Hard Times

Paterson: State Deficit Up $1.4B Over Last 90 Days

Governor Says Damage On Wall Street ‘Infecting’ State

‘Next Year’s Budget Process Starts Now’

NEW YORK (CBS) ― New York Governor David Paterson says the New York state budget deficit has gone up $1.4 billion in the last 90 days. The governor delivered the troubling economic news during a live broadcast message shortly after 5 p.m. Tuesday.

“Our state now faces increasingly harsh economic times. When I travel across the state, I see communities suffering. Everywhere I go I see people losing their jobs and their homes,” he said. “My message to the Legislature is that next year’s budget process starts now.

Paterson also said the budget deficit is estimated to grow 22 percent over the next three years and called for a special legislative session on Aug. 29.

“The damage on Wall Street is infecting all of our communities and its effects on New York state’s finances are devastating,” he said.”It is time for New York and other government to cut up our credit cards. The era of buy now and pay later and later is over. The faster we address this crisis, the faster and stronger we will emerge from it.”

In June, the governor stated under the current $122 billion budget there would be a $5 billion deficit. Now the situation has gotten considerably worse.

“I think he was put behind the 8-ball to begin with — with the way he came into office. I know he’s doing the best he can. But this is not just a statewide issue, it’s a nationwide issue,” said John Wing.

The governor presided over a meeting of the Financial Control Board, which in the mid-1970s led the city back from the brink of bankruptcy.

The problem today is tax revenues are vanishing. While tourism is up, the all important financial sector, Wall Street, is struggling.

“For the first quarter of 2008, Wall Street firms posted $22.8 billion in losses,” NYC Mayor Michael Bloomberg said.

Wall Street lost 4,300 jobs during the month of June alone. The city is facing a budget gap of $2.3 billion.

And our course, financially, when the city sneezes, Albany catches a cold; and this appears to be a bad one.

Under the state’s current $122 billion budget, the governor last month said there would be a $5 billion deficit. Now it’s expected to be greater. And the previous spending cuts by state agencies by a modest 3.3 percent are expected to be more drastic.

Source: WCBS