Candidates for the state Assembly and Senate are talking so much about fixing Albany this campaign season that one might think the issue of government reform will dominate next year’s legislative session.

Realistically, however, the biggest decision the newly elected lawmakers will face is one that few are bringing up in their stump speeches: whether to raise taxes.

For the fourth straight year, state government faces a multibillion-dollar gap between how much it expects to spend and how much it expects to collect in revenue. No matter what happens in the name of reform, legislators will come under intense pressure from health-care workers and government employees – who also happen to be some of their biggest campaign supporters – not to cut government programs. And if recent history is any guide, lawmakers are likely to solve the problem, at least in part, by dunning taxpayers.

If nothing else, legislators will be tempted to extend the temporary tax hikes they enacted in 2003, which are due to expire during the 2005-06 fiscal year. As things stand now, a quarter-point increase in the state sales tax runs out on June 1, and an income tax surcharge on people who make more than $100,000 phases out at the end of 2005. Parallel hikes in New York City’s sales and income taxes are supposed to sunset on the same schedule.

Legislative leaders – who pushed through the tax increases over Governor Pataki’s objections – portrayed them as a stopgap response to the fiscal crisis brought on by September 11, a bear market on Wall Street, and a nationwide economic recession.

Since then, the Republican majority leader of the Senate, Joseph Bruno of Rensselaer County, and the Democratic speaker of the Assembly, Sheldon Silver of Manhattan, have both reiterated their intention to keep to their original timetable for undoing the hikes.

Yet Albany has a history of reneging on such commitments, and already this one shows signs of slippage. As promised, a portion of the income tax surcharge went away on schedule this past January. At Mr. Pataki’s urging, however, lawmakers extended the sales tax on clothing purchases under $110, which was supposed to end this past May, for an additional 12 months.

Because of these tax increases, and New York’s economic recovery, the state’s tax collections have bounced back to where they were before the destruction of the World Trade Center. Yet state spending barely slowed down during the lean years, and now, at $103 billion, stands about 30% higher than it was three years ago. So far Albany has made up the difference by drawing more aid from Washington, borrowing heavily, expanding state-sponsored gambling, depleting its reserves, and taking advantage of one-time opportunities to raise cash.

Still, the gap between income and outgo remains significant. Governor Pataki’s budget office projects a structural deficit of $5.7 billion, or about 6% of overall spending, for the 2005-06 fiscal year. Legislative leaders, citing a recent up-tick in tax collections, argue the governor is being unduly pessimistic. Still, they foresee a gap of more than $3 billion.

As a practical matter, however, even Mr. Pataki’s number probably understates the full scope of the problem.

For one thing, he does not factor in what it will cost for the state to comply with the court order in the Campaign for Fiscal Equity lawsuit, which requires a substantial increase in funding for New York City’s public schools. A state Supreme Court judge at Manhattan, Leland DeGrasse, is readying a court order that is expected to mandate billions more in education spending over the next several years, much of which would have to come from Albany.

Nor do the deficit projections include any additional outlay to head off fare increases by the Metropolitan Transportation Authority, which has a multibillion-dollar hole in its capital budget.

At the same time, state government is banking on revenues that might not materialize as expected. A midlevel appeals court, for example, recently determined the law authorizing slot machine-like video lottery games at horseracing tracks violates constitutional limits on the lottery. Another court found constitutional problems with the conversion of Empire Blue Cross & Blue Shield to a for-profit company, which was supposed to pump hundreds of millions of dollars into the state treasury. Mr. Pataki proposed statutory fixes for both of these court rulings, but lawmakers – despite passing the latest state budget in history, on August 11 – never got around to acting on them.

Taken together, these factors could push the gap between what lawmakers feel compelled to spend, and how much money they actually have, closer to $10 billion – which is about where things stood in May 2003, when lawmakers passed the temporary tax hikes to avoid spending cuts.

Even if the rosy scenario comes true, and lawmakers face a deficit of no more than $3 billion or $4 billion, they will still face difficult choices. Even if the court order on school funding is delayed on appeal, it’s hard to imagine lawmakers voting to cut education aid. And that, along with debt service and mandatory payments into the retirement plan, use up half of the revenue from state taxes.

The other big-ticket item is the Medicaid health plan for the poor and disabled, which is the fastest-growing expense on the ledger of both state and local governments. Yet lawmakers have shown no stomach for cutting funding for this program, which provides health care for millions of people and jobs for hundreds of thousands more.

In effect, the lawmakers’ various actions and inactions of the past three years have prolonged the fiscal crisis to the point where they face almost exactly the same choices as they did in the immediate aftermath of September 11.

Voters might want to contemplate that when they hear candidates talk about reforming the process in Albany.