Ill-conceived plan

New Yorkers have been down the road Lt. Gov. Richard Ravitch would take us to solve New York's fiscal problems. It did not work then and will not work now. That is the message from Edmund J. McMahon, a highly respected analyst and observer of state politics.

Mr. McMahon, in a Saturday Wall Street Journal column, warns against borrowing another $6 billion to bail out the state as Gov. David A. Paterson and the Legislature struggle to close a $9 billion deficit for this fiscal year.

"Like a drunk tempted to go on one more binge at a stressful moment, New York state may soon reach for the debt bottle in the face of mounting deficits. If it does, taxpayers will feel the hangover for a generation," he wrote.

Mr. McMahon, director of the Manhattan Institute's Empire Center for New York State Policy, noted that the state "has spent the last two decades veering from huge surpluses to occasional big deficits, patched when necessary with borrowing and temporary revenues. As a result, roughly $10 billion of the $60 billion in currently outstanding state-supported debt can be attributed to past deficit borrowings."

Lt. Gov. Ravitch's plan to restore "structural balance" would also move the start of the fiscal year to July 1 as in most other states and establish an independent review board to determine if the budget is balanced. A balanced budget can be achieved in many ways. The focus, as Mr. McMahon sees it, should be curbing spending with a "limited borrowing plan hardwired to firm and specific spending and debt caps."

In doing so, lawmakers will run up against powerful special-interest constituencies, especially labor unions. One tool available to the state is freezing public-sector wages in a fiscal emergency.

The lieutenant governor's proposal, Mr. McMahon wrote, paves the way for exerting the temporary personal income tax hike enacted last year, which will "suppress the economic growth the state desperately needs to grow its way out of its current problems."

Mr. McMahon noted that the state cannot go bankrupt by federal law. But he said state leaders have "all the constitutional tools they need to solve their problems — if they can muster the will to do so."

That will is lacking in Albany today, which makes borrowing so appealing to lawmakers.