New York: A Red (Ink) State.
July 30, 2008
Governor Paterson, in a televised speech, called for action to combat New York’s growing deficit. From the New York Times article:
ALBANY – Gov. David A. Paterson, in a brief and rare live televised address, said Tuesday evening that New York is facing a fiscal crisis in the wake of Wall Street’s meltdown, and he called on the Legislature to return next month to grapple with a budget deficit that will grow to $26.2 billion over the next three years…
“I’m asking for the state leaders in the public and private sector, in labor, those who serve in Washington, owners of business and others to join us in this great effort,” Mr. Paterson said. “The era of buy now, pay later and later is over. The faster we address this crisis, the faster and stronger we will emerge from it.”
…The damage on Wall Street is infecting all of our communities, and its effects on our New York State finances are devastating,” Mr. Paterson said. At the same time, he said, the projected budget deficit for the fiscal year that begins April 1, 2009, has grown to $6.4 billion from $5 billion in just the last three months. The projected three-year shortfall has also grown sharply, to $26.2 billion from $21.5 billion.
Just to put the numbers in perspective, a $6.4 billion deficit for next fiscal year represents 8 percent of the $80 billion operating budget. The state provides detailed, easy-to-read budget information (here).
The Governor provided no details on how the Empire State will resolve this financial crisis, but is calling for an emergency legislative session in August.
Many states across the U.S. need to address similar budget shortfalls. In California, Governor Schwarzenegger threatened to cut state employees’ wages to minimum wage until the state works out a budget compromise (here). Perhaps New York can work out a deal and avoid a California-type budget meltdown.
For more on tax policy in New York, see our New York State Tax Policy and Data page.