Lt. Gov. Richard Ravitch’s 14-page proposal to reform the state’s budgeting process has been shelved temporarily as all eyes focus on closing the yawning budget gap.

But once the Legislature and the governor agree on new spending reductions and revenue generators, the Ravitch plan could re-materialize, as officials find themselves unable to close the deficit without turning to borrowing.

The Paterson administration is likely to insist that any borrowing be done the Ravitch way, according to administration officials, with more restrictions so that any one-shots are filled in quicker and done with greater transparency.

If legislators and the governor agree on the need to borrow, the other pieces of the Ravitch plan will likely be back on the bargaining table.

Ravitch himself has urged the Assembly and Senate against splitting his plan, saying that it needs to be passed in full.

According to several sources, there is currently broad agreement among Democrats on several parts of the plan, especially the need to shift from cash accounting to Generally Accepted Accounting Principles (GAAP) accounting, which forces the government to recognize revenues and expenditures as they happen, and the need to push the start of the state’s fiscal year to July 1 from April 1.

Though 46 other states begin their fiscal years on July 1, the Ravitch plan may run into some resistance, especially from suburban legislators who say such a move would wreak havoc on their school districts, which plan their budgets in May based on projections that come out of Albany.

A fiscal year that begins July 1 would push school districts’ budgeting into the summer months, when they can expect even less oversight and participation than they receive now, according to Frank Mauro of the Fiscal Policy Institute.

“The change in fiscal year is not as clear or as simple as people might think,” he said. “Yes, you would have much more information about tax revenues after April, but it also means school budget votes have to happen in the summer, when people are around less.”

The administration could, however, find some common ground by changing the fiscal year but ensuring that a budget gets enacted earlier.

The Ravitch plan seems set to face greater resistance over its calls to institute a financial review board and to give the governor fiscal emergency powers. When Ravitch presented his plan to closed-door meetings of the legislative caucuses, several inside the room said this issue was the main point of contention.

Carl Kruger, the chair of the Senate Finance Committee, said such a plan was a relic of Ravitch’s earlier work rescuing New York City from the brink of bankruptcy, and was unnecessary in Albany.

“New York State is very solvent, in a way that New York City was not,” he said. “We do not need a financial control board. The prerogative of the Legislature is budgets.”

The board would meet quarterly to ensure that the state is balancing its budget in the ongoing manner that Ravitch proposes, without fancy tricks or gimmicks. Backers of the Ravitch plan say that the board would be a review board, not a control board, and could only make suggestions, performing a similar function as the Congressional Budget Office in Washington.

But even experts that support the Ravitch plan wonder if even the limited authority of the review board goes too far. Across-the-board cuts, they say, could give intransigent officials too much power to derail the budget. If a group of lawmakers, for example, really wanted to cut spending, they could refuse to negotiate in good faith with a governor.

“It’s kind of a nuclear option,” said Iris J. Lav, a senior adviser at the Center on Budget and Policy Priorities. “It probably is too drastic to work for the purposes for which it is intended. A remedy that nobody wants to put into effect means there is no remedy.”

The administration is hoping that an offer to restore to the Legislature other budgetary powers may serve as a negotiating chip. Under the terms of the 2001 Silver v. Pataki lawsuit, an executive can direct how funds that the Legislature appropriates are spent, and the Paterson administration has signaled they would be willing to restore the Legislature’s prerogatives in exchange for passage of the Ravitch plan.

Republicans have signaled that they are unlikely to support any part of the Ravitch plan—“I think the chances that you get 30 Republican votes are slim to none,” said State Sen. John DeFrancisco—but administration officials appear willing to go around them.

“The Republican strategy is just like the Republican strategy in Washington,” said one. “Stand on the sidelines and throw bombs into the proceedings and hope they catch on fire.”

Despite heated words at the outset, Albany insiders expect the Ravitch plan to pass. He has the kind of stature there that forces legislators to take what he says seriously, and the state’s increasingly alarming budget outlook may prod even recalcitrant lawmakers to begin cherry-picking parts of the plan—precisely what Ravitch and others fear.

This has happened before. In 2008, Ravitch unveiled a plan to rescue the Metropolitan Transportation Authority. Lawmakers instituted some of his recommendations, but avoided, for example, tolling the East River bridges. Today, the MTA faces a nearly $800 million shortfall, and long-term structural issues remain unaddressed.

“The plan has to be adopted all or nothing,” says Carol Kellerman, president of the Citizen’s Budget Commission. “But who is to say we won’t just end up with nothing?”

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ABOVE: Lt. Gov. Richard Ravitch has tried to point the way forward for state budgeting, but his plan is meeting resistance. Photo by Andrew Schwartz