New York Teeters On The Edge Of Unprecedented Fiscal Crisis

The accidental governor has some bad news for New York. It’s going to be severely indebted in the near future. And there will be no jobs.

NY Post: New York Gov. David Paterson said Tuesday that the recession, overspending by the state and Wall Street’s meltdown will result in a record $47 billion deficit over the next four years.

He says the current budget’s shortfall is $1.5 billion and the next fiscal year beginning April 1 will include a $12.5 billion deficit. A month ago, the current deficit was estimated at $1.2 billion.

“New York is at the epicentre of an extraordinary financial crisis on Wall Street,” Paterson said in releasing the state’s mid-year financial reports during a New York City news conference. “We will have no choice but to take bold and aggressive action to reduce state spending.”

He said his administration projectsmore than 160,000 New Yorkers will lose their jobs during this downturn and the unemployment rate, now 5.8 per cent, will reach 6.5 per cent. He said every sector of New York’s economy is expected to lose jobs, and those still employed will see weaker wages. He said personal income is projected to decline 1 per cent in 2009 and wages will drop 2.1 per cent. By comparison, he said personal income rose 6.5 per cent and wages grew 8.6 per cent in 2007.

See Also: Governator To Paulson: Nevermind About That $7 Billion

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