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Long IslandColumnistsDan Janison

Borrowing in Ravitch plan draws criticism

New York Gov. David A. Paterson, left, chats

New York Gov. David A. Paterson, left, chats with Lt. Gov. Richard Ravitch at a budget presentation in Albany. (Jan. 19, 2010) Photo Credit: AP

When they hail Lt. Gov. Richard Ravitch as a fiscal Mr. Fixit, his fans in civic circles cite his role in wrestling with crises of the 1970s and '80s. At their most overdone, the tributes to the 76-year-old retired developer make it sound as if he could star in a Broadway revival called "When Wise Men Ruled New York."

But the last run of a Ravitch proposal dates back only a year, when he pushed for a plan to set straight the Metropolitan Transportation Authority. Like the five-year prescription for the state he released last week, Ravitch's MTA blueprint had several interwoven parts.

And - as looks likely with his latest proposal - lawmakers chopped the MTA plan into its constituent parts. The Democratic-run State Senate rejected new fees on motorists entering Manhattan - intended to help minimize fare hikes and service cuts. The part of the plan that won approval taxed payrolls on MTA-region businesses, with an impact that's still being debated.

Even though he's No. 2 in a sputtering administration, Ravitch still seems to engender respect around the Capitol. As in the MTA episode, Assembly Speaker Sheldon Silver, for one, is making positive noises, at least at the outset.

But the "B" word has raised red flags from critics - "B" as in borrowing. Under the Ravitch plan, bonds worth up to $2 billion per year to help fill operating deficits in the short term would be permitted early in the five-year plan. That is, borrowing would be permitted only if cuts and other tough accounting measures, overseen by an empowered review board, are taken to correct New York's chronic multibillion-dollar gap between spending and revenues.

Gov. David A. Paterson was defending this point last Monday, before the Ravitch plan was even released. "His discussion of borrowing has been taken completely out of context," Paterson said. "Short-term borrowing does take place in government all the time. But this is a limit for how much you can borrow."

Critics such as Suffolk Executive Steve Levy, a maybe-candidate for governor who backs a review board, slammed the plan. "They are blowing a unique opportunity to mandate needed spending controls and are instead merely providing cover for a huge borrowing," Levy said through a spokeswoman.

Efforts in the 1970s to pull New York City back from the brink of bankruptcy - in part through appointed fiscal monitors - comes up in the new Ravitch report. "New York City faced a grave fiscal crisis," it says. "In response, the state put in place new financial rules for the city, not unlike some of the rules that this report proposes for the state itself. These new rules are one reason for the remarkable recovery the city has made. "

But it is one thing for the state to step in and impose restrictions to pull local governments out of distress. It is quite another for state elected leaders to cede authority, as Ravitch proposes. Ravitch seems to acknowledge this challenge in the 19-page report when he states: "What we did for New York City we can do for ourselves."

What goes unsaid is that "can do" and "will do" are different things.


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