Giuliani Offers Financial Plan to Deal With Deficit, Attacks

Vowing that New York will not form a “tin cup brigade” to beg the federal government for bailout money, Mayor Rudolph W. Giuliani on Tuesday outlined emergency steps to plug a $1.6-billion deficit through next year and help the city recover from the World Trade Center attacks.

In remarks aimed at the mayoral candidates dueling to succeed him, the mayor added that it would be “dumb, stupid, idiotic and moronic” for the city to even think about raising taxes to cope with the fiscal crisis.

Giuliani announced a sweeping, 15% cutback for each city department through the end of June, except for police, fire and education, which will absorb a 2.5% cutback. He said that would free $1 billion, and indicated state funding could help New York erase the remaining $600-million gap.

But even as he was touting New York’s fiscal self-reliance, Giuliani joined Gov. George Pataki to request $54 billion in federal aid as part of President Bush’s economic stimulus package. They said the health of the national economy depends on the swift rebuilding of lower Manhattan.

“People who bet against New York have always lost,” Pataki said at a news conference. He outlined requests for $34 billion to reconstruct the World Trade Center area and $20 billion to help New York’s economy cope with plunging revenues and the loss of 100,000 jobs.

The twin fiscal messages were designed to reassure a jittery financial community, which was rocked by City Comptroller Alan Hevesi’s report last week that the city’s economy might take a $100-billion hit in the aftermath of the Sept. 11 attacks. There have also been projections that New York’s municipal budget could face a $4- billion to $5-billion deficit during the next two fiscal years, given a staggering loss in municipal tax revenues.

Giuliani, in remarks delivered to city agency heads, pledged to hold the line on municipal spending and avoid layoffs through June, when the fiscal year ends. The city has a $545-million surplus, which the mayor said should be preserved as a rainy day fund.

“Everybody needs to do their part to solve our current problem, but nobody should overreact to it,” the mayor said. “We’ve still got the most responsible municipal budget in the country. We’ll be stronger than ever.”

Giuliani’s long-term recommendations, however, may be disregarded by some of the candidates seeking to succeed him in the Nov. 6 election. Thursday, two Democratic contenders--Public Advocate Mark Green and Bronx Borough President Fernando Ferrer--will face each other in a runoff. The winner will be a heavy favorite over the GOP candidate, media mogul Michael Bloomberg, given the Democrats’ nearly 5-to-1 voter registration edge.

As the race comes down to the final hours, Green and Ferrer have offered contrasting visions of how the city should recover from the attacks. Ferrer, who is leading narrowly in some polls and is seeking to become New York’s first Latino mayor, has floated the idea of raising taxes for school programs. He also endorsed a plan that would spread a newly rebuilt financial center citywide, instead of just in lower Manhattan.

Green, who says taxes should be raised only as a last resort, believes the financial center needs to be rebuilt in the same location. Neither candidate has offered a long-term plan to remedy the projected $4-billion municipal deficit, which would set in after Giuliani leaves office.