If New York City met its budget deadline last night, it was only after a weekend of tense negotiation and last-minute compromise.
And if there is a budget for fiscal 1992 -- whether the city council's version or a package assembled jointly with Mayor David N. Dinkins -- there are some who predict it will unravel almost immediately.
More ominous still, the Financial Control Board, the state-created monitor of the city's fiscal affairs, has called a meeting for its seven members for tomorrow morning. If the city has a $100 million budget deficit on Sunday -- at the end of its fiscal year -- or cannot enter the market, or make debt service payments, the control board would step in and run the city's finances.
A state takeover would be politically devastating both for Mayor Dinkins, the city's first black mayor, and Gov. Mario M. Cuomo, who has said he does not want to see a control period. During the last six months, the two men -- both members of the board -- have been at odds with each other over the level of state aid to the city.
The board usually meets in mid-July or later and usually adopts a resolution that says the conditions that would trigger a takeover are not present and therefore the board would remain idle.
A spokesman for the control board said, "It was scheduled that way because the members felt it was important to have an early meeting, given the uncertainties on the state level and the city level, and to hear the status of the deliberations."
But the control board's actual course of action still depends on what happens in the hallways of City Hall and Gracie Mansion on Saturday, Sunday, and today.
On Thursday, Speaker Peter J. Vallone of the city council offered his alternative budget, which restores $220 million in spending to some programs, cuts $330 million from others, and supports less than half of the administration's proposed property tax increases.
Mayor Dinkins, speaking just after Mr. Vallone's presentation, took a conciliatory tack.
"What balances a budget on paper, of course, does not always balance it in practice," he told reporters. "But as with every one of the budget proposals the council has made in recent weeks, we will give this latest proposal a thoughtful and thorough review."
With time running out, he said, "I am ready to negotiate all day, every day until a balanced budget is achieved. What we lack in time, we can achieve in willpower."
Surveying the situation, one city official said in Friday: "The lines have been drawn, but there is room for negotiation and compromise so that each side can say they won."
A budget, he predicted, would be in place either Sunday night or this morning. "Mr. Vallone wants to have his imprint on this budget, but it makes sense for him to play for compromise, as its does for the mayor to do so as well," the official said. "If there is a control period, Mr. Vallone becomes a nonentity."
The speaker, he said, "has to walk a fine line and not rub the mayor's nose in" the budget disagreement.
Hyman C. Grossman, a managing director with Standard & Poor's Corp., "If the council passes its own version of the budget without cooperation with the mayor, then you will have a lot of confusion out there in terms of services and whether the mayor will veto anything. We have to wait until the dust settles."
If there is no budget in place, "then the operating budget is in trouble," Mr. Grossman said. This is so because spending and revenue collection levels set in fiscal 1991 would carry into fiscal 1992.
Debt service payments, however, should not be in danger, he noted. Debt service costs are expected to increase by $800 million in fiscal 1992, Mr. Grossman said, adding that the city plans to escrow about $900 million in property tax revenues collected in July to make payments for that period.
In addition, lawmakers in Albany have yet to budge on the city's request for almost $700 million. On Friday, Mayor Dinkins once again reiterated the importance of quick approval by the state.
"We also are paying close attention to events in Albany," Mayor Dinkins said, "where any out-of-balance problem would only be compounded if the Legislature does not enact and the governor does not approve the full tax, restoration, and mandate-relief package that the speaker and I support."
And the proposal to allow the city to deficit finance its way out of its budget morass has once again been quietly raised in Albany circles.
Municipal market participants expressed concern about the city's budget plight, but did not sound any alarms. And despite the barrage of woeful fiscal news, the prices on long-term tax-exempt city bonds have remained stable.
Mark Tenenhaus, a vice president with Dean Witter, said "If there is any substance to it at all, it is a recognition of two things: the first thing being that the city's problems do not lend themselves to a quick solution, and the other thing being that politically they have to walk a fine line and figure a mechanism to avoid bringing the Financial Control Board and not losing face politically."
Michael Shamosh, vice president and analyst with Cowen & Co., said, "Basically, from my point of view, nobody seems to care. They see the short-term budget problems somewhat removed from the long-term credit quality of the city's bonds."
If there is no budget in place on Monday, the municipal market would "do little or nothing," he said.
And a control period would not bother him either. "I don't see the Financial Control Board as a horrible thing. The city's longer-term problems would be addressed by the Financial Control Board in a less passionate manner," he said.
Nevertheless, there are some observers who say the city's budget will not hold water as the fiscal year progresses.
"If there is a budget on July 1 it will be a bogus budget that will start coming apart on July 2," said Raymond Horton, president of the Citizens Budget Commission, a nonprofit fiscal watchdog. He characterized as "unmanageable" the budgets that have been presented to date. "It is too much to do in one bite," he said.
As for assistance from the state, Mr. Horton said, "The city is the tail and the state is the dog, and the state leaders do not want the city -- the tail -- wagging the dog.
"They are not going to let the city's needs dictate the final outcome of the three-ring circus in Albany," Mr. Horton added.