New York dependency on Wall Street

In case you haven't noticed of late, New York state is in serious financial trouble. Not unexpectedly, New York state and New York City depend on the success of Wall Street for their budgets. Wall Street activities account for 20 percent of state tax revenues and 13 percent of New York City revenues before the recession.

These revenues have significantly dropped, 14 percent and 7 percent, for state and city, respectively. The state also lost 28,000 high-paying employees in the securities industry. In 2011 the bonus pool dropped 14 percent. No matter your thoughts about Wall Street, its golden goose is being severely wounded, if not completely destroyed.

To further complicate matters, rather than embracing budget cuts, the state is borrowing significant amounts from its pension plan. For the past several years they have borrowed an estimated quarter of a billion dollars. This borrowing may be a way of subverting the state’s balanced-budget amendment, but it certainly does not protect the New York taxpayer who will eventually pay this piper.

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