In its strongest rebuke of Mayor David N. Dinkin's handling of New York City's fiscal crisis, the city council yesterday presented an alternative fiscal 1992 budget that turns the mayor's planned budget on its head.
The city council version restores $220 million in spending to some programs, cuts $330 million from others, and supports less than half of the administrator's proposed property tax increases.
A city budget is legally due on June 30, the end of the city's fiscal year, and city council Speaker Peter F. Vallone warned that if the mayor does not begin serious negotiations with the council on the budget, the 35-member chamber will pass its own version.
The mayor's office has been leaking pieces of the council's budget in recent weeks, causing problems for the council, members of the council have said. Mr. Vallone said the council's budget, "should be taken very seriously as the budget of New York City for the next fiscal year."
If the council passes its own budget, it would add more confusion to another bitter and troublesome budget feud that has been brewing between the mayor and the council since the mayor first proposed his budget in January.
To deal with a budget passed by the council, the mayor is empowered to veto spending increases if revenues do not support the programs cannot, however, veto the entire budget or spending cuts.
A spokesman for Mayor Dinkins said the mayor has received the council's budget and is reviewing it. He was expected to comment on it yesterday evening, the spokesman added.
The council did not include $150 million in operating revenues for fiscal 1992 from the Municipal Assistance Corp. for New York City and labor concessions totaling about $300 million. The council said these items must be brought to the table by the mayor.
Rating agencies have expressed deep concerns about the city council's previous forays into designing a budget. The one-shot revenue gainers that were included in an alternative financial plan the council presented in March drew sharp criticism from Standard & Poor's Corp. The agency, which rates the city's GO bonds A-minus and has placed them on negative outlook, says these revenue measures could jeopardize the city's GO bonds rating.
Officials from Moody's Investors Service could not be reached for comment. Moody's rates the city's GO bonds Baa1.
The speaker has decried the proposed tax property increases, saying yesterday, "The council is not alone in its opinion that the level of property taxes sought by the mayor would decimate the economy."
The council proposes a $28.2 billion budget, about $500 million less than the mayor proposed in May when he presented his executive budget. The mayor called for about $1 billion in increased taxes and $1.5 billion in spending reductions. The city council seeks about $300 million more in spending cuts.
Within his executive budget, Mayor Dinkins has proposed a property tax increase to generate $776 million in fiscal 1992, while the council only supports $300 million in property tax increases.
The council also proposed to slash the city's work force by an additional 8,400 on top of the 10,000 city workers already given pink slips by the administration.
The council's spending cuts were modified overnight from the original $465 million proposed last week because the city's Office of Management and Budget said that a number of the reductions would eliminate revenue generating programs and positions and cost the city an additional $360 million.
The council's draft budget, however, include increasing the city's personal income tax rate to 4.46% from 3.91%, to raise $445 million in fiscal 1992. And the council's proposed budget, like the mayor's, calls for $228 million of mandate relief from the state and $90 million in restored state aid. All three measures, however, require the approval of lawmakers in Albany, who have been slow to act on the city's request or who have balked at supporting the personal income tax increase.
"While the administration may complain about our choices, it is better to cut lawyers and middle-managers than school health programs and library branches," Mr. Vallone said in a statement.
The city council's plan also calls for reducing the size of the general reserve to $100 million, its legally stipulated level, from the mayor's proposed $150 million level in fiscal 1992. And the council plan also says the city will have a $50 million surplus in fiscal 1991, created by a number of steps taken in the last few months to prevent a budget gap. The surplus will be rolled into fiscal 1992, according to the council plan.
Of the $220 million in spending the council restored, about $26 million went to the city's Health and Hospitals Corp. and $16 million to the city's Department of Health.
The proposed spending cuts in the plan would be targeted to the city's administrative staffs of executive agencies.
And a proposed early retirement program would save the city about $120 million and reduce the workforce. The program would keep half the jobs slots empty and fill the other half with lowered paid employees.
