Wall Street is reeling from the slowdown of the economy, and New York state is feeling the crunch. New York Gov. David Patterson called an emergency session of the state Legislature on Wednesday warning of the future budget shortfalls of the state and offered his solution of possibly selling off roads, bridges and tunnels to stem the growing budget deficits.
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One of the main reasons for the budget gaps is the shortfall of tax revenues partly attributed to the shrinking of taxes from New York's financial sector. Tax collections from New York's 16 biggest banks shrank nearly 97% to $5 million last month from $173 million in June 1997, the governor said. Add to that the problem of the impact to the New York economy of the anticipated drop in bonuses for Wall Street workers. The New York Times reports that bonuses for financial employees based in New York could shrink by $10 billion or
more at the end of this year, which translates to even less taxable income for the state. Patterson's proposal is nothing new and will certainly be met with its share of opposition, but desperate times sometimes do call for desperate measures. - Gerald Magpily
See NY Post article
See Dealscape: N.Y. is hurting due to Wall Street bonus cuts
