Albany, NY – Lieutenant Governor Richard Ravitch formally presented his five year plan to bail out the state, saying the proposal is much more than just authorization to borrow more money.
The Lieutenant Governor's 5 year bail out plan would allow the state to borrow up to $2 billion dollars a year for the next several years, and would set up a financial control board to ensure that lawmakers don't spend more than the state is taking in. Ravitch says his idea would remedy the chronic budget shortfalls that have plagued the state for years, and which he says could eventually rival the near bankruptcy of New York City in the 1970's and the financial distress following the September 11, 2001 terrorist attacks.
"The real tragedy of running from crisis to crisis, year to year, building up deficits is that we can afford less and less to invest in education," said Ravitch, as well as economic development.
The control board proposed by Ravitch could not, under the state's constitution, be an actual financial control board, but it would be permitted to review budgets agreed to by the governor and the legislature. If the board finds that the budget is not in balance, or unsustainable, the governor would be given new powers to make adjustments.
And while the legislature would have to give up some of it's budget making authority to the executive branch, the governor would also give up some powers, as well. The plan would reverse a Court of Appeals decision in the Pataki v Silver case, which allowed a governor to insert policy changing language into the budget, and forbade the legislature from altering it. Ravitch says that ruling has led to increased and unnecessary tensions between the two branches of government.
Overall, the plan is similar to a solution that Ravitch presided over to bail out New York City over thirty years ago. And Ravitch says he believes it can work just as well, today.
"We came out of it as a stronger city," Ravitch said. "New York's prosperity has been extraordinary."
But Ravitch says, just like New York City then, the state will still have to undergo deep and painful spending cuts.
The Lieutenant Governor's plan would also change the beginning of the fiscal year from April 1 to July 1, and Ravitch says that could be accomplished this year, as long as state lawmakers come up with some kind of plan for keeping New York afloat for the three month period from the end of the present fiscal year until the new calendar begins. The legislature might need that time to come up with a spending plan. The Lieutenant Governor, contradicting Governor David Paterson somewhat, says he does not think it's feasible to close the current $9 and half billion dollar gap through spending cuts.
"I believe it to be a political impossibility, given the varying dispositions of the members of the legislature," said Ravitch, who said he thinks the cuts would go too far to maintain services that New Yorkers expect.
The Lieutenant governor will be presenting his plan to Democrats and Republicans in the legislature, in separate meetings, but two state lawmakers who attended the briefing said they were open to the idea.
Assemblyman Richard Brodsky, a Westchester Democrat, says it's the "first serious, coherent structural plan" he's heard to reverse the state's fiscal crisis.
Senator Diane Savino, a Democrat from Staten Island, said it might break the endless cycle of budget dysfunction.
"They say the definition of insanity is doing the same thing over and over and expecting a different result," said Savino. "If we continue to handle the state budget the way we are, we're going to be revisiting this, doing this budget dance every year."
EJ McMahon, with the conservative think tank The Empire Center, says while he's not totally opposed to borrowing under the right conditions, he thinks Ravitch's plan allows the legislature to shirk their responsibilities.
"Without intending to, he gave them an enormous set of alibis today," said McMahon. "He let them off the hook."
Ravitch, who is not running for any elected office, says his plan could benefit whoever is the next Governor, come January.
"If something like this is not in place, that governor is going to face a minimum $15 billion dollar deficit, with 90 days to work out a budget with the legislature," Ravitch said. "And we will have lost nine months."
Ravitch has met recently with the presumptive Democratic nominee for governor, State Attorney General Andrew Cuomo. Ravitch previously said he discussed budget matters with Cuomo, but now says he did not specifically bring up his borrowing