Analysis of Operating Expenses in New York City's Fiscal Year 1978 Capital Budget

The operating expenses contained in New York City's fiscal year 1978 capital budget are understated but only by a relatively small amount. This amount was determined using a strict interpretation of the criteria, which are more strict than many municipalities might currently be following. However, in view of the current fiscal problems of the city and its need to restore investor confidence, it is in the city's best interest to apply strict criteria in determining whether budget items are valid capital outlays or operating expenses.