As Mayor Bloomberg and Governor Pataki finished up their budget negotiations this spring, a group of advocates for the homeless started lobbying for cash from next year’s pot, insisting their plan will actually save the government money.

A coalition of 20 nonprofit groups asked the state and city to budget about $1 billion for the creation of 9,000 apartments with supportive services–from job training to substance abuse counseling–for homeless adults with mental disabilities as well as for homeless families.

Citing the rise in the city’s adult shelter population–about 40 percent of which is estimated to suffer from mental illness–the campaign’s coordinator, Steven Coe of Community Access, says, “We can’t wait for another crisis; we need to start planning today.”

Their proposal, called New York/New York III, would expand a program that has funded the creation of 5,115 apartments for homeless people with mental illness since 1990, when Mayor David Dinkins and Governor Mario Cuomo signed the New York/New York I Agreement. That first deal allocated $194.7 million for 3,615 apartments that were built and run by nonprofit service groups.

The Pataki and Giuliani administrations didn’t take the program any further, until tragedy struck: In January 1999, Andrew Goldstein, a homeless man suffering from schizophrenia, shoved Kendra Webdale in front of a subway, killing her almost instantly. Three months later, the governor and mayor signed a second New York/New York agreement for another 1,500 apartments. Some of these homes are still under construction, but, fearing the shelter population will continue to grow–the shelters for single adults are at their fullest since 1990, housing an average of 7,914 adults a night as of March–advocates hope to get more apartments funded. They have also asked for 1,500 supportive apartments for homeless families.

While they were not able to get any funding allotted in the state budget passed in May, the campaigners are hopeful for next year. “They have not directly said no to us,” says Shelly Nortz of the Coalition for the Homeless. Her main argument: It would actually save the city and state money in the end: It costs $40,500 a year to keep someone in a psychiatric institution, but only $16,300 a year in supportive housing.