Incoming NY Gov Held Urgent Mtg With Financial Advisers

Mar.16, 2008 in Market Outlook

New York’s incoming governor, David Paterson, called an urgent summit with top
fiscal advisers late Saturday as Wall Street’s crisis threatened to undermine the
state’s new budget, the New York Post reported Sunday.

“It’s really scary,” a Paterson aide told the Post before the meeting began.

While the aide said the state faced “no immediate emergency,” other officials
said they were afraid that significant cuts or higher taxes might be needed to
balance New York’s record-high $124 billion budget for the fiscal year beginning
April 1.

A source close to the talks called the state’s fiscal outlook “grim.” According
to the New York Post report, 20% of the revenues needed to fund outgoing Gov.
Eliot Spitzer’s proposed budget comes from Wall Street revenues, but experts
forecast a massive drop in profits, and therefore taxes, from the floundering
industry.

Among those said to have participated in the meeting were state Budget Director
Laura Anglin, Director of State Operations Paul Francis and Paterson Chief of
Staff Charles O’Byrne, the Post reported.

Paterson had been briefed on the Wall Street situation twice by state banking and
other officials late Friday and Saturday morning, according to the Post report.

Paterson is slated to be officially sworn in as governor Monday. Spitzer resigned
last Wednesday after being exposed as a client in a high-priced prostitution
ring.

Newspaper Web site: http://www.nypost.com

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