New York Governor David Paterson on Tuesday said the multi-year deficit-closing plan his lieutenant governor is devising might seek to give governors extra authority to cut over-spending.

New York's financial situation will worsen over the next five years because spending is expected to rise 7.5 percent but revenues will only climb 3 percent, Paterson told reporters.

That would put us at $65 billion in the hole, he said.

Lieutenant Governor Richard Ravitch has been charged with finding a long-term solution to the state's fiscal crisis, and Paterson said one possibility was creating an independent board to review whether a past budget is in compliance with the state's fiscal situation.

New York's deficit in the new budget that starts on April 1 tops $9 billion, but Paterson would need the legislature to approve the extra budget powers he is considering.

If the budget was not in compliance, the governor would be granted powers that no governor in New York has ever had before in the sense, to have an executive authority, which I was looking for in the deficit reduction plan, to make a final decision, Paterson said.

Paterson is refocusing on the budget amid questions about his ability to lead as he faces state and federal probes into whether he tried to quash a domestic violence charge against a top aide, unlawfully accepted World Series tickets, and gave too much weight to a political ally in awarding a slots machine contract.

Most New Yorkers think he should stay in office though they do not think he acted ethically or can a good job, a new poll said on Tuesday.

On Monday, Paterson said any deficit borrowing included in Ravitch's plan would have to be accompanied by spending caps.

Democratic Assembly Speaker Sheldon Silver, who was a given a preliminary outline of Ravitch's plan, told reporters that the basic principle was to achieve a balanced budget and to use borrowing with a hammer.

But the borrowing would be for today's expenditures, Silver said. Credit analysts and some politicians, including Mayor Michael Bloomberg, prefer cutting spending to issuing debt to pay for short-term or operating expenses, saying that strategy just mortgages the futures.

Silver said his conference will analyze the deficit borrowing and whether it should give up some control over the budget to an independent board.

A spokesman for the Senate Democratic majority declined comment on Ravitch's plan until it had been fully reviewed.

(Reporting by Elizabeth Flood Morrow in Albany; Additional reporting by Joan Gralla; Editing by Leslie Adler)

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