Comptroller Edward V. Regan of New York State yesterday lashed out at Mayor David N. Dinkin's proposed four-year financial plan, calling it inadequate and saying New York City could be "headed toward a rudderless situation."

In a report and in a speech, Mr. Regan warned that the city faces even wider budget gaps than the financial plan has forecast and that the plan omits serious cost and spending projections.

And while not calling for a complete takeover of the city's finances by a state-created panel, Mr. Regan said the New York State Financial Control Board has to assume a new role. He said it has "to step up to the plate" to pass a resolution requiring Mayor Dinkins to produce a four-year structurally balanced plan and "produce it within a certain timetable and meet certain goals." At the moment, there is no such board requirement.

Mr. Regan spoke at a breakfast meeting sponsored by Crain's New York Business and the New York City Chamber of Commerce where he released a report from his office reviewing the mayor's recently proposed, preliminary financial plan. The state comptroller is the second major fiscal monitor to release a review of the mayor's plan.

The Comptroller's Report

Last month, city Comptroller Elizabeth Holtzman released a report saying the financial plan was shaky and flawed. And the Financial Control Board is expected to release its review of the plan in the next two weeks. The board is also scheduled to meet on Dec. 13.

The state comptroller's report, prepared by the state deputy comptroller for the City of New York, Elinor B. Bachrach, said the mayor's plan for fiscal years 1993 through 1996 does not provide reasonable assurances of achieving the goal of structural balance.

The financial plan's gap-closing measures are "problematic in many respects, inadequate in others, and offers no assurances that [they] will generate resources even approaching the amounts sought by the city," the report says.

The city plan, presented last month, projects a balanced budget for fiscal 1992, which ends June 31, and then forecasts budget gaps of $1.2 billion in fiscal 1993, $1.81 billion in fiscal 1994, $1.92 billion in fiscal 1995, and $2.13 billion in fiscal 1996. It also includes $1 billion in revenues from a refunding of outstanding Municipal Assistance Corporation for the City of New York revenue bonds, $2 billion in state aid, $1 billion in tax increases, and $3 billion gained through city actions, mainly through work-force reductions.

Ms. Bachrach said at the breakfast meeting that the city's financial plan "is very backloaded," with small cuts in the early years and the "hard stuff" in the last two years. She also noted that there were "significant underestimates" in the financial plan.

Ms. BAchrach said the four-year financial plan is "vague" and "not convincing."

The absence of some figures is the result of "out and out omissions," she said, noting that the state comptroller's office generally has had "great respect" for city estimates. The omissions are "a matter of some concern," she said, noting that the city did not include debt service costs for the MAC money in the plan and the impact of inflation in the later years of the plan.

As a result, the budget gap for fiscal 1996 could be $1.5 billion higher than the city projects, or $3.59 billion, she noted.

The state comptroller's report also prognosticates wider budget gaps in the four-year plan than the Dinkin's administration has projected. The report projects a $306 million gap in fiscal 1992, due to estimates of lower state aid, taxes, and higher labor and social costs. That gap could widen by an additional $108 million because the state's fiscal 1992 deficit reduction plan could pare state aid to the city.

The report projects a $1.71 billion city budget gap in fiscal 1993, a $2.47 billion gap in fiscal 1994, a $2.87 billion gap in fiscal 1995, and a $3.59 billion gap in fiscal 1995.

To keep the city from "drifting" and driving business out with higher taxes, Mr. Regan said he wants to pressure the Dinkin's administration through the private sector and the public sector.

Mr. Regan also called on business leaders in the city to join together to support a financial plan containing no new taxes and at the same time maintain quality services. To achieve this, he said, the business leaders and taxpayer groups should seek support from the larger and more powerful 51-member city council, especially its newer members from the outer boroughs.

A More Active Board?

Calling for a more active Financial Control Board may create a delicate political situation, since May or Dinkins and Mr. Regan are two of its seven members. And the idea is not new. Mr. Regan had proposed such a resolution to the board this past summer, but it was tabled as quickly as it was raised by Gov. Mario M. Cuomo, chairman of the control board.

The board was created to oversee the city's finances during its fiscal crisis in the mid-1970s and has been dormant since June 1986, but can be reactivated under certain conditions, such as the city having a $100 million deficit in its budget at the end of its fiscal year.

"I have not had an opportunity to speak to my staff about what he has on his mind." said Allen J. Proctor, executive director of the control board. "When he submits the resolution to me I'll put it on the agenda."

Leland Jones, chief spokesman for Mayor Dinkins, said, "A resolution is an empty parliamentary exercise, since the mayor has already resolved publicly to present a structurally balanced multiyear plan in January."

As for the omissions, Mr. Jones said, "The November plan was an outline of a plan, not the final plan."

To achieve structural balance in the final plan, Mr. Regan said May or Dinkins should include "not just the kind of mindless layoff stuff, or the temporary shrinking of government, but meeting it through privatization, meeting it through real pressure on albany."

In the state capital, Gov. Cuomo and lawmakers are now preoccupied with trying to solve the state's budget crisis, Mr. Regan said, adding that "they are not going to help." For the city, "the state is a soup kitchen without the soup," he said. The state faces a $875 million budget gap in fiscal 1992, which ends March 31, and a $3.4 billion gap in fiscal 1993.

Mr. Regan also expressed concern about whether Mayor Dinkins's leadership will be effective in the two years left in his term, which he assumed in January 1990. Since then, a barrage of fiscal woes, management blunders and misteps, controversial labor contracts, and a host of social ills have rocked his administration and eroded some of his political support.

"The mayor has two years to go, and for whatever reason, jstified or unjustified, he is being called a lame duck and I think this has created a very serious sense as I talk to people in this town that maybe we're headed toward a rudderless situation," Mr. Regan said. "Those are not nice words, but they are accurate."

Speaking for Mayor Dinkins, a Democrat, Mr. Jones said Mr. Regan, a Republican, is playing partisan politics and should focus instead on "persuading the White House to do something about jump-starting the economy."

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