New York's Devastating Tax Crisis
Governor David Paterson has gone on the record to highlight that in terms of tax revenue New York is “Ground Zero for the economic recession…you can’t overinvest in one area because, if it fails, you’ll have a debacle.”
Wall Street firms historically account for more than 20 percent of New York state tax revenue. Paterson now has to face the difficult reality that tax receipts are still 36 percent short from where they were at this time last year. This is despite $5.2 billion in new or increased taxes that were expected to offset some of the anticipated shortfall.
New York has few remaining options for balancing its budget. Bloomberg has more details available in its write-up on the current New York income tax crisis.