Politics on the Hudson

Gov. David Paterson this morning again upped the state’s projected budget deficits for the current fiscal year and next year, estimating that current gap may be double than projections earlier this month.

Paterson, speaking as a guest host on CNBC’s Squawk Box, said the state’s budget deficit, estimated Oct. 3 by his budget office to be $1.2 billion, is expected to grow to $2 billion to $2.5 billion.

He blamed the decline on Wall Street’s woes.

You can watch the clips here.

“New York derives 20 percent of our revenues from Wall Street and the fourth quarter of the fiscal year we actually derived 30 percent of revenues from Wall Street,” Paterson said. “Right now, we are estimating that personal bonuses will be down 43 percent, which will lose us $20.7 billion and capital gains taxes are down 35 percent which will lose us $38 billion.”

Paterson estimated that next year’s deficit, originally put at $5.4 billion, may be as high as $10 billion. He said the state will have to look at cutting its major expenses, which suggests he means education and health care – the state’s two top expenses.

“We have a serious economic problem,” Paterson said. “I just keep hearing everyone saying, ‘I think this is it, the market is going to turn back up again.’ No, this is a long projected struggle.”

Paterson has ordered the state Legislature to return to Albany on Nov. 18 to make cuts to the current budget, which expires March 31.

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