JANUARY 11, 1995

One year ago I stood right here, a newly elected mayor speaking to you about my plans to fulfill the promises I made during my campaign:

Conventional wisdom said my Administration would not succeed.

Conventional wisdom said that New York City was ungovernable, its problems deeply entrenched, and its people unable to come together to solve them.

In one year we have proved conventional wisdom wrong. We have demonstrated that New York once again is a city of innovation, a leader in the art of governance, a model for the nation.

We proved conventional wisdom wrong in the area of public safety.

In 1994 New York City saw a reduction in crime, by a margin three to six times the national average.

No other city has sustained three consecutive years of declines.

In two of the most serious categories -- murder and robbery -- our reductions were the largest one-year drops ever.

New Yorkers owe a debt of gratitude to: The City Council, Speaker Peter Vallone, and to Mayor David Dinkins, for having passed legislation to require the numbers of police necessary to make New York City a safer place.

Police Commissioner Bill Bratton and I worked hard this year to motivate and reorganize the department, implementing five new police strategies aimed at:

By enforcing the laws against aggressive panhandlers, squeegee operators and graffiti vandals, we've made our city more liveable, improving the quality of life.

As 1994 came to a close, New York City's crime rates were falling even faster than at the beginning of the year, indicating that our efforts are paying off.

I want to thank Commissioner Bratton, his staff and all the members of New York City's Police Department.

When all the FBI crime statistics have been compiled New York City will not even be among the top 50 cities for crime in America.

And it also has been a year of great accomplishment and great sacrifice for our Fire Department.

Although six brave men died, the introduction of protective bunker gear undoubtedly prevented more deaths and injuries.

I visited 18 firefighters injured in an explosion on 34th street in the early morning hours of December 26.

I was moved and gratified when they thanked Commissioner Safir and me for providing the bunker gear, which many of them believed saved their lives.

Despite their tragic losses...under Commissioner Safir, morale in the Fire Department is at an all-time high.

In the last twelve months we've taken steps to make New York a pro-business city -- and that's something we can all be proud of

Because being pro-business isn't about ideology, it's about providing jobs. Businesses want to be in New York City and people want to live here. But in an increasingly competitive world marketplace -- one in which fax machines and computer networks can instantly connect people at opposite ends of the globe -- New York City has to offer business an attractive environment.

Together with the state we reduced the hotel occupancy tax...and with the cooperation of the City Council we reduced the commercial rent tax, which was particularly burdensome to business.

We proved conventional wisdom wrong with our success in shrinking government, and making the public sector more efficient. Working as partners with the city's municipal unions, we cut the city workforce without layoffs. Our severance package helped us reduce the payroll by 15,000 positions in this first year, reversing a trend of seemingly relentless government growth.

And our unique severance and redeployment programs are now being studied by other cities.

We rejected the Board of Education's contract with school custodians, because the city would have been forced to spend even more money on a system riddled with inefficiency and waste.

We went back to the negotiating table and forged an agreement that does away with outlandish perks and privileges, ties productivity to pay for the first time ever, and puts principals -- not custodians -- in charge of the schools.

It was a major breakthrough.

And we're proving conventional wisdom wrong on reducing the school bureaucracy.

We prevailed on the Board of Education to eliminate 2,500 non-teaching positions last year.

That's just the first step. There's still much more to do. But that's more than has been done in a long time.

New Yorkers always pull together when the going gets rough.

Who can doubt our independent spirit...our self-reliance...our determination?

After all, last year we persevered through 17 snow storms during the worst winter in 50 years.

Our streets were cleared, city services continued.

Jewish and Arab New Yorkers defied expectations by refusing to allow the hateful crime of a lone gunman on the Brooklyn Bridge to trigger further conflict between their communities.

Many people feared that tensions in Crown Heights would again arise, when the first day of the Jewish New Year coincided with the Caribbean Day Parade.

Instead, Brooklyn's Hasidic and Caribbean communities solved the problem by talking -- and listening to each other's concerns.

In the end, the parade's organizers invited the Hasidim to march with them.

And the day was a peaceful and joyous one for all.

Despite dire predictions of unrest,

Our efforts on 125th Street to enforce the law against illegal vending was a success.

It was a measured response to the needs of Harlem's merchants and residents.

I want to thank the public officials and all the people in Harlem who worked closely with Commissioner Rudy Washington and Manhattan North borough commander Wilbur Chapman on this difficult particular: Councilwoman Virginia Fields, State Senator David Paterson, Congressman Charles Rangel, and Assemblyman Keith Wright. Most recently, when a bomb exploded on a subway train in lower Manhattan, New Yorkers came to each other's aid and became heroes to us all. Throughout the past year this Administration fulfilled its promise to impose one standard for all New Yorkers, and to treat every community in this city with the decency and respect it deserves.

We believe that government must perform its core functions more effectively, and do what it promises.

I appreciate the way in which the legislative and executive branches of city government found common ground this year.

The media naturally has focused on our differences, because of our recent budget disagreement.

But Council speaker Vallone, the members of the City Council, and this Administration have compiled a record of accomplishment, not conflict.

We have demonstrated that despite our different roles, we can work together in the best interests of the city.

Consider the budget we passed, which reduced spending for the first time in 16 years, and set the city moving in a much more responsible direction.

And consider what happened when the Council passed a bill giving it a role in reviewing privatization contracts.

I vetoed it...the City Council overrode my veto, and although I was advised to make a legal challenge, I recognized the Council members' concerns, and agreed to work with them on our program.

Then consider what happened when the Council passed a bill limiting the city's ability to restrict street vendors in mid-town Manhattan.

I vetoed it, but asked consumer affairs Commissioner Fred Cerullo and Business Services Commissioner Rudy Washington to study the issue. Instead of pushing for an override of my veto, Council members are working with us constructively to resolve the problem.

I look forward to passage of a bill that will improve the way street vending is regulated in the city.

And consider our innovative approach to protecting women's health clinics.

In a time when the safety of staff and patients at these clinics is becoming a national crisis, this Administration and the City Council came together to pass the most extensive clinic access bill in the nation.

Our legislation is being studied by cities and law enforcement agencies across the country -- another example of New York City's innovative spirit.

Recently, I met with Speaker Vallone to discuss our upcoming budget modification.

We've agreed to a new process: we will discuss the content of the budget modification with the Council in advance, and negotiate as many of the terms as possible, before the modification is officially submitted.

I begin my second year encouraged by the prospect of building on the many successes we have realized together.

We must continue: to make gains in the battle against crime, in the effort to grow our economy, in improving our education system, in reforming welfare, in restructuring government, and in resolving our budget problems.

In the past year, we have made more progress on crime than we could ever have expected.

Now we need to ensure that those gains are made permanent.

Because drugs cause so much misery and death in our city, I am determined to make a lasting contribution to alleviating this problem.

Nearly twenty-five years of involvement in the fight against drugs has taught me many things, chief among them is that we must deal not only with the supply, but also with the demand for drugs.

So today I am issuing a warning to buyers, as well as sellers.

Our policy will be to arrest and prosecute those who buy drugs, not just those who sell them.

We must do more to take drugs off our streets, because it's a poison that destroys lives, too often the lives of young people.

Young people are this city's most important concern. And they are in danger.

While crime declined in the city in 1994, the Board of Education reports that crime in and around our public schools increased in the 1993-94 school year.

Serious crime in and around the schools -- including assault, robbery and sex offenses -- increased in schools 15.5 percent and serious crime around schools increased 47.5 percent over the previous year...a year in which overall crime declined by 12% in the rest of the city.

Incidents involving controlled substances jumped 73 percent.

The situation could worsen in the next two to three years, with a new generation of troubled and increasingly violent young people.

Criminal activity is closely related to drugs.

Surveys indicate that roughly 80 percent of all those over the age of 15 who are arrested test positive for drug use.

The best way to prevent a return to rising crime rates is to make a major effort against drugs, with special emphasis on keeping drugs out of the hands of young people.

We are developing a deliberate strategy that will achieve permanent change.

We call our effort a strategy, not a war, because wars suggest unconditional victory or defeat.

This strategy will be about reducing the drug problem: through law enforcement, treatment, education, and provisions for securing neighborhoods after they've been taken back from the drug dealers.

We will focus particularly on removing drugs in and around our schools, removing drug dealers and providing new treatment and education programs.

We will vastly expand and intensify drug-free zones around schools in the five boroughs.

Regular patrols will be conducted in these zones, by the NYPD's undercover strategic narcotic and gun teams and by uniformed officers.

Taking our schools back from drug dealers and violent criminals will be at the core of our drug enforcement strategy.

This Administration has done a great deal together with the City Council to establish fiscal responsibility in the city's budget process.

In just one year, we've gone a long way toward restoring the balance between government and the private sector.

But we have a long way to go.

To reduce a structural deficit of over $2 billion, we are going to have to make some tough decisions in 1995.

We must continue to reduce the size of government; restructure it; and make major reductions in entitlements.

This is simple reality.

Compared to the average of ten other major American cities, New York City spends ten times as much on welfare, and four-and-a-half times as much on health care. If our expenditures were in line with the average, we would enjoy a $6 billion surplus, instead of a structural deficit of more than $2 billion.

Rest assured that even after we've made the necessary cuts of more than a billion dollars, New York City will continue to spend more on helping people than any other city in America.

And in the end we will create a better city, one that is more efficient, one that is competitive with other cities in America, one that produces more jobs.

But cutting our spending isn't enough.

We must continue to expand private sector opportunity.

We've launched a plan to revitalize lower Manhattan, the Wall Street area that symbolizes New York City's financial might.

Our new anchor program is a deliberate effort to double the number of home owners and business owners in distressed communities.

Our program has begun in one community in Brooklyn, and we will expand it to other areas of the city.

In December President Clinton announced that New York was one of only six cities selected for a federal empowerment zone, which will result in $100 million in federal money and additional tax credits and incentives for Harlem, Washington Heights, and the south Bronx.

Only a year ago it would have been difficult for some to envision Congressman Rangel and this Administration working together to win this zone.

We did it for the good of the city. And we've developed a strong relationship for the future.

We are working hard to expand the city's economy.

But our children never will be able to fully participate in its benefits if the education our schools provide is not of the highest standard.

Let's face reality.

New York city's public school system isn't working. That's not an accusation. It's a fact. And defending the status quo won't solve our problems.

As mayor of the city of New York, I am held accountable for the state of our school system. Yet I have no control over the way the Board of Education spends its $8 billion budget.

If I did, you can be sure that I would direct a much larger percentage of the $8 billion to classrooms, schools, teachers, nd students.

The reason for my insistence that we act quickly and decisively is that, with each day of temporizing and placating, fewer and fewer children are properly educated.

Some of that loss is irrevocable.

And we will pay the price, not only in the city's economy, but most importantly, in its heart and in its soul.

The four things that must be done to save our school system are:

First: we must have school-based budgeting. By the Board of Education's best and most recent estimate, there are 1,095 schools in the city.

We should divide our $8 billion education budget among them -- with only a tiny fraction going to administration.

Right now the budgeting process works from the top down. The city gives $8 billion to the board...eventually some of it reaches schools and classrooms. Instead, it should work from the bottom up. The money should go to the schools first, and whatever is left over -- hopefully very little -- will go to Administration.

Second: we must have a modern, transparent, and understandable accounting system, one that can easily distinguish between administrative costs, and school-based expenses.

Third: we must close the gap between what the system spends on special education (almost $24,000 per student); and what it spends on the rest of its students (less than $5,000 per student).

And, fourth: we must continue to shrink the bureaucracy in the system. We've only just begun.

We must create the kind of school system our children deserve, one that is the pride of our city and the envy of the nation.

I am hopeful that we will have that chance, because Governor Pataki and the mayors of Buffalo, Albany, Syracuse, Rochester, and Yonkers all support an effort to give control of school budgets to local, elected authorities.

Another system in desperate need of reform is welfare.

Yet some doggedly defend the status quo -- maybe because they fear our current welfare system will be replaced with nothing at all, leaving the needy with no support.

I believe we are better than that.

To perpetuate a system that forces New Yorkers into a life of dependency, sometimes from one generation to the next, is just plain wrong.

Instead of fearing change we should lead the way. And that's exactly what New York City is doing with our workfare program, A program that recognizes the concept of reciprocity: that for every benefit there is an obligation, for every right, a duty.

Most people derive much of their sense of self worth from the work they do. Workfare offers assistance, dignity and hope, all of which can be found in a job, the very best social program there is.

Our workfare program recognizes that welfare is supposed to be a temporary helping hand, not a way of life.

And our program recognizes that the current home relief program includes recipients who need and deserve assistance, and those who don't. Fingerimaging will distinguish between those who are entitled to benefits, and those who are seeking to defraud the system.

We intend to continue working closely with Mary Glass, who was so successful in guiding Westchester's welfare reform.

She was an important advisor to us and is now social services Commissioner in Governor Pataki's Administration.

We know the old system doesn't work, so let's give a new idea a chance.

The municipal unions certainly recognize that the system must be changed. This past year we entered into the first ever agreement with the city's largest union to jointly manage a workfare program.

We shouldn't fear change.

In the year ahead we face many changes.

For example, one change that will help save lives, is fire Commissioner Howard Safir's plan to eliminate fire call boxes throughout the city.

Last year firefighters made 259,000 runs in response to false alarms. Sixty-seven percent of false alarms emanate from call boxes. The overwhelming majority of calls from fire boxes -- ninety-three percent -- are false alarms, which put our firefighters and citizens at unnecessary risk and leave New Yorkers unprotected when actual fires and emergencies occur.

Instead of wasting resources and risking their lives answering false alarms, our firefighters will be doing what firefighters in 60 percent of America's cities do when they aren't fighting fires: providing the first response to medical emergencies.

Our first responder program will boost the department's productivity. More will save lives, by speeding medical help to victims.

Because fire houses are strategically located throughout our city, response time is cut in half.

First responder response time is an average of four (4) minutes.

In contrast to the average EMS response time of over 8 minutes.

Another example of a change that will enhance public safety is the planned police merger.

Mayors Koch and Dinkins both favored combining the NYPD, with the Housing and Transit Police Departments.

Having three separate departments impedes police investigations, because most criminals don't commit crimes exclusively on subways or in public housing. It is also wasteful -- requiring three sets of administration.

Merger will put more officers into enforcement, making our subways, buses, public housing and our streets safer for us all.

In the coming year the relationship between local, state and federal governments likely will be redefined, requiring us to be even more self-sufficient.

Alarmists fear that without continued assistance, at precisely the same level from Albany and Washington, New York City can't survive.

I say those concerns are unjustified.

Let's draw strength from our achievements, and just as we did last year, view these challenges as opportunities to restructure and improve our city.

Let's seize this opportunity to show Albany, Washington, and the world how a modern American city operates: independently, without constraint or overbearing direction from state and federal authorities.

This does not mean we won't fight and fight hard to achieve equity.

But it means we will do so with a record of reform, which will rival the records of the federal, state, and city governments throughout America, a record of fiscal restraint, rather than uncontrolled spending, a record of crime reductions making us one of the safest large cities in America, a record of welfare reform, a record of unprecedented agreements with labor on severance and productivity...

And as a city that has recaptured its reputation as the world's greatest city.

From that record of strength we can make a compelling case for fairer treatment from Albany and Washington.

It's an urban agenda built on a perception of cities not as problems, but as assets.

If the past year has proved anything, it is that the answers to our problems will come from us -- New Yorkers.

We are the experts on urban life...on its problems...and its promise.

It is time for New York City, and cities across America to debunk the stereotype that portrays us as a drain on the national economy.

New York city sends far more money to Albany and Washington than it gets back. The downstate area sends about $3.3 billion more to Albany than it gets in return, whereas the upstate region receives about $3.4 billion more than it contributes.

The whole state of New York sends Washington about $14 billion more than it gets back, of which New York City contributes $8 to $9 billion.

If we could redress just one third of our inequity with Albany and Washington, we could wipe out our structural deficit.

We must make the rest of the nation understand that when we ask for programs for New York City, we are merely seeking a return on the investment we are making in the rest of America.

New York city produces wealth for the state and the nation.

It's true that we have a disproportionate share of the state's poor. But New York City doesn't generate poverty, it generates wealth, which attracts poor people seeking to ascend into the middle class.

And that's exactly what many of them do.

It's our goal to increase that number.

So what do we want -- what do we need -- from Albany and Washington?

Simply the freedom to manage our own budget, to make decisions ourselves about how to spend our money.

We don't have that now.

On the contrary, more than half of the city's budget, goes to pay for court- ; state- ; and federally-mandated programs, for which the city receives inadequate funding.

Some of these mandates are expensive, like Medicaid, which costs us $2.4 billion a year.

Others are ridiculous, like a consent decree, that requires the New York City Department of Correction to clean the windows of all New York City prisons not once, not twice, but four times a year, at a cost to taxpayers of $400,000.

1995 will be a year of change in Albany and Washington, the results of which will be felt right here in our five boroughs.

Change can be difficult. Change can be frightening. But New Yorkers should realize that we have nothing to fear from change. Because we have led the way. Over the past year we've prepared New York City for precisely the era we are now entering.

We've led the way in shrinking government.

We've led the way in working with labor to trim the workforce, redeploy workers and boost productivity.

We've led the way in making our city a better place to do business -- cutting taxes and making government responsive to the needs of business.

We've led the way in attacking crime -- including developing a program to break the cycle of family violence, a category of crime that in the past has been ignored.

When I consider the year just passed, I am reminded of the philosopher arthur schopenhauer, who observed that when faced with change, people first deny it, then they vigorously oppose it, and finally they accept it as self-evident.

In the beginning many of our changes were resisted.

Now many of them are attracting the attention of cities across the nation.

We are asking of New York City precisely what we are asking of those on welfare -- self-reliance.

New York can set the urban agenda in a new direction.

The old agenda was based on looking to others for solutions to our problems.

The new urban agenda should declare that we can solve our own problems, without direction from state or federal authorities.

For too long cities were defined by their problems.

I believe -- as I said before -- that America's cities should be defined by their assets.

I leave you with one thought.

If I have demonstrated one thing to you this year, hopefully it is that I always will put the good of New York City first.

Whenever we discuss, debate or disagree, you can always persuade me to change my mind, if you can persuade me your approach is better for the people we serve.

And one other thing -- the people we serve are all the people of our city.

One of our city's greatest legacies is its dedication to caring for those in need.

The changes we must make in the coming year will enable us to provide that care more effectively.

But it won't change our commitment to preserving government's role in protecting the most vulnerable members of our society.

We may dispute philosophy -- for example the need for reciprocity, which I believe just makes sense.

But never will we let New York abandon its tradition of helping the neediest among us, a tradition of compassion and concern no other city in the world can rival.

So let's return tomorrow to our debates and discussions,

But let's do so fortified that we now have worked with each other successfully, and accomplished a great deal.

Although at times we differ on means, all of us stand as one in our love for this city and in our dedication to improving it.

First and foremost we are New Yorkers. Everyone else in America and the world thinks we're special.

Well we are.

Thank you.

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