CHICAGO, JUNE 19 -- New York Mayor David N. Dinkins (D) today rejected advice from Washington and urged his fellow urban leaders to actively pursue reallocation of a "peace dividend" that he predicted will result from defense spending cuts.

Dinkins's call for increased federal spending for the cities came 24 hours after House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) stunned members of the U.S. Conference of Mayors by bluntly predicting no new federal money will be forthcoming.

Rostenkowski told the mayors that any peace dividend has already been spent on the multibillion-dollar savings and loan bailout. But Dinkins told reporters after his speech today that he rejects Rostenkowski's assessment. "Some of us do not accept that there is no money," he said.

"We, the mayors of America, must send a message to Washington that only after we have educated our young people, only after we have repaired our roads, and only after we heal our sick can we commit to the extravagant bailout of a corrupt system," Dinkins said.

He added that, contrary to Rostenkowski's assertion, the size of the thrift bailout proves that the federal government has the money to spare. Dinkins maintained it is being spent incorrectly.

Referring to the savings and loans as a "sinkhole" that will absorb valuable resources best spent on mass transit, AIDS research, education and drug enforcement, Dinkins called on his colleagues to demand that the money be returned to the cities.

"It's time for the federal government to stop treating American cities as though they were foreign nations seeking a handout, when in fact we are home to more than half of America's population," the New York mayor said.

Dinkins, who has spent considerable energy challenging the Bush administration on its commitment to urban areas, said he will hold a "summit of our cities" in October in New York to gather political and business leaders for further discussion of how to funnel more aid to the cities.

Dinkins also renewed his call for a more equitable 1990 census count, urging that statistical adjustments be made for undercounts in poor areas. At a meeting of the mayors' task force on the census, Dinkins and a dozen colleagues said they plan to travel to Washington to plead their case to Commerce Secretary Robert A. Mosbacher.

On June 7, a federal court rejected New York City's challenge of Census Bureau's guidelines and allowed the government to decide whether statistical adjustments to the final count will be necessary. City leaders and others have argued that an accurate count can be made only by factoring in an estimate of those households that will go uncounted.

Houston Mayor Kathy Whitmire (D), the president of the mayors' conference, dismissed the Census Bureau's guidelines for determining whether a statistical adjustment is necessary. "The guidelines just don't have any bearing on reality," she said.

Yesterday, smaller cities joined in the call for an adjusted count. "Our worst fears have been realized," said Mayor Jimmy Kemp of Meridian, Miss. "We didn't feel we were going to get a good, accurate count. What {Dinkins} is finding out in the largest urban area of the United States is the same thing we're finding out in a rural area: that minorities . . . are falling through the cracks as far as the census is concerned."

Dinkins said the mayors hope to convince Mosbacher, whose department oversees the census, that the current method for counting population "is so basically unfair" that the federal government should make a statistical adjustment without the need for a lawsuit.

"I don't think there is anything more important to cities for the next 10 years than to have an accurate census count," said Philadelphia Mayor W. Wilson Goode (D). "This is money and votes -- two things we know a lot about as mayors."