Rescuing New York, and Other Tales

Down Manhattan's Fifth Avenue one morning last week, a group of young choirboys marched on their way to a picnic, hopping gaily and singing Nearer, My God, to Thee. The rest of the city was not so blithe. In the third day of a wildcat sanitation workers' strike, mounds of garbage were rising on the sidewalks, rotting in the July heat. At night, especially in the slums of the South Bronx and Harlem, trash fires flickered and fumed in the streets like smudge pots--and, of course, there were not enough firemen to cope. "Fun City? Fear City?" the head of the firemen's union said histrionically. "This is a burning city--a dying city."

Actually, it was merely old New York--debt-ridden, overextended and underserviced--crippling through another week of crisis in its accustomed position just at the edge of the precipice. All spring, New York City had been staving off bankruptcy, partly through a new arrangement for borrowing, partly by promising drastic layoffs of some of the 338,000 workers on the city payroll (TIME, June 23). Last week, as the new fiscal year began, 19,349 workers had been dismissed, and another 20,000 were scheduled to be fired. More than 5,000 cops turned in their badges and pistols. More than 2,000 firemen were laid off and 26 firehouses closed. Nearly 3,000 of the city's 10,600 sanitation workers were dismissed.

The cuts in such areas as fire, police and sanitation seemed disproportionately high to some, who accused Mayor Abraham Beame of making such inflammatory reductions to increase his leverage with the state in Albany. In fact, firing workers in welfare, health services and some other fields would have saved less money; much of those salaries is paid from federal and state funds.

The Patrolmen's Benevolent Association accepted the layoffs, though with bitterness and threats of work slowdowns. Firemen called in sick in record numbers. The sanitation workers, with the token protest but implicit approval of their union leadership, illegally left their jobs, promising to turn New York into "Stink City" and shouting from picket lines, "Wait 'til the rats come!"

For three days, as the garbage festered, Mayor Abraham Beame quickened his shuttle negotiations with Albany, trying to find a new accommodation for the city. The task was considerably complicated by Beame's being caught in a political crossfire between Democratic Governor Hugh Carey and State Senate Republican Leader Warren Anderson, who tied any increase in state aid and taxing power to increased school aid for his suburban constituency.

Rewarding Strike. At last, Albany and the Big Apple threw together another financial arrangement: Governor Carey and Anderson compromised on an agreement to grant the city $330 million in new taxing powers--money to be raised mainly in the form of levies on bond sales, banks and corporate franchises, a painful step in a city where taxes are already higher per capita than anywhere else in the U.S.

The sanitation men then ended their strike under an extraordinary arrangement that in effect allowed them to buy their jobs back. All of the laid-off sanitation men were reinstated, at least for the time being. In return, the sanitation union advanced $1.6 million to the city to pay their salaries until state money became available. The plan infuriated many policemen and firemen, even though 44% of the dismissed cops and 35% of the laid-off firemen were rehired. At the same time, 18 of the firehouses that had been closed were reopened. The city offered to take back more policemen and firemen if their unions could come up with escrow funds as the sanitation men had. Said City Council President Paul O'Dwyer: "It makes us look like we're rewarding sanitation men for going out on strike."

It was sadly typical that the "solution" amounted to a bleary, last-minute patch-up--an outcome that in fact might have been worked out weeks before. The settlement bought time, but New York still faces serious financial problems that can only be solved by continued austerity--a difficult policy when the large, tough civil service unions can throw the city into chaos any time their swollen contracts are threatened.

Brinkmanship is an old New York political habit. Now, however, the state faces its own huge budget deficit. New York City is taxed to the breaking point. Accounting gimmicks, such as the familiar habit of putting current expense items into the capital budget, which is supposed to cover construction projects, have at last caught up with the city.

New York's problems are a memento mori to other state and local governments. Last week neighboring New Jersey and Pennsylvania were suffering through difficulties that, though less acute than New York's, reflected common themes--an inability to compromise, a breakdown in the eleventh-hour bargaining that used to work when governments, unions and taxpayers came to the brink. On a more fundamental level, the problems suggested that states and cities are more and more coming up against very hard choices: What public services must be dispensed with or cut back if there is simply not the money to pay for them?

In Pennsylvania, more than 50,000 state workers, including prison guards, welfare department employees, transportation workers, hospital orderlies and nurses, went out on strike after reaching an impasse on their demands for a 10% salary increase on top of other automatic raises as high as 5.5%. It was the first statewide public employees' strike in Pennsylvania's history. Finally, they settled for a two-year package giving them a total 12% increase.

Unpopular Idea. Painful money issues also absorbed New Jersey Governor Brendan Byrne who has labored for months to get the state legislature to approve a state income tax that he says is necessary to finance public education. The income tax is a disastrously unpopular idea in New Jersey. The recession has hit the state especially hard--unemployment is 13%. State revenues have fallen off, and Byrne's projected budget for this year contained a deficit estimated at $384 million.

Byrne has started laying off some 4,500 state workers, cutting state aid to public transit and local education and otherwise trimming back. The senate has begun passing a series of nuisance taxes on cigarettes and other items, but is adamantly against the income tax. Says State Senator Alexander Menza of his colleagues: "They think they have a choice between doing what's right and keeping their special license plates. They would rather keep the plates."

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