ALBANY — Lt. Gov. Richard Ravitch on Wednesday proposed a five-year plan to control the state government's notorious overspending, but lawmakers who would have to legislate the changes were hesitant to embrace them.
The proposal includes borrowing up to $2 billion a year for the next three years to right the state's finances under strict rules aimed at avoiding more tax increases by forcing politically difficult spending discipline. It also would create an independent financial review board. Under law, the board would do quarterly reviews of whether spending remained in line with revenues. If the budget went out of balance, the governor could cut spending without the Legislature's approval if the executive and legislative branches failed to agree.
Failure to act now, Ravitch said, could result in "horrendous" taxes, too little revenue to cover basic services and bankruptcy. Debt payments now total $5.7 billion on a $130 billion budget, which includes some of the biggest tax increases in state history.
Ravitch said his proposal would eliminate the state's projected deficits over the next five years, which could total $60 billion without action.
Lawmakers, whose ability to protect school aid and other spending critical to the state's powerful special interests could be weakened, were cautious of the proposals.
"I hate to abdicate my legislative responsibility to the board, but I have an open mind," said Senate Conference Leader John Sampson, a Brooklyn Democrat.
Sampson also said he isn't yet supporting the idea of borrowing to avoid difficult choices on spending cuts to contend with a projected $9 billion deficit in the budget due April 1.
Democratic Assemblyman Richard Brodsky, who attended Ravitch's briefing, said more time is needed to examine the proposal. He argued the only power the Legislature would give up, it appears now, is the power anyone gives up when borrowing money. He said the state would be able to borrow money short term but the debts would be in default if overspending unbalanced the budget.
Brodsky said the proposal by Ravitch, well respected in the Legislature, is practical.
"Whether it's the right thing to do needs to be tested," Brodsky added.
Ravitch conceded borrowing "is never a good way of solving operating budget deficits."
"One of the major reasons (New York City) almost went broke in 1975 is that the city had been using the capital budget to cover operating deficits," he said. "But I also know that borrowing on a short-term basis was an essential tool to get us out of the mess we were in 1975."
His plan, though, might not have an advocate strong enough to make it law.
Ravitch's term ends Dec. 31, and Gov. David Paterson, who assigned the task to him, faces accusations that threaten his job and could further limit his influence on the Legislature.
The plan also doesn't include Paterson's preference for a spending cap, which had previously been rejected by lawmakers.
Ravitch argued that limiting annual spending growth would allow additional unaffordable spending, because current levels are bloated by billions of dollars in federal stimulus funds that end in December.
Paterson said the state needs a spending plan the same way households do.
"They've got to set up a plan, a way in which there will be enforcement to what would be a relationship between spending and revenue, just like you would do in your own household," he said during a Manhattan press event.
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