N.Y.C. Officials Tussle Over Fate of Agency Surplus

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Mayor David N. Dinkins of New York City last week was resisting the efforts of city and state officials who want to see a windfall from a state lending agency go to the city's schools.

The Municipal Assistance Corporation, an institution chartered by the state to provide city financing, has a $200-million surplus, and Governor Mario M. Cuomo, New York City Schools Chancellor Joseph A. Fernandez, and the New York City Council have urged that the money be spent on education in the city.

Mr. Fernandez, Carl H. McCall, president of the city board of education, and Peter F. Vallone, speaker of the city council, attended a contentious meeting of the assistance corporation this month to lobby for spending the money on schools.

Felix G. Rohatyn, the lending corporation's chairman, has suggested that the money be spent on education.

But Mayor Dinkins, who claims to have the ultimate authority over how the money is spent, has maintained that the money should be spent on early-retirement programs and other incentives to streamline city government.

"The Mayor recognizes how vital education is to the short and long-term needs of our cities,'' Jeff Maclin, a spokesman for Mr. Dinkins, said last week.

However, the city also badly needs funding for other areas such as infrastructure improvement and social services, and the corporation's surplus could be better spent helping to streamline the city government to help it keep its budget balanced in the long term, Mr. Maclin said.

Mr. Fernandez has proposed spending the $200 million to lengthen the school day for middle-school children, fund early-childhood intervention, and provide computer-assisted instruction. He has suggested spending the money over three years in installments of close to $70 million.

Mr. Vallone and other city council leaders have proposed taking $100 million of the í.á.ã. surplus and $400 million in financing from the corporation and spending $30 million for libraries, $142 million for computers, $200 million for new schools, $75 million for school maintenance, and $36 million for school supplies and special education.

Staff from the Mayor's office and the assistance corporation were expected to hold meetings this week to help iron out their differences over the funding.

Individual Budgets Released

Mr. Rohatyn has warned that, should no consensus be reached on how the money should be spent, it would go to pay off city debts.

City and state officials have until July 1993 to reach an agreement, however, as the money will not be available until the 1994 fiscal year.

Quentin B. Spector, executive director of the í.á.ã., last week denied reports that Mr. Rohatyn has threatened to withhold the funds if they are not earmarked for schools.

Mr. Rohatyn "has made no secret of his preference'' for spending the money on schools, Mr. Spector said, but "he did not stipulate that it had to be used for education purposes.''

As city and state officials debated uses of the surplus, Mr. Fernandez took an unprecedented step to help reduce spending in the district.

On May 12, the chancellor released individual budget documents for the city's 32 school districts for the first time in an effort to bring the city's 32 independent school boards under public pressure to spend their money more wisely.

"It's always painful when you let in the sunshine, but it's healthy,'' Mr. Fernandez said at a news conference unveiling the 3,085 pages of district documents, which will be sent in their entirety or in separate district volumes to 10,000 parent leaders, education advocates, and school administrators.

The documents, which Mr. Fernandez pledged to make available when he took office in 1990, show that the decentralization of the city's elementary and junior high schools that took place in 1970 has resulted in vastly different spending patterns among the 32 smaller districts.

Some districts, for example, spend more on classroom teachers, while others devote disproportionate shares of their budget to administration, supplies, or such noninstructional staff as security guards.

Vol. 11, Issue 36, Page 5

Published in Print: May 27, 1992, as N.Y.C. Officials Tussle Over Fate of Agency Surplus
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