There are those who say that borrowing is a foregone conclusion as Albany timorously considers a 2010-11 budget deficit of more than $9 billion. Knowing Albany, those people could be correct. But it's not right.
New York has a spending problem that is reflected in an already intolerable debt load. Getting out of trouble by getting further into trouble is a risky bet, whatever the assurances.
The prospect of significant borrowing snapped into focus last week when Lt. Gov. Richard Ravitch put forth a plan that would authorize the state to borrow $6 billion over three years in exchange for several concessions that would make lawmakers swallow hard, principally the creation of an oversight board -- but only an advisory one -- that would issue a quarterly review of whether the budget was in balance. If the budget was out of balance, lawmakers would have two weeks to negotiate changes, after which the governor would be empowered to cut spending across the board for the current year.
A useful component of Ravitch's plan is to require the state to use what are known as General Accepted Accounting Principals, which would require the state to log expenses when they are incurred, not when they come due, and to limit the amount of money that can be borrowed in any year to help pay for operating expenses.
But what is missing -- and is urgently needed -- is a spending cap that would keep a lid on what has been the explosive and irresponsible growth in state expenses. For proof of the need, look back no further than the current year budget. Facing a historic recession and a severe restriction in revenue, lawmaker and Gov. David A. Paterson nonetheless adopted a spending plan that increased state spending by 10 percent.
That's the kind of heedless governance that has pushed New York and its taxpayers into the ditch and, given the routines of New York politics and the irrelevance with which lawmakers view voters, there's no reason to think it will change without the two-by-four of a spending cap.
Fortunately, Paterson has said he wants a spending cap and won't permit borrowing without "some sort of restriction on spending."
That's the place to start. Lawmakers need to cut the budget and agree to accept a spending cap to compensate for the discipline they lack. Without that kind of agreement, any new borrowing is just pouring gasoline on the fire that is already consuming this state's hopes for new prosperity.