New York Gov. David Paterson last week called for legislative leaders to meet on Friday to take steps to deal with revenue and job losses in the state’s financial industry.
“We are in a profound economic crisis,” Paterson said in a press release. “We have already taken extraordinary action to contain state spending, but the events that unfolded in our state and nation over the last two weeks have created an urgent need for a reassessment of the current year’s budget and the planning for next year’s.”
In an interview on radio station WCBS, Paterson said he didn’t anticipate further budget cuts to state agencies. “There are other areas of the budget that we’re going to have to look [to] for spending reductions,” he said.
Paterson said they would try not to cut funding for counties but didn’t rule it out. “Everyone says, 'You have to cut but don’t come in my area,’ ” he said. “We’re going to be in everybody’s area before this is over.”
This week the comptroller’s office will release updated numbers on the state’s finances, and next month officials will release new revenue estimates to go with a revised financial plan.
The state gets 20% of its revenue from the financial industry, making it particularly vulnerable in the current downturn. In August, the governor called on the Legislature to cut $600 million from the budget in a special session. Lawmakers came up with $427 million in cuts. Paterson said he wanted to begin developing a plan of action to be implemented by the end of the year.
Paterson’s call came days after New York City budget director Mark Page directed city agencies to cut $516 million in the current fiscal year and $1.05 billion next year. The cuts are to be recurring and proposals are due on Oct. 8.
“It has become increasingly clear that our forecast future deficits will not be cured, as has been the case for the last few years, by an improvement in the forecasts and higher than expected revenues,” Page wrote in a letter to agency heads. “The credit crunch which began over a year ago has worsened, and has led to increasingly serious losses on Wall Street.”
The city gets about 9% of its revenue from the financial sector.
Mayor Michael Bloomberg last week said that cuts in city jobs were not imminent and that a 7% property tax cut due to expire at the end of June might expire in January instead, according to published accounts.