Lt. Governor Dick Ravitch today released his plan to bring long-term fiscal stability to Albany, complete with its expected contents: some borrowing allowed, with a new structure to control spending.
A bit more specifically, it allows short-term bond issuance so that a gaping budget hole need not be filled this year, and it installs new controls on budgeting with a semi-independent board that must approve the budget and see that spending and revenue are generally in line over a five-year horizon. (This has been the problem of Albany and other governments: spending goes up faster than revenues, so five years out, the state has generally tended to face big gaps).
Underlying this plan is a very big implication: that Ravitch believes Albany cannot bridge the $9 billion gap in the budget this year, offering up the heretofore prohibited practice of borrowing to fill the operating budget.
So why is he doing this?
Perhaps he truly does believe that the state cannot ever come to an agreement on the budget, given the constant impasse in Albany, particularly in the Senate. True, one or another key senator seems to have lined up opposing every cut and new tax in the governor’s proposed budget, and it took the Senate nearly half a year to vote on his relatively painless plan-and accompanying new tax-to help fund the M.T.A.
But New York has had big gaps in the past that have been closed, and other states other states have gaps that are far more tremendous. Of a $133 billion budget, $9 billion is just seven percent. Compare that to New Jersey, which is $11 billion short on a $30 billion or so budget, or Illinois ($13 on a $55 billion budget). And even New York faces much greater holes in its budget in coming years (next year there is a projected gap of more than $14 billion).
A seemingly more likely possibility is that Ravitch sees this as his one window to reform Albany’s budgeting practices, and by tying it to the current year’s budget is his one and only chance at getting any of his ideas passed. Thus, in this tough election year, he is offering a trade for the Legislature, which presumably wants nothing less than an embarrassing long-running budget impasse. He offers the legislators the ability to get out of their responsibility to balance this year’s budget, and in exchange they must give up certain budgetary powers and controls that they otherwise would never be willing to cede.
As for the likelihood of passage, it seems a bit early to judge. Though it certainly could get confusing given that Mr. Ravitch’s plan and the governor’s proposed budget are mutually exclusive.