NEW York City may still be "a wonderful town," as a group of
sailors sang in "On The Town," Leonard Bernstein's 1940s musical
tribute to the Big Apple. But for many of the 16 million or so
tourists who visit here annually and the millions who live and work
here, it is not quite as easy to sing an ode to the largest city in
the United States as was the case a decade or so back.
"On the Town" liked tidy directions: "The Bronx is up and the
Battery's down," cheerfully proclaimed lyricists Betty Comden and
Adolph Green. Today, the most talked-about "directions" in this
teeming metropolis of 7.3 million people are more likely to be
sociological and financial than geographical. What's up includes
immigration, and in recent months, unemployment. That has prompted
friction between the newcomers and the oldtimers. Also up: Taxes.
Crime. Homelessness. AIDS cases. Drug-related problems. What's
down, along with jobs in the manufacturing sector, is public
confidence, say many economists.
Experts disagree on the severity of New York's economic and
social problems. "New York's problems are grossly exaggerated," says
Lewis Altfest, president of L.J. Altfest & Co., an investment
advisory firm. Mr. Altfest says economic problems here are "more
cyclical than secular."
A prominent executive with close links to City Hall insists that
"financial problems here are worse, far worse, than public officials
are telling us."
Just a walk through Manhattan quickly underscores the city's
challenges, from litter, to the ubiquitous potholes marring
traffic-clogged highways, to homelessness.
Political leaders concede that the city's financial woes are bad.
New York City's budget is around $27 billion - twice the size of the
state budget of neighboring New Jersey ($13 billion), which has
roughly the same population. Mayor David Dinkins just announced a
series of layoffs - 556 city employees - to close a $388 million
budget gap for the fiscal year ending in June. The mayor is also
reducing city services and canceling plans to hire thousands of new
Some executives predict that the budget shortfall for the fiscal
year beginning July 1 will exceed the official projection of $1.6
billion. Mr. Dinkins is expected to seek additional taxes and lay
off as many 10,000 public employees. Another 10,000 jobs could be
lost through attrition. Little financial help can be expected from
New York state or Washington, facing budget woes of their own.
Albany just announced the city will lose $100 million in state aid
Still, the layoffs only partially reverse the addition of over
50,000 jobs to the city government's payroll since the early 1980s.
Nor are the city's money woes yet as grim as in 1975, when New York
almost defaulted on its debt obligations. In recent weeks the city
has been courting groups of well-heeled investors from around the
US, hoping to build interest in two large new public debt issues.
Observers worry that if the national economic downturn deepens, the
city would find it hard to meet debt obligations.
New York's feisty public-employee unions seem eager to test the
fiscal resolve of the Dinkins administration, which was elected with
union support. …