Mayor Rudolph W. Giuliani warned yesterday of "substantial reductions" in spending to keep New York City's budget balanced, and said he was considering steps like reducing welfare payments to single adults and cutting back city contracts to private companies.
Administration officials also said that savings might be found in increasing the number of prisoners in the city's jail dormitories by using bunk beds.
The Mayor would not elaborate yesterday on specific reductions. But he did say that the scope of the budget problem would force him to move more quickly than he had planned to cut the city's municipal work force by as many as 30,000 jobs, the amount he promised to cut during last year's mayoral campaign and twice the 15,000 cuts he has so far budgeted.
The Mayor also said that it could take months or years to resolve the city's fundamental budget problems.
"You cannot remove a 16-year process of overspending in one budget," the Mayor said, outlining some of his fiscal strategy in a speech before the City Club of New York, a civic organization. "It would be a catastrophe to do that. You would devastate the city."
The Mayor said he had not decided where to make the latest spending cuts, which come on top of $1.1 billion in reductions so far this fiscal year.
The cuts under consideration underscore the severity of the budget gap. The Mayor's office outlined the problem in separate briefings yesterday for City Council leadership and the City Comptroller, Alan G. Hevesi. Officials familiar with the discussions said the potential shortfall in this year's budget could reach $800 million to $1 billion.
The shortfall comes less than three months into the city's current fiscal year, which began on July 1 with a $31.6 billion budget. The gap has confirmed the direst warnings of the city's fiscal monitors, the City Comptroller, the State Comptroller and the Financial Control Board, all of which identified in July as much as $1 billion in savings that they said might not materialize.
The problem has been compounded by expectations of lower tax collections in the first quarter of the year and by a surge in spending on overtime, particularly at the Department of Correction as a result of the Mayor's efforts to crack down on crime.
In his speech to the City Club and in remarks to reporters afterward, Mr. Giuliani said it was "unrealistic and absurd" to believe that he could resolve the city's fundamental imbalance between revenues and spending only nine months into his tenure.
He said that each year for the last 16 years the city had increased its budget and then spent even more than allotted. By reducing spending for the first time since 1979, he said he had begun the process of forcing the city to live within its means. "I think we've made a substantial down payment," he said.
The Mayor then singled out and criticized a fiscal monitor, Raymond D. Horton of the Citizens Budget Commission. On Thursday, Mr. Horton blamed the midyear budget scramble on Mr. Giuliani and the City Council, saying their agreement last spring went only part of the way in solving budget problems.
Mr. Giuliani said, "This is the reason he's a fiscal expert and not running a government or a business."
At one point yesterday, the Mayor said the city would look for savings in the welfare program to single adults, though the State Legislature would need to approve any changes in requirements or benefits, about $350 a month to single adults.
The Mayor said that New York was one of only nine states that offered the program, known in New York as home relief, and that other states were canceling it or limiting the time people can receive payments.
The state now has roughly 395,000 recipients, 300,000 in New York City. The cost of the payments are divided between the city and state.
Without changes in state regulations, the city has little room to extract savings from the program. But in an interview, Mr. Giuliani said the city would try to reduce costs by fingerprinting the recipients and trying to get them off the rolls and into public or private jobs more quickly.
In the past, officials have said the Mayor's office is considering putting recipients to work in the city's parks, which suffered deep cuts in this year's budget and faces more.
Officials said the Mayor is also considering a plan to put prisoners in city jails in bunk beds, a process known as "double bunking." Recent court orders, though, have barred the city from the practice to save money.
"It's a mistake," said Robert Gangi, the executive director of the Correction Association of New York, a private, nonprofit monitor of the city's prison system. "And it could have serious consequences" for security.
Concentrating prisoners in barracks allows more efficient use of guards, and might help avert the need to open new jail space, officials said.
To move ahead with the idea, though, the city would need to seek relief from court mandates that prohibit the measure.
"Whatever we do with Corrections, we have to deal with a lot of court mandates," an administration official said.
Also yesterday, the City Council's finance committee held a hearing on one of the causes of the new shortfall: the surge in overtime. Appearing before the committee, Mr. Hevesi said that the administration had underbudgeted overtime costs at $250 million, even though overtime spending has steadily risen from $308 million in 1992 to a record of $486 million last year.
Mr. Hevesi noted that the administration had said it purposely set overtime budgets low to discourage agencies from relying on it. But, he said, "This method has obviously not worked. The spending projections are so low that they have not been taken seriously by the agencies."
One of the agencies with the biggest growth in overtime is the Department of Correction, which operates the city's jails. In the first two months of the fiscal year, overtime in the department increased 144 percent from the year before.
Donna Lynne, the director of the Mayor's Office of Operations, told the finance committee that Mr. Giuliani had issued an executive order a week ago to manage overtime by requiring monthly reporting of overtime expenses. Agency heads running unplanned overtime expenses are required to meet personally with the Mayor.
Mr. Giuliani said yesterday that it was premature to speculate on where any of the cuts would fall.
"Unfortunately," he said, "a lot of what happens in this process -- it's almost like a dance that we go through -- is you all succeed in frightening people with the effects of the layoffs, with exaggerated claims of what the layoffs might be, what the reductions might be."
