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 budgets.
 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 control
 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. Opposition
 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 governmental
 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 instituting
 effective systems of budgetary and expenditure control,
 it should be possible at least to hold the cost of local
government within reasonable limits.