Leadership, autobiography by Rudolph Giuliani: on Budget & Economy

Rudy Giuliani: Under-estimate future revenue to force cost containment

On July 12, 2001, I gave my final presentation to the NY State Financial Control Board. I pegged revenues for 2001 at $40,640,000,000. For my next four years of estimates, I used:

2002: $39,698,000,000
2003: $39,713,000,000
2004: $40,976,000,000
2005: $42,228,000,000

Did I really think NYC would not match 2001's revenue until 2004? Certainly not. But it was my policy to underestimate anticipated revenues because it forced those who worked for me to contain costs. By assuming low revenues, I could argue against unnecessary expenditures and maintain a frugal culture, even during flush times.

Too often, organizations base their projections on best-case scenarios. A city will borrow substantially after a healthy year only to find, when revenues sink, that it needs to ramp up taxes simply to cover its debt. Or a business will hire new staff and plush up its headquarters, even when its strong recent past cannot be relied on to continue.

Source: Leadership, autobiography by Rudolph Giuliani, p.156-157 Oct 1, 2002

*The above quotations are from Leadership, autobiography by Rudolph Giuliani with Ken Kurson.* Click here for definitions & background information on Budget & Economy. Click here for more quotes by Rudy Giuliani on Budget & Economy.
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