At a meeting of the New York State Financial Control Board on Friday, state Comptroller Edward V. Regan said he would not introduce his much publicized resolution to force New York City to persent a structurally balanced financial plan that included a time-table and goals.
The decision to drop the resolution was made moments before the seven-member panel, which includes Mr. Regan, held a public meeting to discuss the city's fiscal 1992 budget and proposals to create a structurally sound financial plan for fiscal 1993-96.
On Dec. 5, in an attack on the Dinkins administration's handling of the city's fiscal crisis, Mr. Regan said he would present the resolution to the board for a vote.
The last time he tried such a move was in July. None of the board's other members, including its chairman, Gov. Mario M. Cuomo, seconded the motion. Gov. Cuomo and Mayor David N. Dinkins, also a board member, have said they would fight a takeover of the city's finances by the board.
The control board was created during the city's fiscal crisis of the mid-1970s to oversee the city's finances. It consists of four public-sector members and three representatives of the private sector. Since Since June of 1986, the board has been dormant, serving only as a monitor of city budget plans.
After meeting privately with the full board just minutes before the public meeting on Friday, Mr. Regan said it was decided Mayor Dinkins should proceed with developing budget plans without the pressure of the resolution.
After the meeting, when asked if he had been pressured to drop the controversial resolution, Mr. Regan said, "There was a little bit" of pressure from the three private-sector members of the board, who told him they would continue to work with the mayor in private meetings.
The private-sector members are: Heather L. Ruth, president of the Public Securities Association; Robert R. Kiley, president of the Fischbach Corp. and former chairman of the state's Metropolitan Transportation Authority; and Stanley S. Shuman, executive vice president of Allen & Co.
The private-sector members -- who rarely discuss control board matters in public -- have been holding monthly meetings with Mayor Dinkins since July. They have been doing this since they proposed, and the board adopted, a plan that directs the control board to hold regular public board meetings to review the city's gap closing plan. Since the July meeting, the board has held three meetings, including the one on Friday.
Mr. Regan said during the meeting that he decided to drop the resolution "out of respect for the Mayor," and because he a had been assured by the Dinkins administration that it would work on balanced budgets.
Meanwhile, Allen J. Proctor, the control board's executive director, presented the board's memorandum reviewing the city's budget for fiscal 1992, which ends June 30.
Mr. Proctor was the third fiscal monitor to comment on the city's fiscal 1992 plan. In the last two weeks, Mr. Regan projected a $306 million gap, and the city's comptroller, Elizabeth Holtzman, also a member of the control board, projected a gap as high as $367 million. On Nov. 6, the Dinkins administration projected a $210 million budget gap for fiscal 1992 and presented a plan with $210 million of gap-closing actions.
At Friday's meeting, Ms. Holtzman said that while the monitors appear to agree on the scope of the problem, they arrive at it in different ways. Ms. Holtzman says, for example, that her estimates forecast lower revenues, while the state comptroller projects higher spending. If they were to combine their respective revenue and spending figures, the city could face a $460 million gap for fiscal 1992, she said.
After reviewing Mayor Dinkins's modified financial plan for fiscal 1992, the control board said in a memorandum, "Although we find that the city has generated reasonable projections for fiscal 1992, there are still significant risks which must be addressed in the January modification."
The memo says that in fiscal 1992 the city's revenues may be $40 million lower than planned, expenditures may exceed projections by $193 million, and state aid may be $100 million less than planned -- creating the risk of a $333 million budget gap for the remainder of the fiscal year.
On Jan. 16, Mayor Dinkins is expected to unveil a revised financial plan for fiscal 1992 as well as one for his hour-year financial plan covering fiscal years 1993 through 1996. The control board is expected to meet in February or March, and Mr. Regan said that if the plans are not sound, he could again present his resolution.