New York budget faces 47 billion dollar abyss: governor
NEW YORK (AFP) — New York state must make "painful" spending cuts to cope with an estimated 47 billion dollar budget shortfall over the next four years, the state governor warned Tuesday.
Governor David Paterson said the Wall Street crisis and a national recession would strike hard at the state, with losses of at least 160,000 jobs.
The state budget faces a deficit of 1.5 billion dollars this year and a 12.5 billion dollar deficit in 2009-2010.
The cumulative gap will be 47 billion dollars over four years, he told a press conference carried live on NY1 television.
The economic situation made the stormy weather currently lashing New York resemble "a balmy sunny afternoon in Hawaii."
Paterson, who took over the governor's post earlier this year after his predecessor resigned in a sex scandal, ordered the state legislature to meet in special session next month.
"New York is at the epicenter of an extraordinary financial crisis on Wall Street. We will have no choice but to take bold and aggressive action to reduce state spending," he said.
"There will be hard and painful cuts. There is no segment of this budget that will not be cut."
New York state relies heavily on the city and particularly on taxation of the Wall Street finance industry, which is in severe turmoil.
In ordinary times, about 20 percent of state revenues derive from Wall Street, growing to 30 percent in the fourth fiscal quarter, when bonuses are paid out.
