As the battle over the budget gets underway in earnest, let us spare a thought for the mayor. He was stunningly late in going into a crisis mode on the budget; the crisis we are facing was apparent to many even when he was campaigning for office. He has made, in our view, profound policy errors, primarily in placing a priority on austerity and management rather than pursuing a policy designed to promote growth through tax cuts and deregulation. But it needs to be said, as well, that hizzoner is in a devil of a predicament owing to limitations the law places on the chief executive of New York City, and one of the things the current crisis is doing is placing the structural flaws into the sharpest possible relief.

Since the city lived from short-term loan to short-term loan in the 1970s, it has been barred from running deficits of more than $100,000, a rounding error in the context of a full budget worth $44.5 billion. Although it sometimes finds off-budget ways around those rules, it lacks the capacity of the state — which has a balanced budget requirement only in theory — to borrow to keep spending up and taxes down during a bad economy. That means the mayor, who frequently deplores the debt the city was left by the 1970s crisis, is between the two choices of cutting spending and raising taxes, without the cushion debt provides.

Albany is apparently unwilling to permit the tax on commuters, which the mayor is spinning as income tax “reform.” Albany is resisting such a tax at any level, much less the higher-than-ever 2.85% Mr. Bloomberg unveiled Tuesday. The fact that the commuter tax is so unrealistic suggests to many that the $1.4 billion it is expected to raise is, in the words of the chief economist of the Citizens Budget Commission, Marcia Van Wagner,” a placeholder.” In other words, Mr. Bloomberg is going to tax $1.4 billion worth of something.

Mr. Bloomberg’s other immediate alternative is cutting another billion dollars out of the city’s budget, something that involves smelly streets and a real strain on the police force — unless the city’s relationship to its own budget changes. Out of a planned $44.5 billion budget, $30.7 billion is “city-funded.” Most of the rest is composed of state and federal grants that finance specific programs, and disappear if the programs are cut. Mr. Bloomberg warned yesterday that, for the first time, the city risks losing control of more than half of the rest. He counts $16.8 billion as “non-discretionary” as opposed to only $14.1 billion of “discretionary.”

Within the discretionary money, the mayor could have been far more aggressive in pushing for productivity savings from unions, threatening to privatize core services like sanitation, corrections, accounting, and even fire protection if the unions don’t come around. But with the unions apparent ly willing to take layoffs instead of giving up work rules and benefits, there’s little the mayor can do now but fire them.

The other key to fixing the city’s budget is bringing some of that non-discretionary money back into the city’s grip. The biggest portion is a $4.1 billion Medicaid bill. The city has pressed Albany to pick up a greater share of the tab. If it wants to cut spending, it can push Albany instead to make the pro gram less generous, and to rein in its use by the middle-class elderly for long-term care.

Also key are pensions and fringe benefits, expected to rise to a combined $4.5 billion next year. Some of that is because of the down stock market, but the Legislature in Albany has also passed a series of pension sweeteners, notably a mandatory cost-of-living increase.

Then there’s the famous “25-cent dollar,” the argument for keeping federal grants that fund most, but not all, of a program’s cost. They finance everything from youth summer programs to health care — and the city loses some 75 federal cents for every quarter it cuts. Truth be told, those grants are a trap and the city would do better saving its quarter.

The legacy of the Bloomberg administration could be to fight to take back the non-discretionary portion of New York City’s budget. The city is legally a creature of the state, but given the extent to which Albany takes from New York City while giving it little in return other than a set of handcuffs — Peter Vallone, who has been pushing the secession idea, pegs Albany’s siphoning from the city at $3.5 billion a year — more and more people are going to start asking at what point Gotham can afford to remain bound.

There are steps that the city can take short of the brewing secessionist movement. A campaign by the Bloomberg administration to restructure government, rather than simply pay for it, could yield significant results. Transportation could be privatized; city assets and parkland could be privatized or put under private management; tort awards could be curbed; rent control could be abolished to boost property tax revenues.

Much of this would require a battle with Albany, but, like the Mayor’s great fight over school control, we don’t see why one should assume the city is powerless to win. New York City’s representation in the state Legislature is as formidable as the chunk of cash the city sends to the state capital every year; 91 seats between the Assembly and the Senate represent residents of New York City (65 in the 150 member Assembly and 26 in the 61 member Senate). These representatives don’t always provide a united front, or agree with the mayor, but it seems implausible that they could not arrive at some common ground for forcing Albany’s hand to give more power to the city to rule itself.

Some might argue that New York City’s politicians have deliberately kept power over the city’s spending out of their own hands. The money keeps flowing to their constituents, while they can disclaim responsibility and merrily raise taxes. Such gaming of the system may be going on. But the logic of continuing it has long since gone threadbare. Seeing the powerlessness of the mayor and the City Council in the current predicament may just put all this into a new relief.

The idea of secession has been batted around periodically by generations of New Yorkers frustrated by their own impotence. This crisis may yet prove to be the one to make it a serious possibility. Becoming the 51 st state might not be ideal, but perhaps a state constitutional convention or some other process for redressing the city’s grievances will be the result of this push. The logic is there, and Mr. Bloomberg can hardly wish the ropes that bind him to bind future mayors.