ALBANY, N.Y. (AP) - The former lieutenant governor who helped New York City avoid bankruptcy in the 1970s is warning that cities around the U.S. can expect more fiscal troubles in the years ahead.
Richard Ravitch served as lieutenant governor under former Gov. David Paterson and has spent years studying the financial health of governments. He was in Albany this week to address students at Albany Law School and discuss his new memoir: “So Much to Do: A Full Life of Business, Politics, and Confronting Fiscal Crises.”
“I think you’re going to see a lot more fiscal stress,” Ravitch said during a meeting with reporters Wednesday at the Statehouse.
A combination of mounting debt, rising pension and health care costs and politicians who won’t make tough decisions are to blame for the problems facing cities like Detroit, now in bankruptcy, he said. Ravitch has been interviewed by the judge handling the case as a potential expert adviser.
“The incentives for people in politics to borrow and to sell assets to balance budgets are overwhelming,” he said. “If people had stopped lending Detroit money years ago it would have been a hell of a lot easier to solve it.”
Ravitch said federal leaders haven’t done enough to consider how their decisions impact the finances of states and local governments. The resulting “fiscal squeeze” is forcing many governments to reduce important investments in education and roads, bridges and other infrastructure.
The 80-year-old New York native has served as the head of the Metropolitan Transportation Authority and a negotiator in Major League Baseball labor talks. He played a critical role in resolving the fiscal crisis that threatened New York City in 1975. Paterson tapped Ravitch to serve as lieutenant governor in 2008.
He told law students that the fiscal challenges facing local governments will demand difficult decisions relating to taxes and service cuts.
“The only way this problem is going to be solved is if smart young people choose to devote their lives to public service,” he told students at Albany Law School. “I just hope the political leadership of this country will take this issue on.”
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