Despite $5.1 billion spending reductions and massive $5.2 billion in tax increases, NY State continues to exceed taxpayers’ price range, revenue data shows, as receipts crashed 36% below a year ago.
“We added personal income tax, which we thought would make the falloff 10 percent to 15 percent,” NY Governor David Paterson said on CNBC today, referring to new or increased taxes. “This is what is so frustrating. It’s still 36 percent, meaning our revenues fell more in 2009 than they did in 2008.” [Bloomberg]
While there had been indications that the figures would fall short, the deterioration in the state’s budget seems to be markedly worse than state officials expected. Wall Street companies lost $42.6 billion last year, notes Bloomberg, and year-end bonuses to workers fell 44% to $18.4 billion. Meanwhile, income tax receipts were down 24% as of Aug. 31. In addition, the budget, which is exhausting all of its options of getting balanced, will still be $2.1 billion in deficit because spending plans exceed revenue projections.
“We are Ground Zero for the economic recession,” said Paterson. “What we’re recognizing now is what everybody recognizes in their own portfolio: you can’t overinvest in one area because, if it fails, you’ll have a debacle.”
Here is more from Paterson on NY’s Challenging Times
