Lt. Gov. Richard Ravitch at the Capitol on Tuesday. His plan includes billions in borrowing and imposes curbs on future spending.
ALBANY — New York could borrow billions of dollars to address its urgent budget shortfall and a financial review board would be established to impose new discipline on future spending under a five-year financial rescue plan that Lt. Gov. Richard Ravitch will present Wednesday.
The plan would also require significant spending cuts and abolish some of Albany’s much-criticized budgeting practices, forcing lawmakers and the governor to account for how they will pay for spending expansions when they are approved.
Mr. Ravitch, who was asked by Gov. David A. Paterson to draw up the blueprint, is seeking to curb the runaway spending that has helped plunge New York into fiscal crisis. Despite the recession and talk of fiscal austerity, state spending this year soared by 10 percent over the previous year’s budget.
The state faces a $9 billion shortfall for the fiscal year that begins April 1 and a $15 billion gap for the following year.
The plan, which requires legislative approval, seeks to address New York’s immediate cash needs by permitting the state to sell bonds to help cover operating expenses. But those bonds would be contingent on the state’s producing a balanced budget, and the newly established board would have the authority to determine whether the budget meets that requirement.
In addition, the plan would limit how much could be borrowed — probably 1 percent or 2 percent of the total budget, so lawmakers do not rely on borrowing to shirk difficult decisions on spending cuts, though any increase in borrowing will be controversial.
It would represent drastic change to how Albany has operated for decades. But the severity of the fiscal problems, and Mr. Ravitch’s stature as one of the leading figures in the rescue of New York City in the 1970s, have legislative leaders and other top state officials examining the proposal seriously.
Even though the plan would take away some authority from lawmakers, Sheldon Silver, the most powerful Democrat in the Legislature, said it would be carefully considered by his colleagues.
“It’s not D.O.A.,” said Mr. Silver, the Assembly speaker. “I think there’s too much respect for Dick Ravitch in that regard, and he’s worked hard to come up with a plan that works.”
Mr. Ravitch declined to provide details on his proposal on Tuesday, but the plan was described by a number of people who had been briefed on it.
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