During a break between radio interviews this morning, Lt. Gov. Richard Ravitch spoke to reporters for a few minutes about the state budget. He said it would be difficult to transition this year from the current April 1 through May 31 fiscal year to a July 1 through June 30 fiscal year, which he proposed last week.
The five-year budgeting plan Ravitch unveiled last week would rely heavily on borrowing to break the expected budget deficit of more than $9 billion in 2010-11.
Gov. David Paterson has said the budget, due by April 1, likely would be late.
While lawmakers have been meeting without Paterson’s administration on the budget, it’s not “realistically possible to do a legislative budget without the governor,” Ravitch said. “No, I don’t think there’s a chance that’ll happen.”
Meanwhile, Citizens Budget Commission President Carol Kellerman said the group would normally oppose any borrowing for operating expenses, but his plan “has the potential to impose much needed long-term fiscal discipline and achieve structural reform. The plan … could have substantial benefits which may be worth the price in additional borrowing and debt service.”
Aspects of the Ravitch proposal the CBC likes include:
— The requirement for the state to balance its budget according to Generally Accepted Accounting Principles. The cash basis currently used for the budget “is manipuated too easily and too often.” It has allowed the state to postpone the recognition of expenses while accelerating the recognition of revenue, it has created the appearance of balanced budgets.
— The requirement to develop a five-year plan for a balanced budget and sustain the balance on a recurring basis through an ongoing process or rolling five-year plans. It will be difficult, if not impossible, to eliminate structural deficits without huge spending cuts, according to the group.
— Allowing the state to make limited transitional borrowing through well-secured bonds. Current “involuntary loans” and other “gimmicks” that help the state meet its cash needs would be replaced in the first three years through bonds secured by personal income-tax revenues.
The CBC cautioned that the borrowing would have to be limited and structured. The group thinks borrowing for operating purposes should be avoided, but it should be allowed, and the money repaid as soon as possible, if a new planning process shows that efforts to cut spending can’t save enough to close short-term budget gaps. The group said details on how new controls would work are needed. Otherwise, the plan could become an excuse to avoid tough fiscal decisions.