“Like a runaway train, New York’s budget is in danger of running completely off the rails,” according to the analysis by the Empire Center, a conservative Albany-based think tank.

The wellspring of New York’s economy is the financial sector, which nearly ran aground last year, though some banks and brokerages have resumed making money surprisingly swiftly.

Most of the state’s current $3.2 billion deficit stems from falling tax collections, the report said. But it also cited the state’s recent string of billions of dollars of new spending.

Just two areas — school aid and Medicaid, the federal-state health plan for the poor — account for two-thirds of the budget, the report said, recommending a 7.5 percent cut in public school aid and caps on aid to municipalities and property tax relief,

With one in four New Yorkers expected to get Medicaid by 2013, the report also urged capping home care, relying more on managed care, and cutting hospital and nursing home payments.

Despite the recession, welfare grants should be withheld from people who flunk work requirements, “personal needs” payments should be trimmed and increases delayed, it said.

Though Lieutenant Governor Richard Ravitch frowns on privatizing, as investors often want 20 percent returns, the report urged this strategy for the state’s three ski resorts, 27 golf courses, and six Off-Track Betting corporations.

New York City should exercise an option to buy Battery Park City for one dollar, the report said, estimating it could then pocket a $1 billion profit by selling commercial leases.

Privatizing would cut the $3 billion the state spends each year to maintain highways, subsidize bus services, fund mental health facilities, keep motor vehicle records, and manage human resources, prisons, welfare and Medicaid, it said.

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