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Mayor Rudolph W. Giuliani appointed Joseph J. Lhota yesterday as his latest budget director, filling the influential position for the third time in less than two years.

Mr. Lhota, 41, the city's Commissioner of Finance, replaces Marc V. Shaw, who announced on Monday that he would step down after only 11 months as budget director to become the chief executive of the Metropolitan Transportation Authority. Mr. Shaw had replaced Abraham M. Lackman, who resigned in January to become a senior aide to the Republicans of the State Senate.

The turnover in directors of the Mayor's Office of Management and Budget has been unusual in an administration that has kept an otherwise relatively stable cadre of deputies, commissioners and other senior aides. It also raises questions about the continuity of fiscal planning when the Mayor still faces sizable gaps in the city's $31 billion budget this year and in the years ahead and the very real prospect of deeper cuts in state and Federal aid.

Mr. Giuliani, announcing the appointment at City Hall, dismissed suggestions there might be tumult in the budget office, saying mockingly, "It's total chaos."

The Mayor then said that Mr. Lhota's experience in the administration would insure a smooth transition and that the projected shortfalls facing the city's budgets were not as severe as they were in the first two years of Mr. Giuliani's tenure.

"It will be very smooth, aided by the fact that Joe is already a very integral part of city government, understands it, understands the initiatives," Mr. Giuliani said. "This will be as smooth as the last transition."

Mr. Giuliani made his remarks only an hour before Mr. Shaw, in one of his final acts as budget director, released details of a modification to the city's $31 billion budget that showed growing gaps that will require deeper cuts in agencies and on Medicaid and welfare.

As Commissioner of Finance, Mr. Lhota oversaw the city's collection of taxes and fees, which total about $18 billion a year. Mr. Lhota also oversaw the consolidation of the Sheriff's Office into the Department of Finance and efforts to consolidate licensing and collection functions.

The budget director, by contrast, is responsible for drafting the city's budget, turning the Mayor's fiscal and political priorities into a balanced ledger.

"It's not exactly the most rewarding job in government," Mr. Giuliani said. "It's probably the one in which you have to say no the most often -- except for the Mayor."

Before joining the administration in 1994, first as chief of staff to Deputy Mayor John S. Dyson, Mr. Lhota worked as an investment banker, most recently as director of public finance at CS First Boston Corporation.

Graph/Photo: "PROFILE: Joseph J. Lhota" Hometown: Born in the Bronx, now lives in Brooklyn Heights. Education: St. John the Baptist High School, West Islip, L.I.; B.S., accounting, Georgetown University, 1976; M.B.A., Harvard University, 1980. Career: Accountant at Arthur Andersen & Company, 1976-78; managing director of municipal securities at Paine Webber Inc., 1980-92; director of public finance at CS First Boston Corporation, 1992-94; chief of staff to Deputy Mayor John S. Dyson; City Commissioner of Finance, 1994-95. Salary: $110,000. Family: Married seven years to Tamra Roberts Lhota; daughter, Kathryn, 4. Hobbies: Reading newspapers and spy novels.


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