Mayor Koch bounces back to face NYC's new economic dilemmas
''It was a disappointment. But it has not left me disconsolate or depressed. There is a difference between running for an office and losing and not remaining in public office (and) . . . where I am. I go back to continuing with a job I like. . . . Since the election, there's no question in my mind that I love being in public service.''
These words, spoken recently by Edward I. Koch, give a glimpse of the zest for his job this colorful mayor of the nation's largest city has rediscovered, after what could have been called a devastating defeat in the Democratic gubernatorial primary here to Mario M. Cuomo.
Mr. Cuomo went on to become governor in the general election. And, as far as many of his friends have been able to tell, Mayor Koch has now gone back to being mayor. But for nearly two months after his narrow September primary defeat , Koch was, in the words of one close observer, just ''going through the motions.'' His defeat was all the harder for him to handle because just a year earlier he had won reelection as New York's mayor by the biggest margin this century.
Now, in a wide-ranging interview in his City Hall office, Koch has put an end to conflicting reports about his dedication to and vigor for what some have called ''the second toughest job in America.''
''I still have my energy and sense of challenge, so that as far as I see now, I will indeed run for a third term,'' the mayor says.
While he no longer seems to be struggling with discouragement, Koch himself finds New York City facing some of its most serious fiscal and economic challenges in the last five years.
In the immediate 1983 fiscal year, which ends June 30, Koch administration analysts have forecast a $350 million deficit unless spending is cut and taxes raised. For fiscal '84, the budget situation may be far worse, with officials projecting a whopping $1.3 billion deficit unless drastic measures are taken.
The sources of New York's renewed fiscal woes - less than a year after the city stood on its best financial footing since 1975, when it almost went bankrupt - are manifold, the mayor says.
Much of the blame he places on Reaganomics, which, he says, has played a key role in the deterioration of the economy generally. Specifically, federal cuts have resulted in a loss of $850 million in direct aid to New York City over the past two years alone, according to Koch administration figures.
But Koch explains that the federal government cannot be the ''scapegoat'' for all the city's financial woes. Looking closer to home, Koch points to two other culprits: a major shortfall in anticipated state aid and, to a lesser extent, the city's own inability to keep the lid on expenditures.
In fact, Koch says that for the first time since he became mayor in January 1978, the state is ''in deep trouble'' financially, and thus unable to come to the city's rescue as much as in prior years. State officials are working on a series of proposals, from tax increases to new cuts in state aid to localities, to check further fiscal erosion.
The latest Koch administration findings on city expenditures, recently inflated, among many things, by hiring more policemen and firefighters, show the need to reduce expenditures by $148 million in fiscal 1983 and nearly double that for 1984.
But the mayor states categorically that in any efforts to hold the line on expenditures, ''the service reductions that we will have to employ over the next two years will not bring us below the level of services that I brought us up to in the first two years of my administration.''
He says that essential services will not be cut below their 1980 levels, or if they are, it will be done only as a ''very last resort.'' Barring unforeseen circumstances, he said, the number of police and firemen would remain constant for the next two fiscal years; any depletion in their ranks through attrition, by retirement, or other things would be made up.
To some urban observers, this sounds like good news. But it should be also viewed in context. Koch had promised, in the wake of his landslide mayoral reelection last year, vastly to enhance essential services. Obviously, priorities have changed.
''We have been set back this year by virtue of the fact we were going to enhance the services even more,'' Koch sums up.
The mayor made these other points in the interview:
Ailing infrastructure. ''The city's infrastructure - including bridges, sewers, highways - will require $34 billion in expenditures over the next 10 years. This year we are spending $2 billion.''
42nd Street. The long-awaited $1 billion private redevelopment of 42nd Street between Seventh and Eighth Avenues, one of the seediest areas in the nation, will begin in 1983 ''with actual physcial changes on the block.''
National politics. Koch said that ''the Democrats have a good shot'' at the presidency, and that Sens. Edward Kennedy of Massachusetts (who has since bowed out of the race) and John Glenn of Ohio are among the leading contenders.
Cuomo. He hopes to work closely with New York's governor-elect to help offset federal cutbacks on the state and local levels. He said he holds no animosity toward Cuomo and hopes he will be ''a great governor.''
On interviews. He was not tactful enough in his interview with Playboy magazine last year, which probably cost him the guberatorial primary, he said. In the article, he criticized New York rural and suburban life. But ''I don't look back; I look forward,'' he now says.