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Governor declares New York economy officially in recession

Thursday, July 31st 2008 - 21:00 UTC
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NY Lieutenant Governor David Paterson NY Lieutenant Governor David Paterson

New York governor David Paterson admitted the state economy was in recession and announced spending cuts to face a steep budget deficit due to declining tax revenues. Paterson said that he would ask the legislature to approve another 600 million US dollars cut in an emergency session.

The state's budget director, Laura Anglin, said New York is "officially" in a recession, noting that the state's five last contractions averaged 25 months, more than double the national average of 11 months. "We're all going to feel some pain," Paterson told reporters after a quarterly update on the state's budget. "The sooner we can address it, the sooner we can recover from it". Paterson blamed the budget crisis on over-spending, along with the dramatic losses on Wall Street, which accounts for one out of every five tax dollars in the state. The cuts would address a 630 million US dollars shortfall in the 122 billion budget for the current fiscal year, which ends March 31, 2009. The 600 million in additional cuts Paterson seeks would be insurance against any further declines in revenues. Paterson, who in March rejected a higher income tax for millionaires, said tax increases would be a last resort. "The reason I'm avoiding taxes is because I think taxes are addictive," he said, but added no measures can be ruled out. Paterson said he was hopeful the legislature will enact a 4% cap on property taxes he proposed. The Republican-led Senate plans to approve the 4% tax cap next August 8.

Categories: Economy, United States.

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