New York Feels the Pinch From Wall Street Downturn; Governor Vows To Cut Budget as Tax Revenue Falls
Wall Street's woes are mounting. Investment banks are swamped by bad mortgage debt. Profits have fallen. Tens of thousands of jobs are being cut. And those lucrative year-end bonus checks are likely to be the stingiest in more than a decade.</br></br>The city and state economies are inextricably linked to the health of the Street. Those reduced bonuses mean fewer dollars to be taxed -- and fewer dollars to be spent in high-end restaurants, boutiques and bars.</br></br>"You can feel it affecting the regular lunch crowd," said Corrado Goglia, the general manager at Delmonico's, a steakhouse in the financial district. "There's been about a 20 percent decrease in sales at lunch. People are doing away with larger lunches, the $40 to $50 steaks. They're going down to lighter burgers."</br></br>Last Tuesday, Gov. David Paterson (D) made a rare televised address to issue a somber warning that tumbling revenue from the Street means tough times ahead for the state. "The damage on Wall Street is affecting all of our communities," Paterson said, "and the effects on our New York state financing are devastating."</br></br>Paterson used one particular statistic to illustrate the depths of the crisis. In June of last year, the state's 16 largest banks paid about $173 million in taxes into the state treasury. This June, those same banks paid in $5 million -- a 97 percent decrease.