Lieutenant Governor Richard Ravitch is set to present a five-year financial-rescue plan Wednesday in which he will propose that New York borrow billions of dollars to address its current budget shortfall, the Times says. Additionally, a financial-review board would be set up in the plan to “impose new discipline on future spending.” Ravitch, considered “one of the leading figures in the rescue of New York City in the 1970s,” was asked by Governor Paterson to draw up the blueprint.
“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,” the Times explains.
The state’s financial situation is an utter disaster: Spending has risen by 10 percent over last year’s budget, and the state is looking at a $9 billion shortfall for this fiscal year and then a $15 billion gap for the subsequent year.