City workers swell layoff ranks

New York announces cuts of at least 4,500 employees, as other cities face difficult decisions, too.

They call him Mike the Knife.

Dressed in a somber gray pinstriped suit, New York Mayor Michael Bloomberg reluctantly lived up to the moniker this week as he announced at least 4,500 city workers will be laid off.

That's a best-case scenario. If the state doesn't come through with as much aid as expected, the mayor has prepared a "doomsday budget" in which an additional 10,000 workers will get pink slips. No one is spared - from police recruits to the bears at two city zoos that will be closed.

"We're not going to be bailed out of this by anyone," the mayor said in a sober moment this week.

From Boston to San Francisco, mayors and cities managers are finding themselves in Mr. Bloomberg's predicament: short of revenue and facing increased costs. The result is one of the worst fiscal crises in 50 years - and an unusual number of public layoffs, even for a economic downturn. For instance:

• In Boston, 1,750 municipal jobs are slated to be eliminated, including 600 teachers.

• Chicago is laying off 100 top-paid managers.

• San Francisco is laying off 1,000 workers.

• In San Diego, 500 people, including police, firefighters, and lifeguards, now expect pink slips.

Factors driving the layoffs include the stagnant economy, spiraling healthcare costs, Wall Street's woes, and new homeland-security costs. As a result, the budget trimming of the past few years has been replaced with wholesale cuts. Public pools will stay closed this summer, trash will be picked up less often, and some streets will be left without police patrols.

"The financial crisis the states are experiencing, coupled with the federal government's withdrawal from partnership programs with cities and towns, is ominous and is going to have potentially enduring impact," says New Haven (Conn.) Mayor John DeStefano, president of the National League of Cities. "It is going to be huge in terms of financially dwarfing cities and towns in their ability to provide core services."

Three-quarters in trouble

While New York is unique because of its size, it's facing many of the same challenges as other municipalities like Burlington, Vt., and Santa Monica, Calif. According to a survey done by the National League, 3 of 4 city officials say they are less able to meet their financial needs this year than last - the highest such ratio since 1991 and 1992.

One in 4 cities has laid off police officers in the past year - and 1 in 3 in larger cities like New York and Boston. That's in part because the federal government has cut by more than 50 percent the Community Oriented Policing Program (COPS), which helped put 100,000 new police officers on the streets during the 1990s. In 1999, it provided cities and towns with $1.1 billion. Now, this is down to $580 million.

At the same time, cities' police and safety costs are spiraling due to the increased homeland-security needs. For instance in New York, more than 1,000 of the city's 38,000 police officers have been transferred to antiterrorism duty since Sept. 11. With the country on orange alert, the overtime and other additional costs like training bring the bill to about $5 million a week for the city.

In Burlington, a small city that's more like a comfortable town, police have had to be taken off the streets to patrol its airport. That's added several hundred thousand dollars in overtime to this year's expenses.

"We're getting very little help from Washington - a couple of small grants of several thousand each for equipment, but the real pressure is on overtime," says Burlington Mayor Peter Clavelle.

Last week, Congress did approve an additional $2.7 billion for local homeland- security needs. New Haven Mayor DeStefano says he's grateful for any help, but it's not enough, particularly with other federal programs to cities - from COPS to housing subsidies - being trimmed. "What good does it do me to give me a few bucks for homeland security when you're cutting COPS, cutting affordable housing funds, my homeless population is booming, and I've got to cover those costs as well?" he says.

State finances don't help

The budget uncertainty at the state level is also fueling the problem with local layoffs. Fifty percent of cities and towns say they've already experienced cuts in state aid. That number is expected to increase significantly this summer as the more than 45 financially strapped states cope with their own deficits.

That's left many cites, like New York and Santa Monica, holding their breath as they wait to see whether state lawmakers help or hurt their finances. For instance, Bloomberg's "devastating" doomsday alternative is premised on the fact that the state's $11 billion deficit could trump the needs of the city with its $3.8 billion gap.

In Santa Monica, City Manager Susan McCarthy is waiting to see how much aid from Sacramento will be cut this summer. That will help her determine whether the hiring freeze the city has implemented will be enough, or whether layoffs will have to follow. "It just injects an extreme amount of uncertainty," she says.

All of the economic stagnation and turmoil has forced 63 percent of the nation's cities and towns to increase fees for services and taxes.

Fifty-six percent are drawing down their reserves, and 40 percent say their fiscal crises are having a negative effect on quality of life. That's left many mayors scratching their heads about Washington's desire to cut federal taxes even more.

"It really just boggles the mind that at a time when they continue to push tax cuts in Washington, they're also cutting programs that are vital to people" says Mayor Clavelle. "And they're not reimbursing us [enough] for homeland security costs."

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