Mayor, Council Come to Terms on Frugal N.Y. Budget

After weeks of sharp bickering, officials agreed on a bleak $29-billion budget Sunday that will reduce services and downgrade the quality of life in New York City.

The agreement between Mayor David N. Dinkins and the City Council, which flexed fiscal muscles after it received new city charter powers, came just hours before the deadline for the start of the new fiscal year.

The budget contains pain for 10,000 city workers who will be laid off. Property owners will pay $400 million in new taxes, New Yorkers will pay $335 million more in income taxes and city agencies will be forced to sharply slash programs.

Nevertheless, the mayor and members of the council agreed it could have been worse. At least $117 million in Draconian cuts--including shutting the Central Park Zoo, some libraries and some health clinics--will not take place.

And continuing negotiations with municipal labor unions could result in some of the jobs and programs earmarked for elimination being saved.

“We are happy to report the world has turned right side up. The city has a budget,” said Dinkins at the completion of marathon negotiations with the council.

But the mayor acknowledged that the new budget contained “a lot more pain and a lot less gain than any of us like.”

Not since the fiscal crisis of the 1970s have city services suffered such deep cuts.

On Friday, Dinkins laid off 6,300 municipal workers, including parks department employees, library workers, hospital nurses, urban planners and sanitation workers. Many faced bleak prospects for re-employment in New York’s difficult economic climate unless municipal unions make concessions to save their jobs.

Labor leaders must decide whether to surrender salary increases and benefits won earlier in the year to prevent almost 4,000 further layoffs and bring back significant numbers of their union members who were fired.

Faced with a recession in New York City, Dinkins presented a $28.7-billion city budget in May, containing more than 20,000 layoffs, deep service cuts and large tax increases.

His proposal to sharply raise property taxes set off a seven-week fight with the City Council, whose approval was needed for any property-tax increase. In the end, Dinkins settled for about half the property-tax raise he wanted.

Bargaining went on through the weekend at City Hall as lobbyists for municipal agencies and community groups pressed the mayor and council members to restore programs. At one point in the closing days of the process, council members made public their own budget, restoring $476 million in property taxes the mayor proposed and putting back programs he had slashed.

The mayor said he anticipated his Administration would be able to win concessions from municipal labor unions.

“I am confident,” Dinkins predicted, “the effort will yield still further revenues so we can save some layoffs.”

Veteran City Hall observers said the mayor staved off political disaster. By reaching agreement with the council, he avoided the possibility of New York City’s finances being dictated by a state financial control board. City Council members perhaps won a greater political victory, placing themselves on the side of lower property taxes for homeowners in their districts and fewer service cuts than the mayor proposed.