Giuliani Willing to Make the Tough Choices for N.Y. : Politics: Despite achievements, mayor’s harsh style is criticized. Budget crisis looms 18 months into first term.

Fielding questions amid taunts and cheers at a town meeting in the Bronx, Mayor Rudolph W. Giuliani set out on a stormy excursion into the competitive, angst-ridden politics of New York’s financial crisis.

Seated behind him in the Adlai Stevenson High School auditorium were 30 city officials--a deliberately massed tableau of municipal concern. The first question set the tone.

“Why is the Administration so bent on hurting the little guy to balance the budget?” one man asked.

“You have to give me a chance to explain,” Giuliani said, fighting to make himself heard.

“When I took over the office of mayor, New York City had lost 400,000 jobs. These jobs mostly came from people who were poor and middle class. . . . What I am trying to do, and what I think we are successful in doing, is stopping that train of jobs out of the city and growing jobs in New York so people have a place to work--so they have a future.”

Some members of the audience began to applaud.

Then, with persistence, Giuliani pressed home his message: Spending must match resources, the school system has to make fundamental changes, taxes on businesses must be lowered.

“[The meeting] could have been less disruptive,” Arthur C. King, a retired New York University Medical Center worker, said afterward. “But you can’t put those kinds of people out. They have a right to be there like anybody else. The mayor, oh, he’s . . . a cool customer. I’ve got to give him that. He’s very in control of himself.”

Eighteen months into office, the city’s first Republican mayor since 1966 has managed some solid achievements:

Crime is down dramatically, three separate police forces have been merged, about 15,000 people have been cut from the municipal payroll. Tough welfare eligibility regulations are being put into place. The school custodians--long a symbol of inefficiency and corruption--have been tamed under a new contract. Some tax cuts have been achieved. Tourism is at an all-time high.

And almost unnoticed, Giuliani has made up with local GOP leaders who shunned him last year when he campaigned fiercely for then-Democratic Gov. Mario M. Cuomo over his party’s standard-bearer, George E. Pataki. Key leaders now back the mayor’s reelection.

Rebuilding Bridges

“I think he has done exceptionally well. . . . He has managed to repair a lot of bridges since the election,” said Staten Island Borough President Guy V. Molinari, who served as Pataki’s city campaign manager and was scathing in his criticism of Giuliani after Pataki gained the governor’s mansion.

“Generally speaking, I think it is fair to say within the Republican ranks in our city [that] the relationship between Giuliani and the Republican activists has been pretty well restored,” Molinari said.

At the same time, the mayor’s confrontational style--compared in the media to a battering ram--has been sharply criticized. Former Mayor Edward I. Koch has likened Giuliani to Torquemada, the grand inquisitor of Spain, who ordered nonbelievers burned at the stake.

“On substance, he’s terrific,” Koch said. “In terms of interpersonal relationships, the mayor is like Frankenstein’s monster. You run at the sight of him.”

But Koch is not running away. He says he will back Giuliani if the mayor seeks a second term.

Giuliani, 51, contends that all the criticism of hardball politics is one-sided. “Negotiating and getting things accomplished is a delicate combination of playing hardball and sometimes throwing change-ups,” the mayor said recently. “You don’t throw fastballs for the entire game. . . . Most of what we’ve accomplished, we’ve accomplished because of the subtleties of negotiation and working with people and finding common ground.”

Giuliani holds office in what is emerging as a turning point in the city’s tradition of helping its poor.

Perhaps more than any other city in America, New York created both a safety net and a ladder of upward social mobility through its schools, its health care system and its housing policies.

Not Self-Sufficient

Now, it is facing its most serious budget crisis in two decades--and all across America, the ideas of big government and the welfare state are under attack.

“Up until the Depression, New York was a self-sufficient city,” said Richard C. Wade, professor of urban history at the City University of New York.

“It built the largest municipal hospital system in the world, the largest educational system in the world. It tunneled under the water, it threw bridges across the rivers . . . and it did it without a penny from Albany and a penny from Washington. Indeed, it had enough money left to send some to each.

“Then came the Depression and New York became a dependent city. . . . Neither New York nor any other city has the resources to provide urban dwellers with the services they expect.

“New York has sustained itself since 1933 with help from Washington and Albany. The demand for services has grown, so has the expectation. That is the heart of the matter. New York is simply the national urban crisis, writ large.”

Unlike the 1970s fiscal crisis, when New York was rescued from the brink of bankruptcy by state and federal action, little sympathy now exists for the plight of the cities.

For the current fiscal year, the Giuliani Administration struggled to close a $3.1-billion gap to bring its $31.5-billion budget into balance. The projected gaps through 1999 total $3.78 billion. By 1999, 19 cents of every local tax dollar will go to service the city’s debt, up from the current 13 1/2 cents.

A Poor Credit Rating

Although it praised the Administration’s “strong track record in restraining expenditure growth, including a significant head count reduction,” Standard & Poor’s earlier this month lowered New York’s long-term credit worthiness from A-minus, where it has stood since 1987, to triple B-plus. This is one of the lowest ratings of any major U.S. city.

Standard & Poor’s cited a soft economy, New York’s consistently high debt levels and criticized the mayor for using one-time measures to close yearly budget gaps when assumptions prove optimistic.

In such an environment, services devoted to the poor are sure to be targeted. Just how sweeping the cuts will be is a matter of contention.

“Nobody knows the social consequences yet,” said Felix G. Rohatyn, the investment banker who was a principal architect of the city’s financial rescue in the ‘70s. “The mayor has been able to put in significant cuts so far without any dramatic change in social tensions or even a significant downturn in the delivery of services. Having said that, it must be recognized that a work-force reduction of 15,000 people has occurred.”

While others argue that the mayor faces a major challenge in creating an atmosphere of fairly shared pain, Giuliani says much of the anxiety is unwarranted.

“The biggest challenge we face is to get people to see that their fears of the budget cuts are very much exaggerated, and when we get through the cuts . . . not only will services remain roughly the same, but things are actually going to improve,” the mayor said in an interview.

“Last year at this time there was the same fear of the budget cuts we made, and the fact is the city is performing today better than a year ago. . . . They are exaggerated for political effect.”

Others dispute that view. “We cut over $3 billion and that doesn’t mean we are not going to have pain,” said City Council Speaker Peter F. Vallone, a potential Democratic opponent to Giuliani in 1997. “The mayor doesn’t see this. We do see it. We do feel it. Right now, the pain is most apparent in the schools, in the classrooms.”

The Board of Education voted last week to increase class size from 25 to 27 pupils in the first through third grades and to shorten hours of instruction. It also set the stage for layoffs. Both moves come when substantial growth in enrollment is expected this fall in the public schools.

In the area of child welfare, state budget cuts have trickled down to the city, which will be forced to reduce spending by $100 million this year and shrink some foster care and preventive services.

“Over time, it will be very devastating,” one former city official predicted. “It’s like 1980-81 when [President Ronald] Reagan came in and went through budget cuts. By 1985, we had the homeless problem and foster care caseload explosion. We will become meaner with more people falling through the cracks.”

Giuliani’s tireless, impatient style is far different from New York’s two previous mayors: David N. Dinkins, the city’s first black mayor, who was elected as a healer, and before him, Koch, who took office during the first budget crisis.

A Prosecutor’s Image

Giuliani lacks much of Koch’s public warmth, the former three-term mayor’s political schtick designed to soothe anxieties and forge bonds with New Yorkers. It is hard to imagine Giuliani walking down streets, Koch-style, asking anyone within view, “How am I doing?” Away from the media glare, even Democratic opponents say Giuliani can be thoughtful, sympathetic and funny. Koch, they say, sometimes could appear self-absorbed.

Critics say Giuliani has not completely made the transition from a high-profile federal prosecutor to a politician who often must deal with shades of gray. Giuliani served as U.S. attorney for the southern district of New York from 1983 to 1988, prosecuting major Mafia families, white-collar Wall Street criminals and corrupt politicians.

“The problem is the prosecutorial bent may be his greatest danger, and it also may be his greatest strength,” said a former adviser.

“He has a unique style of his own,” Molinari said. “It is somewhat similar to my own. He sets his goals and heads straight for those goals and will not give up a battle right to the end.

“Ed Koch believed more in the delegation of authority, although always reminding people who was boss. You had commissioners who were allowed to speak out more forcefully and seized upon the opportunity to do so. Rudy Giuliani is the boss, is the boss, is the boss. . . . Make no mistake about that.”

When Police Commissioner William J. Bratton was getting too much publicity and seemed to overshadow City Hall on the crime issue, Giuliani critics say, the Police Department’s 28-person public relations staff was reassigned. Mayoral aides say the shifts were made for efficiency, and that the police public-relations apparatus had grown over the years to be larger than the White House press office.

“The mayor of New York, unlike the mayor of Los Angeles, has real power,” said Mitchell Moss, director of the Taub Urban Research Center at New York University. “He really is the king of New York. New York is the ultimate seat of the strong mayoral system.”

Giuliani’s Mandate

After his defeat by Dinkins in 1989, Giuliani said he thought long and hard about why he still wanted to be mayor.

“I got elected, I believe, to do certain things,” he said. “I got elected to bring crime down. I got elected to make the city not only be safer, but feel safer. I got elected to stem the flow of private-sector jobs. I got elected to take a school system that was spiraling out of control and to try to put it back in control so it could do its job effectively. I believe I got elected in order to restore hope to people in the city.”

Soon after taking office, the mayor set about trying to remove Chancellor Ramon C. Cortines as head of the nation’s largest school system. Giuliani was convinced Cortines was a poor manager who could not exercise tough leadership because of his desire to be liked. The mayor charged that Cortines protected bureaucrats at the expense of children and resisted badly needed budget cuts.

Giuliani argued that since the city gives the Board of Education about $8 billion a year, it should have a greater measure of control.

Giuliani’s attacks on the popular chancellor were personal and unrelenting. During just one day, he accused Cortines of “whining, which he does all the time” and “playing the little victim.”

Last month, the chancellor resigned.

The battle over Cortines’ successor is just beginning. The independent school board has sent strong signals that it wants an educator like the former chancellor, who was committed to teaching, but one with a thicker skin who can stand up to City Hall. Giuliani is pressing for a reformer or skilled administrator.

The fights over the next chancellor and over just who should take credit for the city’s steep decline in crime already have become issues for the next mayoral election.

This month, the mayor and Bratton announced that reported murders in New York for the first six months of the year plummeted by 31% to the lowest level in 25 years. Robberies declined by 22%. Other crimes rates dropped as well.

Democrats argue that Giuliani should share credit because of a massive expansion of the police force under Dinkins. “I think the public knows by now who produced those cops,” Dinkins said.

Members of the Giuliani Administration retort the declines would have been minuscule under Dinkins and that innovative police strategies, including fine-tuning the department so that responses can be better tailored to neighborhoods and type of crime, are responsible.

The issue of crime control is expected to be central to Giuliani’s reelection campaign, so the debate isn’t academic.

In Giuliani, New York has a mayor who is a tough lawyer--a conscientious, impatient micro-manager who looks to the future. He has quietly courted the boroughs beyond Manhattan and is working hard to expand his base in the Latino community, crucial to his defeat of Dinkins.

“You set the goals you want to reach and do the best you can to move toward them,” the mayor said. “You don’t divert from them because there is a public opinion poll that says something or five politicians who yell at you or there is a demonstration. I think that has been the thing that has been wrong with American political leadership for 20 years.”

So what makes Giuliani run?

“The greater the tasks, the greater the challenges, the more he seems to accept the challenges,” Molinari said. “He wants to prove to himself as well as to others that he can do things other people can’t do. He seems to be succeeding in that effort. . . . One thing you don’t want to do is underestimate the man.”