ALBANY — It was early 2002. Wall Street’s profits had collapsed after the 9/11 attacks, unemployment was on the rise and tax revenue was plummeting.

In Albany, though, there was little action. Gov. George E. Pataki — facing re-election, along with the entire Legislature — brushed aside warnings later that year from a fellow Republican, Joseph L. Bruno, the Senate majority leader, that the state budget gap was far worse than the administration had acknowledged.

Not until early 2003 did the administration concede that there was an $11.5 billion shortfall, and the results were painful and acrimonious: months of feuding between the governor and the Legislature over spending cuts and an income tax increase.

Budget experts say the state’s current fiscal problems are not yet as severe as in 2003, but they warn that if Albany does not move quickly and aggressively to address them, the state could face the same sort of dire choices it confronted five years ago.

This week, Gov. David A. Paterson seemed to embrace that message. On Tuesday, he declared a state fiscal crisis and said he would order the Legislature into session next month to address a projected $7 billion budget gap for the coming two years. On Wednesday, he announced plans to freeze state hiring immediately and to reduce agency spending by 7 percent, on top of a 3.35 percent cut he implemented earlier this year. He also said he would consider long-term leases of state assets to raise revenue.

He is drawing lessons from what happened in 2002 and 2003, he said in his remarks Wednesday.

“I objected to what I thought was a budget projection that was $12 billion off and the inability of our government at that time to tell us where we actually stand,” he said. “The only relief I feel is that I can clear my conscience and that of state government that we’re telling the public where it is and where we stand.”

The Paterson administration is clearly considering the long shadow cast over New York by the continuing downturn on Wall Street, which accounts for one-fifth of the state’s revenue. Bear Stearns nearly collapsed earlier this year, and once seemingly impregnable investment firms appear to be hemorrhaging money. Merrill Lynch and other investment banks have had to reduce the value of assets on their books by tens of billions of dollars in the last year.

Perhaps most troubling is that the effect of the credit crisis that began in the subprime mortgage market has yet to come into clear focus.

So far, the Legislature has reacted coolly to the governor’s warnings. It does so at the state’s peril, analysts say, and they have praised Mr. Paterson for trying to raise a sense of urgency.

“He’s looking to break with the default pattern,” said Edmund J. McMahon, the director of the Empire Center for Public Policy, a conservative-leaning research group.

That pattern, he said, has too often been “denial followed by much talk about cuts, but in reality, mostly gimmickry, borrowing, one-shots and tax increases.” One of the most notable of those gimmicks came in the fiscal crisis of the early 1990s, when Mario M. Cuomo’s administration was roundly criticized for selling Attica prison to one of the state’s own ostensibly independent public authorities for $200 million.

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The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.