New York City Lays Off 10,000 Workers : Fiscal crisis: Dinkins remains deadlocked with the City Council on how to close the $3.5-billion gap by Sunday’s deadline.

This city’s fiscal crisis hit with magnum force Friday as more than 10,000 municipal workers were laid off from their jobs in often tearful and heart-wrenching scenes unseen here since the financial collapse of the mid-1970s.

“It’s like a funeral wake here,” said a hospital workers’ union chief at Harlem Hospital in Manhattan. “We are seeing the death of a great hospital. People are crying and moaning.”

Meanwhile, Mayor David N. Dinkins and the New York City Council remained at an impasse over how to close a record $3.5-billion shortfall in the city’s budget for the new fiscal year.

Dinkins wants to boost property taxes to help plug the gap and perhaps rehire some of the workers, while council leaders are calling for even deeper spending cuts that could result in 4,800 additional layoffs. The deadline for approving the budget is midnight Sunday.

Negotiations with the city’s municipal unions on contract concessions to help deal with the fiscal crunch also remained stalemated. As discharged workers left their jobs Friday, union leaders went into emergency sessions to reassess their strategies.

Union sources, who asked to remain unidentified, said labor organizations are willing to make perhaps as much as $600 million in concessions in a variety of areas, including pay and benefits, but only if the city stops the layoffs and uses the money to rehire a sizable number of the 10,000 already let go.

The layoffs cut deepest into the ranks of the city’s health, parks and sanitation workers.

The odds of the laid off workers finding jobs in the private sector are not good. The recession has sent the jobless rate in the city shooting up to almost 9%.

“Me! Only me working in my house!” Maria Velez, 48, a dietary aide at Harlem Hospital, said aloud in English and Spanish as she prepared to leave. Then, breaking down in tears, she said, “I want my job.”

Across the street from the hospital, meanwhile, funeral services were being held for a man whom friends and colleagues described as the first real victim of the layoffs. He was Ollie Hartley Jr., 29, a married sanitation worker with two young children, who committed suicide earlier this week by throwing himself off the roof of his 15-story apartment building after receiving his pink slip.

“Everybody’s upset with his death,” said Michael Mehlrose, one of Hartley’s co-workers. “Everybody’s upset with the layoffs. Now you’ve got to hope you don’t get a pink slip.”

Added the Rev. Richard Baker, one of the officiating ministers at the ceremony: “The city didn’t think of his needs. My heart just aches for the family.”

Elsewhere in the city, the layoffs were met with shock and outrage.

“This is worse than the ‘70s,” said Donald Kaplan, spokesman for the Brooklyn Public Library, where 125 of the 725 full-time employees were discharged Friday and another 90 are threatened with dismissal.

The council’s plan, which was presented as an alternative to the mayor’s proposal, calls for $476 million less in property tax increases and restores funding for the Central Park Zoo, some essential health programs, libraries and cultural institutions.

But it also would make $330 million in new cuts on top of the $1.5 billion that Dinkins has proposed. Besides the 4,800 workers who would be laid off under the council plan, another 3,500 would be forced to leave through early retirement.