April 9, 2001

Pittsburgh, which re-invented itself as home for many high technology companies and dot-com start-ups, is feeling effects of economic slowdown; in Pittsburgh, and in cities like it around country, business executives are cutting back; their curtailment of investment spending and expansion plans is contributing to what now appears to be nationwide slide toward recession; Labor Dept reports employers shed 86,000 jobs in March, largest drop for one month since Nov 1991; home construction and auto sales remain solid, and job growth, while slowing, has not yet braked enough to push jobless rate above still low 4.3 percent; it is lag in capital spending that is pulling down rest of economy; Pittsburgh, like other cities that diversified and thrived in 1990's, shedding their reliance on single industry, are entering their first hard times in their new garb; city must continually add small, vigorous enterprises to sustain prosperity, and momentum is fading; photo; graphs (M)

Efforts to Enforce Tax Law Have Declined at I.R.S. Broad enforcement efforts by the Internal Revenue Service against individual taxpayers have fallen by half or more since the early 1990's, according to new data from the Justice Department and the I.R.S. The tax agency has become much less likely to question those with unreported income, to take taxpayers to court or to seize their property. The I.R.S. filed 641 civil cases against recalcitrant taxpayers last year, for example, down from 2,519 in 1992. [Page C2.]

Schools Chancellor Harold O Levy's suffers some setbacks after 15 months in office; parents have rejected his proposal to privatize five failing schools, teachers' union has joined City Hall in ridiculing record size of his recent budget proposal, and Ninfa Segarra, longtime ally of Mayor Rudolph Giuliani and critics of Levy's managerial style, has been elected president of Board of Education; Levy remains optimistic, at least publicly, citing his success in starting fast-track program for certifying teachers, new performance standards for superintendents and shrinking of central board bureaucracy (M)

Runoff Likely in Peru Alejandro Toledo, who escaped poverty and led the fight that caused Peru's former president to resign, was ahead in the presidential vote, but a runoff vote was likely. PAGE A6 Vietnam Bodies Recovered Searchers recovered the bodies of seven Americans and nine Vietnamese killed in a helicopter crash as they searched for Americans missing from the Vietnam War. PAGE A6

Ben Brantley reviews Steppenwolf Theater Co's production of Dale Wasserman's play One Flew Over the Cuckoo's Nest, directed by Terry Kinney and starring Gary Sinise; photo (M)