With just five days to go before Governor David Paterson releases his preliminary budget for next year – one that is expected to call for dramatic cuts in education, health care and other state services to fill an expected $12.6 billion deficit – the state and city comptrollers agreed that September's Wall Street collapse would continue to hurt the regional economy well into 2010. Both recommended government intervention on a large scale in response.
Speaking before a packed breakfast gathering of the Business and Labor Coalition of New York at UFT headquarters in lower Manhattan on Dec. 11, state Comptroller Tom DiNapoli estimated that statewide job losses from the Wall Street meltdown would top 225,000 — the outcome of huge losses in the securities industry, its multiplier effect on related jobs, and a sharp decline in state revenue.
"The securities industry went from record profits of $20 billion in 2006 to record losses of $26 billion this year," DiNapoli said.
Among his recommendations, DiNapoli urged support for the auto industry bailout, which he said would help not just Detroit and the Midwest, but also western New York State and its sizable auto parts manufacturing industry.
"Statewide, there are 200,000 New Yorkers in auto-related employment, which illustrates the interconnectedness of all of us," the state comptroller said.
DiNapoli also argued for the need to prioritize capital projects to ensure that the state's infrastructure was maintained in tough fiscal times. Among the projects he would prioritize are replacing the outmoded and traffic-congested Tappan Zee Bridge, updating the Bronx's Hunt's Point Market, and investing heavily in public transit. These projects, he said, "would help the greatest number."
DiNapoli also called for "aligning spending with revenue," though he claimed that a recession was no time to raise taxes statewide
Many of the state comptroller's statistics are contained in his office's recent comprehensive 16-page report, "The Securities Industry in New York City."
Introduced by NYSUT Executive Vice President Alan Lubin, New York City Comptroller and mayoral aspirant William Thompson Jr. echoed DiNapoli's themes. Because his office estimates that New York City will lose 170,000 jobs from its peak in January 2008 through 2010, he called for "massive government intervention in the economy" to stop the job hemorrhaging.
Thompson said he expects the incoming Obama administration to sponsor "the largest federal stimulus package since the Great Depression." Given that strong possibility, he said that both the state and the city "need to have projects ready to go," including rebuilding Pennsylvania Station on the site of the city's main post office, "so that when the federal government opens the stimulus tap, we're not forgotten."
Like DiNapoli, Thompson's statistics came from his office's forthcoming report, "The State of New York City's Economy," which is scheduled to be release on Dec. 15, the day before the governor issues his proposed budget for the coming fiscal year.