NORTH TARRYTOWN, N.Y. (AP) _ Like Rip Van Winkle, North Tarrytown has been asleep to its heritage for years, and will awaken to a new and better life if its name is changed to Sleepy Hollow, some residents say.

''It's a part of history that we're Sleepy Hollow,'' said Chris Skelly, a member of the Village of Sleepy Hollow Committee. ''It's not a made-up name. It gives us the potential to be famous because everyone's heard of Sleepy Hollow.''

In the Washington Irving story, Sleepy Hollow was the town where the Headless Horseman rode. Rip Van Winkle, another Irving character, slept for 20 years in the Catskills.

Skelly said Irving, for whom nearby Irvington was named, didn't make up the name, but reached back to 17th century Dutch descriptions of the area as ''slaeperingh haven'' and ''slaeperingh hol,'' or sleeping harbor and sleepy hollow. The names meant it was easy to dock there and spend the night.

Now, Skelly and others want to bring the Dutch name back to distinguish North Tarrytown from neighboring Tarrytown and try to revitalize the village of 8,000 beset by financial and social woes.

Residents will decide the matter during village elections March 15.

Opponents of the measure, such as Edna Belanich, a founder of Concerned Citizens Against Changing the Name of North Tarrytown, say it would be confusing and costly and wouldn't accomplish anything.

''It'll be a panacea, not a cure,'' she said. ''History will not pay the bills or solve the problems. We can keep history in our hearts.''

Skelly says history can go a long way to attracting new business, particularly tourism, to the village, which boasts the Sleepy Hollow cemetery, an old Dutch graveyard, and Philipsburg Manor, the home of an early English settler.

''We are not a suburb of Tarrytown,'' he said. ''We're in different towns. We have different histories. We are the older, more historic village and the name should reflect that.''

A report done by Mayor Janet Gandolfo estimated the cost of the name change to range as high as almost $40,000, including a new seal, new badges for police and firefighters and new administrative costs.

But Mrs. Belanich said the cost would be higher because it was difficult to determine hidden expenses.

''And it's not necessary,'' she said. ''They think changing the name will solve our financial problems and the social problems. They just don't want to be associated with them.''

The village suffered a major racial disturbance in 1986 when problems in the Hispanic community brought in officers from several neighboring communities and led to a countywide evaluation of Hispanic problems.

Financially, the village has been running in the red since it agreed to lower the property tax assessment for the General Motors plant, which had threatened to sue.

Originally called Beekmantown, the village became North Tarrytown in 1874, three years after Tarrytown was incorporated.

Skelly said North Tarrytown felt threatened by the town of Mount Pleasant, so it aligned itself with Tarrytown.

''Now we're just Tarrytown's poor relation. We don't get enough attention and we deserve it because we're world-famous,'' said Skelly. ''It's a very powerful name and image. It's a potential gold mine.''