Dinkins Faces Service Cuts to Big Apple

Article excerpt

RAISING taxes and cutting services are twin taboos for political leaders in election years. New York City Mayor David Dinkins, who hopes to win a second term next fall, is likely to avoid the first pitfall but may yet be caught in the second.

His new $31.4 billion budget for fiscal 1994 beginning July 1 includes a potential revenue gap of $500 million or more. Mayor Dinkins long ago promised New Yorkers he would not raise property taxes and hopes to bridge the shortfall with state and federal aid from his Democratic colleagues - New York Gov. Mario Cuomo and President Clinton.

Yet little of the expected outside help may be forthcoming.

With a Democrat back in the White House, the Dinkins administration assumed that "the {US} Treasury would be open," says Joseph Giacalone, an economist at St. John's University. "I don't think that's yet the reality. The jobs package didn't get through. That means Dinkins has a summer-job problem that's not likely to be resolved by Washington."

Most of the money New York City will get from Washington will be earmarked for specifics such as Head Start and community development.

The New York Legislature, which has not approved any of the new city tax hikes proposed by the mayor, has shown little inclination to offer much other help, including any takeover of the city's unusually high 50 percent share of state Medicaid bills.

If the expected state and federal aid does not come through, Mayor Dinkins says he would cut city-financed day-care efforts and outreach programs for the homeless. A number of other trims, including a slice in city park and playground maintenance costs, are already in the budget.

Both City Council President Andrew Stein, the mayor's leading rival in the September Democratic primary, and former United States Attorney Rudolph Giuliani, the expected major GOP contender in the November election, say Dinkins is a poor financial manager and has failed to make needed tough decisions. Mr. Giuliani, who lost to Dinkins by a very slim margin in the last mayoral election and is again running close in the polls, insists that much of this year's budget gap is due to the mayor's abandonment inJanuary of a long-held negotiating position with city unions.

For two years Dinkins has argued that any salary hikes must follow and be financed by productivity improvements. …