On Wednesday, February 13th, I released the City's Preliminary Budget for the next fiscal year. That was the first step in an approximately four-month budget adoption process involving the City's other elected officials and you, the people of New York. The result will be a final spending plan for all City agencies for Fiscal Year 2003, which begins on July 1st.

In plain words, our City is facing its worst budget crisis in 25 years. The national recession and the attack on the World Trade Center have wreaked havoc on New York's economy. We've lost nearly 100,000 private sector jobs since September 11th. Many of our leading industries, from financial services to tourism, have suffered big drops in business and profits.

Fewer jobs and reduced business activity translate into less revenue for City services. I estimate that our budget deficit for fiscal 2003 will be about $4.8 billion. Our economy will recover. But until it does, balancing the budget will involve some very tough choices.

My budget plan makes these choices: We're not going to raise taxes. We're not going to layoff City workers. We're not going to use short-term budget gimmicks. And every City agency will have to tighten its belt. For starters, I've cut the budget and the headcount for the Mayor's Office by 20 percent.

Smart management will keep the pain of belt-tightening to a minimum. By putting civilians at desk jobs, for example, we can maintain the same number of police officers patrolling our streets. I intend to keep New York the safest big city in the nation. The budget for the Board of Education will be reduced by only about 3%, when you factor in State and Federal aid. The classroom education of our children should not be harmed. But I am not going to mislead you; there will be cutbacks in some City services.

Of course, the State and Federal governments should do their parts, too, and I am confident they will. Albany and Washington understand how important a safe and healthy New York City is to the prosperity of our state and nation. Much of the help we're asking for would involve no new State or Federal funding; it would simply mean giving the City greater flexibility and control over using funds we will already receive.

In order to get help from the State and Federal governments, it is essential that we show how we're going to put our own fiscal house in order. We'll do that by managing our finances with fairness and intelligence. And in the process, New York City will emerge from this budget crisis stronger and more united than ever.