New York, New York, It's a ...

Pavarotti, Reh-gie and the Met; plus spreading slums and human struggles

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1) MONEY. Koch might have balanced the budget even earlier than promised had New York not been hit by a public transportation strike last spring. The wage settlements that ended that strike and averted another by city workers in June gave the unions raises averaging 17% over the next two years. That, in turn, put the city's $13.58 billion budget back into the familiar red. Earlier this year Koch told Congress that he anticipated no more than 4% in wage hikes for each of the next two years. Now, he expects a $265 million deficit for this year—$135 million of which is due directly to the wage settlements with the unions—and a deficit that could hit $1.2 billion in 1982.

Koch and Governor Hugh Carey have differed on how to reduce the deficit, Koch originally taking the position that only a general tax raise could do the trick, Carey believing that high taxes would drive business from the city again. In the past few weeks Koch appears to have come around to Carey's view. Naturally, both leaders would prefer to rely on the Federal Government for help, but until that traditional cornucopia spills open, an increase in property taxes, which would not bring in enough, is about the only course of action available. Still, Koch has just about managed to eliminate the city's once gargantuan short-term debt of $4.5 billion. As Felix Rohatyn, chairman of the Municipal Assistance Corporation and the city's chief financier, told TIME'S Frederick Ungeheuer: "The city is clearly stronger than it was five years ago. But it will take at least two consecutive years of balanced budgets without gimmicks before it can get back into the long-term market again."

2) WELFARE. In 1977 there were 962,000 people on welfare in New York. As of April 1980 the welfare list was down to 867,173. That drop is due in part to the general decline in the city's population (now estimated at 7.1 million, compared with 7.9 million in 1970) but is due more to tighter eligibility rules and to the rooting out of welfare cheats and frauds. At present the city pays about $1.2 billion out of its own tax revenues for aid to dependent children, or exactly the amount projected as the city deficit in 1982. Nearly everyone in the know, from Koch to former Mayor (and now senatorial candidate) John Lindsay, agrees that the solution is for the Federal Government to pick up New York's welfare burden. To date, only the Federal Government has not agreed.

3) RACE. "I been trying to get a job for two years," says Danny, a tall young black in Bedford-Stuyvesant. "Nothin'. My father, he tried for two years and then split. We haven't seen him for a year. So how do I live? I hustle... deal some dope, do a little stealing ... maybe even try to knock over a white newspaper reporter if I thought he had anything worth takin'. That's how a lot of us live out here."

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