Boston -- nearly broke and wondering what to do next

Boston is slowly grinding to a halt. Its schools still hover on the edge of closure. Its police and fire departments have already taken severe cuts as the local financial crisis deepens. And a city which in the last two decades has gained a reputation as one of America's most livable urban areas may find itself facing bankruptcy.

Boston is not alone in its plight. New York is slowly crawling out of fiscal collapse. And the list of cities calling in the financial consultants is a roll call of the nation's older Northern industrial centers: Cleveland; Detroit; Philadelphia; Newark, N.J.; and Providence, R.I.

But here, with the zeal of latter-day minutemen, a disgusted public is taking to the streets against the city's elected officials:

* In recent weeks, traffic in the harbor tunnels has been snarled by East Bostonians protesting police cuts -- a protest now spreading to other already-jammed commuter routes.

* Several neighborhood police stations, padlocked after recent cutbacks, have been occupied by local residents carrying sleeping bags, hot plates, and fierce determination. The police, low in morale and sympathizing with the protesters, stand quietly aside.

* The long, agonizing drama of the nations's oldest public school system -- now out of money and struggling to stay open for the balance of the year -- has landed in court.

Superior Court Judge Thomas R. Morse, after exhaustive attempts to coax a compromise on school funding from Mayor Kevin H. White and his foes on the Boston City Council, ordered the schools April 28 to remain open for the full 180 days required by state law. But the White administration immediately appealed the order to the state Supreme Judicial Court (SJC), noting that funding the already overspent schools could bankrupt the city.

"If our school system fails, as far as I'm concerned the city is down the tubes," City Councillor John W. Sears told the Monitor. "We don't have a great climate and we don't have natural resources," he explained. "All we have going for us are some institutions and a history and a pool of bright workers. For us to let our schools sag is terminal."

But so far, there has been little agreement on a formula for a bond issue that could bail the city out of the current crisis. There is even less agreement on structural changes that could prevent similar school department overspending next year. And behind it all is a growing feeling, both among the general public and in political circles, that the man once called the "Mayor of America" has lost control.

"Hey, Kevin, you stink," shouted a cabdriver passing the mayor April 28 -- while his passenger, a businessman friend of the mayor's, tried to slough out of sight. Even in the often-supportive financial coomunity the reaction has been increasingly one of frustration. "It's very discouraging," says Jack Delany, who represents the First National Bank of Boston in the school negotiations. He does not rule out the possibility of the city going into receivership by June 30 unless the local politicians can reach agreement.

Mayor White faces what could be the turning point in his 13 years as chief executive. If the SCJ finds in his favor -- by overturning Judge Morse's ruling that the constitution requires the schools to remain open -- he will be vindicated in blaming the Boston School Committee and the City Council for the budgetary problems. The school department, which officially overran its $210 million budget April 28, is expected to need another $30 million to keep schools open into June. The City Council, which has had several cracks at shaping a bill authorizing a bond issue, has itself been split by dissension.

But if the SJC upholds the order, the mayor will be forced into even deeper staff cuts -- and into agreement with whatever conditions the lenders choose to impose. Some of these cuts, his critics hope, will fall on appointees who make up a political machine often compared to that of the late Mayor Richard J. Daley's in Chicago. But others may have to fall on services not required by the state constitution, such as libraries, parks and recreation, services for veterans and the elderly, and the Boston Redevelopment Authority -- unless, as some suspect, the city has funds squirreled away that have not yet come to light.

The state legislature has also become involved. A bill to reimburse the city the legislators, both in and out of the Boston delegation, have little patience with the state's largest city and even less with its mayor. So the bill that emerges may include some amendments of its own -- such as a provision that the funds be used only to fund school expenses. The mayor has said he would prefer to use $3 million of that amount to rehire police and firemen.