It seemed unlikely at the time that Mayor Bloomberg believed his own claim last week that the city’s present financial problems could be as bad or even worse than those of the 1970s. It seemed more likely that he made the concession as a way of bracing New Yorkers for the tax hikes that he apparently sees as the corrective the city’s economy needs. We say this because the mayor has yet to take any of the steps one would expect in the face of a true crisis, steps including layoffs, tougher bargains with municipal unions, and cutting taxes to stimulate the private sector economy. His 7.5% across-the-board cut to city agencies is insufficient and suggests an inability or disinclination to prioritize. Governor Pataki, too, seems eager to avoid all talk of economic problems until after the election. His challenger, State Comptroller H. Carl McCall, has criticized the governor but has failed to offer any policy prescription of his own.

Yesterday brought more bad news. Mr. McCall issued a report on the state’s revenues and expenditures stating that revenue over the first six months of this fiscal year is down 14% from the same period last year. This means intake is far below what this year’s budget anticipates, while spending is up 2%. The comptroller also announced that the state is projected to have to pay $965 million next year into the pension fund, of which Mr. McCall is the sole trustee. This is a seven fold increase from the $138 million the state is anticipating contributing to the pension fund this year.

Add to these Mr. Bloomberg’s statement on Tuesday that “In a year or so, pension costs to the city are going to go up by a billion dollars each year for the foreseeable future,” and it becomes clear that the city and state’s respective fiscal crises are no longer looming. They are here. The pension system already lost 8% of its value last fiscal year, and this additional billion dollars a year represents a 20% increase to an already formidable revenue gap. The city might start to heal itself, while there may still be time, by cutting the bloated education budget (since the school control deal includes a formula for school spending by the city predicated on this year’s spending, such cuts would generate recurrent savings), selling off city property, lowering taxes, and otherwise reducing the scope of government. For all the headway the city has made, the 1970s haven’t felt this close in a long time — and after the elections may be too late to take action.