ALBANY &#8212 As state officials float a plan to borrow money to help reduce the

state&#8217s red ink, they might want to consider the lesson from two decades ago with the

&#8220sale&#8221 of the Attica prison &#8212 the poster child of all fiscal gimmicks.

Under pressure to close a deficit in 1990, the state sold Attica Correctional Facility to

the state&#8217s Urban Development Corp., an authority that is supposed to be charged with

economic-development efforts. The agency then leased the facility back to the state.

How did it work out?

A generation later, the state has so far paid back $344 million on that $200 million loan.

But, like a homeowner desperate for cash and unwilling to cut expenses, the state

refinanced and in some years paid no principal on the Attica borrowing so that today New York

still owes more than $222 million in principal and interest. All that on a borrowing

two-thirds of the way through its 30-year term.

&#8220It is symbolic of fiscal gimmicks used to avoid a more serious question of

controlling spending in another part of the budget,&#8221 State Comptroller Thomas P. DiNapoli

said of the Attica borrowing. This year, New Yorkers will spend $21 million in financing for a

paper transfer that had no practical effect on the operation of the prison.

Today, state officials are again considering a less painful &#8212 though more costly over

the long term &#8212 option to just cutting costs and raising revenues: deficit borrowing. And

just like in 1990, during the administration of Gov. Mario M. Cuomo, and several times since

then, a new possible round of borrowing is already being defended as fiscally sound and with

plenty of built-in controls aimed at defusing critics.

But those controls all have something in common: Anything lawmakers agree to in 2010 does

not have to be followed by lawmakers the following year, or the year after that, or ever.

Faced with the task of cutting popular programs such as education and health care in an

election year, state lawmakers are considering a proposal &#8212 advanced by Lt. Gov. Richard

Ravitch &#8212 to head to the bond market to eliminate some of the $9 billion in red ink

projected for the fiscal year that starts April 1.

Ravitch has declined to discuss his proposal with reporters, and Gov. David A. Paterson,

who appointed Ravitch to the job, Tuesday dismissed the idea of deficit borrowing without some

sort of fiscal discipline like a cap on future spending growth.

Still, legislative leaders, including Assembly Speaker Sheldon Silver, D-Manhattan, who has

been in control of the 150-member house during some of the state&#8217s most prolific

borrowing periods over the last 16 years, are far from ruling out borrowing to close the

deficit.

New York is already awash in borrowing. DiNapoli issued a report Tuesday pointing out that

the state has become the &#8220national example of the imprudent use of borrowing,&#8221 such

as using bond funds to pay operating costs or for things such as pork-barrel spending.

DiNapoli and others warn that New York may be heading down the same path again: borrowing

to avoid attacking what Paterson describes as the state&#8217s structural spending problem.

Paterson said the budget is slated to grow at about 8 percent a year over the coming five

years &#8212 with revenues to pay for the spending projected at just 3 percent annual growth.

The 1990 Attica borrowing may be one of the more obvious backdoor maneuvers &#8212

borrowing without voter approval &#8212 but it was hardly the biggest.

Indeed, DiNapoli said Tuesday, the state has $9.8 billion on the books that officials

borrowed in past years just to close deficits, which is one-sixth the total state-issued debt.

Just to pay off those deficit borrowings from red ink that is just a distant memory,

today&#8217s taxpayers spend $1.1 billion annually.

In 2002, the state borrowed billions against money it was to receive over decades to come

from the big settlement of a lawsuit against the tobacco industry. A decade earlier, it issued

$4.3 billion in long-term debt to stop annual springtime short-term borrowing. And in 2003,

the state took over debt issued to rescue New York City &#8212 from the mid-1970s.

Today, just 7 percent of borrowings are approved by voters, down from 40 percent in 1985,

the comptroller&#8217s office says.

The warnings from DiNapoli are simple: Annual payments for borrowings are one of the

fastest-growing areas of the budget, and they keep coming at a time when revenues are slowing.

He said that it would be a &#8220mistake&#8221 if deficit borrowing were used to delay

confronting the state&#8217s spending problems.

&#8220The bottom line is it can&#8217t be used as an excuse to avoid spending

reductions,&#8221 said Elizabeth Lynam of the Citizens Budget Commission, which Tuesday

released a report showing that each resident of the state would have to pay $3,700 to satisfy

the borrowings &#8212 the fifth-highest per-capita rate in the nation.

Tuesday, Silver talked of some sort of control board being proposed by Ravitch as part of a

borrowing package, but no one envisions it with the power to dictate spending such as control

boards in Erie County and Buffalo have done.

Silver and other lawmakers have rejected Paterson&#8217s calls for a spending cap.

Silver&#8217s counterpart in the Senate, Democratic Conference Leader John L Sampson of

Brooklyn, said he has a &#8220sense of hesitancy&#8221 over deficit borrowing. But many

veteran lawmakers are convinced that the trial balloon floated by Democrats this week will, in

the end, become real.

&#8220The gimmicks always backfire. They always end up costing more, even though

they&#8217re sold to the people as a stopgap solution,&#8221 said Assemblyman James P. Hayes,

R-Amherst.

Paterson kept the door open to borrowing &#8212 if there were some sort of &#8220quantified

spending reduction&#8221 in the form of a cap on future spending growth. After a private

meeting with Senate Republicans, the governor called the Ravitch proposal a

&#8220concept&#8221 to deal with the next five years of projected deficits that total more

than $62 billion.

The governor then said the state might need to borrow to help close the current year&#8217s

deficit for the fiscal year ending in three weeks. That shortfall is expected to total $2.1

billion.

Asked about his borrowing proposal this week, Ravitch said, &#8220I&#8217m not going to

tell you what the contents are.&#8221