By HENRY J. STERN

A worthwhile forum was held last week at Baruch College's School of Public Affairs. The topic was "Declining NY Revenues; What to Do?" The topic is timely, considering that the recession we are now in or near is expected to adversely affect tax payments to the city. It was generally agreed that the most sensible way to respond to falling revenue was to reduce expenditures. Saying that, however, is far easier than doing it, and does not solve the problem of where to cut.

Panel moderator expert Dr. Steve Savas, a Presidential Professor at Baruch College, described seven methods which governments use to balance a budget.

The first way to approach a balanced budget, said Savas the sage, is by fiscal trickery, such as the postponement of expenditures. During the fiscal crisis the city's teachers were due to be paid on June 30. By delaying the payment one day, to July 1, Mayor Beame was able to defer millions of dollars into the new fiscal year. No money was actually saved by this maneuver, but it put a much better face on the old year's expenditures.

A second option is borrowing money. A thirty-year bond defers payment for a generation. The opposite of leaving assets to your descendants is leaving your debts for them to pay. This negative inheritance is New York State's gift to its future citizens, if they choose to stay in New York and pay it. Many do not.

A highly touted way to save money is through the reduction of fraud, waste and abuse. New York State provides rich opportunities for scammers. Medicaid fraud is said to run as high as $20 billion per year and could be significantly reduced by more vigorous enforcement.

Fourth is raising taxes, which Savas defined as plucking the most feathers from the goose, while eliciting the least hissing in response. Of course, one must be careful not to actually kill the goose, for she lays the golden eggs, and you will not find a trove of Faberge in her stomach or her uterus.

Fifth is reducing spending, which is most easily done by not filling vacancies. This usually results in the agencies that are the most directly service oriented soon becoming understaffed, while those deskbound employees who are lifers because they will never find anything as good, remain at their posts until they are ready to cash out with maximum benefits.

Savas's sixth suggestion was increasing efficiency. One can cut spending without cutting services by improving efficiency, but that takes a lot of political will and effort and often arouses fierce opposition by public employee unions.

His last suggestion was to rethink the role of government. What should government do? To what extent has it drifted beyond the powers granted in the Constitution? What should be privatized? How are earmarks for members of Congress, "member items" for legislators, and slush funds for members of the City Council legitimate government expenditures? Why are grants that are not clearly related to public functions made to community organizations? Should government revert to its core functions?

Alas, if the city is in a budget crisis, major reforms like these cannot be enacted in time to save money. If the city is not in crisis, major reforms are ignored as there is no pressing need to save money. Inertia wins and budgets grow.

In government, there is far less incentive than in the private sector to save time and money on a project. The employees and their unions rule the roost, but even when they do not, inertia often carries the day with the same results.

There is no doubt that federal, state and local governments have been the instrument of transferring many people from relative poverty to the middle class, which is a great public good. It does cost a great deal of money, which must be paid by all citizens in the form of taxes. There is constant political pressure to keep services up and taxes down. This results in the creative accounting, the deferral of costs, the perpetual and increasing borrowing to conceal deficits.

These are not issues where Democrats and Republicans are primarily split down party lines. Each party is loyal to its funders, and the unions are wise enough to contribute to both, especially when different parties control different houses of the legislature.

Difficult political choices are unlikely to be made on these questions because every other year is an election year for the legislature, and the largest and most powerful lobbies are the public employees unions. Around the country, unionism is in decline, because private corporations must face economic reality or become extinct. Only in the public sector has union membership grown, buttressed by lobbies which both reward and intimidate public officials. They conduct business under the certainty that their employer will never go bankrupt, regardless of how poorly the business is managed, or how much it spends for salaries, pensions, health care and fringe benefits.

StarQuest@NYCivic.org