements for teachers at city schools and an increase in their housing allowances and bonus payments;
— an increase in the salaries of medical personnel.
However, in drawing up a balanced budget, the city administration overlooked important and pressing issues. For 1903, no funding was allocated for:
— the establishment of a health department within the municipal administration;
— the maintenance of the infectious disease wards currently under construction at the Nikolaevskaya Hospital;
— the renovation of the Alexandrovskaya Hospital;
— the establishment of a medical station in the Zhuravlivka district, which the poor had requested and which the Sanitary Commission had insisted be established.
Funding for other hospitals was also cut, and requests from many charitable organizations for increased grants were denied. This is likely why the media and the public reacted so negatively to spending increases in other areas, which they labeled nothing less than “budget flaws”—for example, spending on the maintenance of boulevards and public gardens.
On December 9, a meeting of the Kharkiv City Council was held, chaired by Mayor Alexander Konstantinovich Pogorelko. Since the City Council members had had more than enough time to review the budget proposal, the main purpose of the meeting was to examine the budget in detail and approve it. In those days, just as today, the residents of Kharkiv took an active interest in all city affairs, so on December 9, a large crowd gathered in the gallery of the meeting hall, along with newspaper reporters. The draft budget for city revenues and expenditures for 1903, submitted by the city administration and the finance committee, sparked a heated debate among our city’s council members that day.
Duma Deputy Nikolai Nikolaevich Saltykov proposed increasing budget revenue by renewing lease contracts for premises in the Moscow and Nikolaev Rows and by opening up pastureland for cultivation. Other council members proposed increasing revenue by introducing new taxes or raising existing ones. For example, they stated the following:
“We could increase revenue from the land: they’re charging very little for the racetrack. But the residents bring in half a million to the betting pool at this racetrack each season…”
However, the budget’s expenditure items sparked far more debate among the council members. The most striking remarks came from Stepan Semenovich Kgaevsky. He began by pointing out the need to include in the 1903 budget funds for the construction of public restrooms in Kharkiv. In response to this issue, the mayor stated that estimates for four heated public restrooms, at 4,000 rubles each, had already been prepared. However, it was not possible to include this amount in the city budget; nevertheless, the matter would be resolved at the earliest opportunity. In response, Stepan Kgaevsky urged the council not to wait for better times but simply to reduce spending on the maintenance of public squares and parks. This idea was immediately supported by another council member, Lev Mikhailovich Vyshinsky, who added that Kharkiv’s public squares “serve only the Ministry of Finance, providing secluded spots for drunkards.” Stepan Semenovich Kgaevsky went on to state that the cost of maintaining public squares is very high and that the sum of 19,000 rubles could be reduced by a factor of three. Kgaevsky also drew attention to the exorbitant expenses in the new budget related to the purchase of fuel for municipal institutions and recommended reducing them through open bidding. Moreover, Councilman Mikhail Ivanovich Svetukhin, addressing the issue of inflated prices, noted that “200 rubles are spent annually on drawing up a schedule for streetlight operating hours, as agreed with the director of the Real School; however, if a mathematics student were hired, he could draw up a schedule covering the next 19 years for those same 200 rubles….” So, as we can see, a number of phenomena in our city have a history and traditions that run very deep.
After lengthy debates, Kharkiv’s budget for 1903 was approved by the Duma members in the amount of 2,646,552 rubles. On December 31, 1902, key details about the budget appeared in local newspapers, which noted that the city was making rapid progress. However, they also pointed out that, in terms of revenue, Kharkiv was in a less favorable position than other cities that possessed large real estate holdings or collected special taxes. The main sources of revenue were expected to come from municipal enterprises:
— Power plant — 191,000 rubles;
— Slaughterhouse — 174,000 rubles;
— City Bank — 145,000 rubles.
Various taxes also played an equally important role in increasing the city’s revenue: property tax, taxes on trade and crafts, and taxes on horses and carriages.
On the expenditure side, the following was ultimately approved.
1) Funding for the police and fire department increased to 194,000 rubles.
2) The budget allocated 158,610 rubles for public education (school operations, etc.).
3) Expenditures for health care totaled 314,915 rubles.
It is interesting to note that in this area, our city was doing quite well—it was even ahead of others. In Moscow, for example, the cost of a patient’s meals was 14 kopecks, while in Kharkiv it was 19 kopecks. Thanks to these funds, the salaries of Kharkiv doctors were also significantly higher than in other cities. Furthermore, in addition to the aforementioned amount, plans were made in 1903 to allocate approximately 90,000 rubles from the city’s revenues for the construction of new medical facilities.
Per capita budget expenditures on healthcare were as follows:
— Kharkiv — 2 rubles;
— Saint Petersburg — 1 ruble 89 kopecks;
— Riga — 1 ruble 54 kopecks;
— Moscow — 1 ruble 41 kopecks.
As we can see, the situation regarding the adoption of the city budget was, in some respects, somewhat similar to today’s, and in others—significantly better. Furthermore, in addition to approving the budget, Kharkiv actively celebrated Christmas and New Year’s in December 1902.
