April 25, 1998

Mayor Rudolph Giuliani proposes $34-billion budget for New York City in fiscal 1999; calls for $312-million cut in personal income taxes for city residents over three years; City Council Speaker Peter Vallone wants $1.4-billion cut; photo; chart; graph; Giuliani, who says he will negotiate, wants to use most of $2-billion surplus from this year to reduce future budget gaps and finance law enforcement and education programs; proposes ten percent increase for Board of Education: public schools would get $4.9 billion, highest amount ever; money would add arts, music and after-school reading classes; Giuliani also proposes cuts for libraries and cultural institutions and, brandishing attendance book, threatens to withhold $110 million from community colleges unles they start taking attendance; would continue commercial rent tax on big businesses below 96th Street and use proceeds for new baseball stadiums including, possibly, one for Yankees; budget has $14 million more for foster care and $7.2 million to recruit and retrain child welfare workers (M)

Report noted on indications that Kenneth Starr's investigation of Pres Clinton will continue for long time

Truck laden with 22 tons of stainless steel suitable for making missiles is intercepted by customs officials in Azerbaijan en route from Russia to Iran; map; Russian officials had failed to halt shipment despite warning from US intelligence, raising questions about promise to clamp down on such sales to Iran; special alloy can be used to make fuel tanks for Scud missiles (S)

Chicago Bulls defeat New Jersey Nets in overtime, 96-93, in Game 1 of their first-round playoff, Chicago; photos (M)

Stanley Hill's denunciation of New York City's workfare program for welfare recipients ruptures union leader's ties with Mayor Rudolph Giuliani; abrupt change stems from layoff of 905 public-hospital workers, which Hill says was double-cross given his endorsement of Giuliani's re-election last year; photo; Giuliani has responded to protests by removing workfare workers from hospitals; labor historian Daniel Walkowitz says Hill has never shown profound understanding of workface and is trying to save face now (M)