326 THE FISCAL PROBLEM IN MISSOURI 
in the budget or in excess of any additional expenditure 
without first giving notice to the taxpayers and affording 
them the opportunity to appeal. In addition, they are liable 
to the municipal corporation for the amount of the excess 
appropriated, the costs, and a penalty of 25%, of the excess 
appropriation, recoverable by a suit instituted in the name 
of the State of Indiana. 
In its simplest terms the Indiana system is based on local 
initiative. Although local initiative cannot always be relied 
on, the mere fact that an appeal may be made acts as a 
deterrent against excessive or unusual increases in the bud- 
gets. Although the Indiana law reposes final authority in 
the State Board of Tax Commissioners, it should be noted 
that it can take action only on appeal by taxpayers. In 
reality, then, the Indiana system involves central control 
through local initiative. 
A system similar to the Indiana system would no doubt 
be reasonably effective as a means of local expenditure con- 
trol in Missouri. However, it might be opposed on the 
ground that a comparatively small number of taxpayers 
might succeed in reducing expenditures for certain functions 
that the majority of taxpayers were willing to approve. Oppo- 
sition to the plan on that basis would not be entirely valid, 
since adequate reasons must be presented by the petitioners 
before definite action is taken by the central authorities. 
Furthermore, all those affected in any way have a right to 
voice their objections at the public hearing held subsequent 
to the filing of the petition by the taxpayers. 
Unfortunately, economy in the financing of local govern- 
mental functions is not so easily achieved as in the financing 
of business enterprise. During the present century vertical 
and horizontal consolidations in industry have been common. 
If it were recognized that similar results could be obtained 
by consolidating smaller governmental divisions and insti- 
tuting effective systems of budgetary and expenditure con- 
trol, it should be possible at least to hold the cost of local 
government within reasonable limits.