Mayor Giuliani Tries to Pare The Big Apple Down to Size

NEW YORK Mayor Rudolph Giuliani made his reputation as a federal prosecutor cutting gangsters and Wall Street crooks down to size.

Now, he's trying to do the same thing to the Big Apple's municipal government and services.

So far, the city work force has shrunk by 9,000 workers. By the end of the fiscal year, the city could shed up to 20,000 workers.

At the same time, the mayor is convincing many of those left with jobs to put in a full day's labor for their paychecks. And, some workers may soon find they will have to compete with private contractors if they want to keep their jobs.

``I think the mayor has changed the nature of the debate - we no longer have a misunderstanding that the City of New York will be a smaller governmental institution at the end of this year and at the end of the mayor's term than it is now,'' says Alan Hevesi, the city controller.

The city bureaucracy is shrinking in large measure because of Mr. Giuliani's need to bridge a $2.4 billion budget gap in the current fiscal year, ending June 30, 1995.

Most analysts blame declining city revenue on Wall Street's lower profits. Mr. Hevesi says ``there is the potential'' that in January the mayor will have to squeeze another $300 million out of the budget.

New York City's budget woes may actually get worse before they get better. The city had been counting on getting an annual state contribution of $200 million in the next fiscal year for extra Medicaid expenses incurred by the Big Apple. Gov. Mario Cuomo had promised the state would pick up the tab, which could eventually come to $2.3 billion per year. This was one of the factors that prompted Republican Giuliani to cross party lines and endorse Mr. Cuomo, a Democrat, in the recent gubernatorial election.

But Cuomo lost, and Gov.-elect George Pataki has yet to make a decision on the issue.

Giuliani says that since he followed his conscience, he has no remorse over his political moves. On Monday, he told reporters he had anticipated the personal and political risks ``and I am perfectly willing to bear them and deal with them.''

Businesses benefit

So far, the mayor's endorsement has not hurt him politically in the city. At a lunch on Monday, the Broadway Association Inc., a business group, gave Giuliani a standing ovation.

That business is happy with Giuliani is not surprising. Other mayors have considered the business sector fair game for new taxes to help balance budgets. Giuliani, however, has lowered the commercial-rent tax and the hotel-occupancy tax. The result has been beneficial to the business community. The hotel occupancy rate this year has been 71 percent, compared with 65 percent last year.

At the same time, the mayor has negotiated with the city's unions to get real productivity gains. The city recently convinced the sanitation workers to increase their routes by 20 percent and to agree to a penalty if service declines. At the same time, the new agreement gives the city the option of privatizing the business in the future.

Richard Schwartz, Giuliani's senior adviser, calls the administration's relationship with its unions ``remarkably constructive.'' Giuliani has avoided labor unrest by providing a voluntary severance program for city workers. ``To our knowledge, it's the first time in the country that we've had a severance program that allows downsizing without layoffs,'' Mr. Schwartz says.

Protests against cuts

City cuts are attracting protests, however. On Nov. 15 it seemed like a good, old-fashioned 1960s rally at City Hall Park as hundreds of demonstrators waved placards, sang songs, and chanted their unhappiness over education cuts. ``Rudy, Rudy, listen to me/ Cut your own sal-ary,'' they yelled.

One hundred yards away, on the steps of City Hall, a group of environmentalists complained about a cut of $12 million this year for recycling. Most of the cuts are in education and expansion of the recycling program, which currently recycles about 15 percent of the city's garbage.

``If we expand the program, we can include junk mail and increase our tonnage by 50 percent,'' says Kendall Christiansen, chair of the Citywide Recycling Advisory Board, an umbrella group.

Nearby, another group complained about the $19.5 million cut in funding for youth services. Gary Wartels, director of government relations for the YMCA, said the cuts will effect its ability to offer job training and after-school teen centers. ``Youth services is taking a disproportionate hit,'' he complained.

The mayor's political enemies are taking aim at the cuts as well. ``It is Medicaid, health benefits, and debt service that are growing beyond the rate of inflation. The mayor needs to deal with those areas of the budget,'' says Ruth Messenger, Manhattan Borough president.

The mayor, however, is looking at city services differently. For example, he is pairing city departments with private corporations, some with an expertise in downsizing or reengineering.

Not all the connections relate to a shrinking work force. The city's Parks Department is paired with ITT Sheraton. The connection: Customers of both entities ``have to leave with a smile on their face,'' Schwartz says.