Wall St trauma cuts New York tax collection

Reuters reports:

New York Gov. David Paterson on Friday warned the state "might not collect many revenues" from its 20 biggest corporate and bank taxpayers because of Wall Street's downturn, as he ordered legislators to work over the weekend to craft a $124 billion budget.

New York gets about 20 percent of its tax revenues from banks and brokerages, which had already written off more than $150 billion of investments due to the subprime quagmire before the first quarter ended on March 31.

Many other states and countries around the world could also see tax revenues slide. Lehman Brothers, in a report on Friday, estimated financial companies globally could write down as much as $400 billion for bad debts by the end of 2008.

New York's new Democratic governor, who replaced former Gov. Eliot Spitzer last month after Spitzer resigned amid a sex scandal, told reporters lawmakers had restored enough cuts to hike spending by 4.3 to 4.5 percent.

The state's budget was due on March 31, and Paterson explained one of his first steps was to slash spending enough to restrain the spending hike to 3.7 percent.

Those who rely on taxing "the rich" have problems when "the rich" don't make as much money.You'll notice that the New York state legislature keeps on spending more and more money in goods times and bad.How irresponsible can you get? The real estate fall out is here for New York and New York wants to increase government spending.