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After a year of endless and agonizing budget cuts of billions of dollars, Mayor Rudy Giuliani finds himself preparing for another year of--yes--more budget reductions.
The problem is that the mayor is caught in a pincer movement: a stagnant economy is depressing revenues while costs--particularly Medicaid, debt service and pensions--continue to rise.
The budget-cutting mood in Albany and Washington provides little opportunity for relief. To make matters worse, the various budget crises mean that by year end the mayor will have used $1 billion in "one-shot" revenues--money that won't be around to help balance next year's budget.
That is why Mayor Giuliani faces a $2.7 billion deficit for the fiscal 1996 budget beginning July 1 and why the preliminary budget plan he releases Tuesday will include an extraordinary combination of labor givebacks, agency consolidations and social service reductions to keep the city in the black.
"We have a big gap for fiscal '96 because a lot of the '95 actions were one-shots and did not provide recurring savings," says Ray Horton, president of the Citizens Budget Commission. "There's also a problem because revenues are going to have to be written down and intergovernmental aid has to be written down."
GAP CONTINUED TO GROW
The Giuliani administration knew it had a problem for next year even as it was trying to stanch this...