In an op-ed in the Wall St. Journal, E.J. McMahon takes a closer look at the Lt. Gov’s proposal to borrow $6 billion over the next three years and a possible three-month extension of the fiscal year that ends March 31 and sees little help in it for New York.

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.

The stress is real. State officials need to close a looming deficit of $9 billion for the current fiscal year, which begins on April 1. That budget gap is more than $1.6 billion higher than the estimate Gov. David Paterson presented in his original fiscal year 2010-2011 budget proposal, in January. Projected deficits over the next five years now add up to $43 billion.

While the crisis mounted, however, inaction has been the rule in Albany. Like their counterparts in Sacramento, Calif., or Trenton, N.J., New York lawmakers have been paralyzed, feeling themselves beholden to various spending constituencies, especially labor unions. More lately the political class has been transfixed by the travails of Mr. Paterson.

The governor recently abandoned his election campaign and is now barely hanging onto office. He faces allegations that he improperly interfered in a domestic violence case involving a top aide, and that he lied under oath when asked how he landed $6,000 worth of complimentary World Series tickets. No matter how long Mr. Paterson survives in office, his political credibility is irretrievably damaged.

Enter Lt. Gov. Richard Ravitch, the 76-year-old New York City developer, financier, labor negotiator and onetime transit czar whose appointment by Mr. Paterson last year to the No. 2 slot added gravitas to an administration sorely in need of it. The governor assigned Mr. Ravitch to study potential long-term solutions to the fiscal crisis.

On Wednesday Mr. Ravitch proposed a five-year plan for restoring “structural balance” to the state budget. The proposal includes borrowing $6 billion over the next three years and a possible three-month extension of the fiscal year that ends March 31. In return, Mr. Ravitch wants the Legislature to shift the fiscal year start from April 1 to July 1, matching the norm in other states, and to transform the annual cash-basis budget to an accrual-based, long-term financial plan. He also wants the governor to have the power to impound spending if, in any given quarter, the plan is found to be out of balance by an “independent” Financial Review Board. Most of these reforms mimic the fiscal rules that now apply to New York City.

Mr. Ravitch’s reputation was built on the supporting role he played in engineering New York City’s recovery from its fiscal crisis of the mid-1970s. However, his attempt to apply the 1970s template to the 21st century state crisis, while clearly well-intentioned, is off the mark. For example, Mr. Ravitch’s desire to superimpose a Financial Review Board on the existing budget process—as opposed to an outright grant of impoundment power to the governor—hearkens back to the Financial Control Board created to oversee the earlier state bailout of New York City.”

To read the rest of the story click here.