By MOLLY CHARBONEAU

The New York City budget adoption process reached a crossroads in April, as the City Council and Mayor Michael R. Bloomberg squared off over proposed cutbacks and tax increases aimed at bridging a nearly $5 billion gap.

District Council 37 and its locals played a vigorous role in the debate, testifying against service cuts at numerous hearings during March and April. As the Public Employee Press went to press, the union was preparing to release a detailed special report expanding on Executive Director Lillian Roberts' testimony about areas where the city can save millions of dollars (see box).

Mayor wants labor savings
The mayor's executive budget, released April 17, contained few changes from the February preliminary plan. While Mayor Bloomberg included selling taxi medallions to raise revenue, he did not propose any additional tax programs to reduce the budget gap.

The mayor's proposal also included a $500 million contingency reduction program in case needed state and federal aid and the requested labor savings fail to materialize.

The contingency plan called for additional 7.5 percent budget reductions for most agencies, 2.5 percent for the Board of Education and uniformed forces, a delay in hiring the next police class, elimination of a plan to hire 800 civilians in the Police Dept. and a 10 percent staff reduction in the Parks Dept.

The administration hopes to achieve $500 million in savings by negotiating with municipal unions over pensions and fringe benefits, and an additional $50 million for FY 2003 through a severance and early retirement package. The mayor warned that unless unions agree to the pension and benefit adjustments, "the contingency cuts include layoffs." (See page 3.)

However, until the completion of the schools budget - which may include added state funds that could reduce the city's contribution - the final need for the labor savings remains unclear.

Other changes of importance to DC 37 and its locals include the restoration for FY 2002 of overtime funding for the 75 ambulance tours the Fire Dept. was scheduled to turn over to voluntary providers; the addition of two structural engineers in the Fire Prevention Unit; the reversal of a plan to civilianize export posts in the Sanitation Dept.; the restoration of a $1-million gap-closing cut in the Dept. of Citywide Administrative Services; a $1.98 million increase for Homeless Services Family Staff; and funding of collective bargaining increases at the City University of New York.

City Council alternative
On April 8, the City Council released its alternative financial plan. The council projects $100 million in savings through an early retirement incentive for city employees and does not call for layoffs.

Titled "Education First," the council plan included a noteworthy proposal to levy a $400 million Personal Income Tax Surcharge to leverage a $5 billion capital program dedicated to education. The council also identified $1.2 billion in additional resources, including $445 million more in revenue than the mayor projected.

The added resources would include $831 million to restore many of the mayor's proposed reductions and fund council initiatives. The council also called on the state to restore the Commuter Tax, with proceeds used to further reduce the $1.5 billion in proposed borrowing and reduce interest payments in coming years.

The City Council' s agency savings program includes a proposal to privatize collection of Emergency Medical Services Ambulance Transport Revenues (generating $100 million) and to fully restore funding for 75 ambulance tours for FY 2003.

Civilianization saves money
The City Council also estimated higher savings through reducing uniformed headcount in the Police Dept. by 1,600 positions and adding 800 civilians. Because 726 of the uniformed officers involved are above the entry level, $20 million more could be saved above the $43 million already projected.

The council would also civilianize an additional 232 positions to save $10 million in uniformed overtime. Nevertheless, the mayor's contingency cuts would eliminate the plan to hire 800 civilians.

Agency restorations
Besides dedicating the proceeds from the Personal Income Tax Surcharge to fund capital programs in the schools, the City Council would also restore $344 million in operating funds to the Board of Education, bringing its funding back to the FY 2002 level, and provide $1 million in funding for School Crossing Guards.

The council plan would also restore $19 million to the Dept. of Cultural Affairs and $32 million to the libraries, and establish a Minority and Women-Owned Business Enterprise Program.

The council's alternative would also restore $60 million of the mayor's proposed $80 million cut in child care funding for FY 2003; enhance HIV prevention and infant mortality funding; provide $11 million in after-school programs; restore $5.5 million to Family Health Services clinics; and restore $2.55 million to HHC's Diagnostic and Treatment Centers and $360,000 to the Sydenham Clinic.