Cuomo Plan for New York City's Budget Woes Receives Praise

The $7 billion package addresses transportation, Medicaid, and municipal services

NEW York Gov. Mario Cuomo (D) is getting high marks here both for the ambitious scope of his new proposals to revitalize New York City and for the message they send of his commitment to the city's economic future.His package includes a number of public-works projects aimed at producing jobs and streamlining transportation in and out of the city by everything from high-speed ferries to light-rail links between local airports. The total cost has been pegged at more than $7 billion, most of which would have to come from the private sector. Many New Yorkers question whether any of the projects will really get off the ground. "The most important thing the proposals do is boost confidence in the city," says Ronald Shelp, president of the New York City Partnership, a group of about 200 business and civic leaders. "People have been saying that there's no hope.... It's much better if they're arguing about whether this or that project will work," he says. One key proposal, long sought by city officials, would gradually shift the local share of Medicaid costs to the state in exchange for some portion of city and county tax revenue. New York is one of only a handful of states that require cities to pay part of the nonfederal share of the Medicaid bill. The tab for the Big Apple is now $1.8 billion a year. Several of Governor Cuomo's proposals would eliminate duplication in city and state services and revamp laws that limit productivity. New York University economist Richard Netzer considers these one of the strongest parts of Cuomo's program. "There's been a lot of detailed work done to think things through," he says. "This is not just grandstanding." These are days when cities are getting little help from either Washington or their state capitals. New York State itself struggled to make cuts last summer to close an estimated $6 billion budget deficit. Just last week the state's chief judge sued the state, charging that state funding is insufficient to operate the court system.

Big cities vs. suburbs Few of the new Cuomo proposals include state money. Yet many require legislative approval that may be hard to come by. The proportion of legislators from the suburbs is growing in New York as elsewhere and, with it, resistance to anything that might smack of an urban bailout. Local-state fiscal tensions seem to be heightening rather than easing nationally, says Henry Coleman, who directs fiscal research at the Advisory Committee on Intergovernmental Relations. Also, in New York's case, Cuomo, a Democrat, must get his plan through a Republican-controlled Senate. "None of the proposals are dead on arrival," insists Bill Stevens, a spokesman for New York Senate majority leader Ralph Marino. "Some are attractive - but you can't just hop on the bandwagon and say 'Yes, we're going to do this' until you see a few more details." Of concern to Senate Republicans, Mr. Stevens says, is assurance that any state takeover of local Medicaid costs include a restructuring. The shift "can't become a Trojan horse that diverts attention away from the need to control costs," he adds.

Short-term aid Much now depends on how speedily New York City gets its own house in order. The Municipal Assistance Corporation (MAC), the organization set up to borrow money for the city during its 1975 fiscal crisis, may make available $1 billion in transitional aid. However, MAC chairman Felix Rohatyn says the help is contingent on the city's development by early October of a realistic, long-range plan to further cut spending. New York Mayor David Dinkins, who calls the Cuomo plan "a giant step forward," has been experimenting with everything from one-man police patrol cars to outside contracting for city services. But he has not cut nearly as many jobs from the city payroll as business leaders here say he must, and his efforts to gain concessions from labor so far have had little success.

The governor's motives "I think the city is still preoccupied for some reason with labor givebacks in the area of fringe benefits," says Dr. Raymond Horton, president of the Citizens Budget Commission. "The real focus ought to be on getting labor and management to go through the major productivity-related work rules which would let you actually reduce the work force without necessarily diminishing public services." In the meantime, no one here has the definitive answer as to why Cuomo, who has long kept his distance on city problems, made his move to help the city when he did. Business leaders say their lobbying efforts finally got to him. Others say he was feeling the political heat. "A guy like Cuomo, who depends on city votes to win, has a special obligation to help his state's major city," says Larry Sabato, a professor of government at the University of Virginia. Whatever the reasons, Cuomo's willingness to put himself on the line on the city's behalf should do a lot in itself to help the program succeed. "Once he takes a stand on things, he tends to be tenacious," notes New York University's Richard Netzer.