GOVERNMENT: Rescuing New York, and Other Tales

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Down Manhattan's Fifth Avenue one morning last week, a group of young choirboys marched on their way to a picnic, hopping gaily and singing Nearer, My God, to Thee. The rest of the city was not so blithe. In the third day of a wildcat sanitation workers' strike, mounds of garbage were rising on the sidewalks, rotting in the July heat. At night, especially in the slums of the South Bronx and Harlem, trash fires flickered and fumed in the streets like smudge pots—and, of course, there were not enough firemen to cope. "Fun City? Fear City?" the head of the firemen's union said histrionically. "This is a burning city—a dying city."

Actually, it was merely old New York—debt-ridden, overextended and underserviced—crippling through another week of crisis in its accustomed position just at the edge of the precipice. All spring, New York City had been staving off bankruptcy, partly through a new arrangement for borrowing, partly by promising drastic layoffs of some of the 338,000 workers on the city payroll (TIME, June 23). Last week, as the new fiscal year began, 19,349 workers had been dismissed, and another 20,000 were scheduled to be fired. More than 5,000 cops turned in their badges and pistols. More than 2,000 firemen were laid off and 26 firehouses closed. Nearly 3,000 of the city's 10,600 sanitation workers were dismissed.

The cuts in such areas as fire, police and sanitation seemed disproportionately high to some, who accused Mayor Abraham Beame of making such inflammatory reductions to increase his leverage with the state in Albany. In fact, firing workers in welfare, health services and some other fields would have saved less money; much of those salaries is paid from federal and state funds.

The Patrolmen's Benevolent Association accepted the layoffs, though with bitterness and threats of work slowdowns. Firemen called in sick in record numbers. The sanitation workers, with the token protest but implicit approval of their union leadership, illegally left their jobs, promising to turn New York into "Stink City" and shouting from picket lines, "Wait 'til the rats come!"

For three days, as the garbage festered, Mayor Abraham Beame quickened his shuttle negotiations with Albany, trying to find a new accommodation for the city. The task was considerably complicated by Beame's being caught in a political crossfire between Democratic Governor Hugh Carey and State Senate Republican Leader Warren Anderson, who tied any increase in state aid and taxing power to increased school aid for his suburban constituency.

Rewarding Strike. At last, Albany and the Big Apple threw together another financial arrangement: Governor Carey and Anderson compromised on an agreement to grant the city $330 million in new taxing powers—money to be raised mainly in the form of levies on bond sales, banks and corporate franchises, a painful step in a city where taxes are already higher per capita than anywhere else in the U.S.