While the federal economy is showing mixed signals, New York Governor David Paterson is warning New Yorkers that the state will go broke in a month if the state legislature does not cut the $3+ billion from the budget that he suggested.
Of the $3.2 billion that Paterson asked the state legislature to cut, more than $1 billion will be cut from schools and hospitals. Here in New York City, Mayor Mike Bloomberg avoided having to cut the education budget and firing thousands of teachers when he was given federal aid from the stimulus packaged.
The legislature, particularly the State Senate which now has a Democratic majority, has been very resistant of the budget cuts on schools and hospitals and the possibility of having to raise taxes.
While the politicians are worried about keeping their seats, the big worry is the prospect of New York falling into the same kind of crisis as California.
California, the nation’s most populated state, has been bankrupt for quite some time and are now selling off state assets to cover some of their debt.
Many New Yorkers wonder if Paterson is really the guy for the job since they never elected him.
Paterson took over when former Governor Eliot Spitzer quit amidst a prostitution scandal. Now, many New Yorkers are saying that they might not mind having someone like Spitzer back in there because he had originally run on a very solid and popular economic platform which gave him a landslide victory back in 2006.