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ep 26, 2:04 PM EDT
Wall Street trips and states take the fall
By MICHAEL GORMLEY
Associated Press Writer
ALBANY, N.Y. (AP) -- The crisis in the financial system will almost surely blow gaping holes in the already tattered budgets of New York, Connecticut, New Jersey and other states that rely heavily on tax revenue from investment banks and the big salaries and million-dollar bonuses doled out to Wall Street professionals.
The downfall of such giants as Lehman Brothers, Merrill Lynch and Washington Mutual, and the turmoil at other financial institutions, could mean tens of thousands of layoffs of investment bankers, stockbrokers, traders, analysts and other employees.
Even before the crisis, many state governments had been forced to cut spending because of the shaky economy, soaring gasoline prices and the rising tide of foreclosures earlier in the year. How much damage the latest trouble will cause is not yet clear.
"We're keeping our seat belts on pretty tight as the roller coaster continues," New York Comptroller Thomas DiNapoli said Tuesday. "There's a huge hole right now. That hole is likely to get bigger."
New York and other states could be forced to make even deeper spending cuts and take money from such things as schools, road repairs and health and welfare programs.
In New York, New Jersey, Connecticut and Massachusetts alone, the securities sector last year employed 338,000 people and generated $104 billion in payroll, according to the U.S. Bureau of Labor Statistics.
About a fifth of New York state's revenue comes from Wall Street.
http://hosted.ap.org/dynamic/stories/F/FINANCIAL_MELTDOWN_STATES?SITE=FLTAM&SECTION=US
Wall Street trips and states take the fall
By MICHAEL GORMLEY
Associated Press Writer
ALBANY, N.Y. (AP) -- The crisis in the financial system will almost surely blow gaping holes in the already tattered budgets of New York, Connecticut, New Jersey and other states that rely heavily on tax revenue from investment banks and the big salaries and million-dollar bonuses doled out to Wall Street professionals.
The downfall of such giants as Lehman Brothers, Merrill Lynch and Washington Mutual, and the turmoil at other financial institutions, could mean tens of thousands of layoffs of investment bankers, stockbrokers, traders, analysts and other employees.
Even before the crisis, many state governments had been forced to cut spending because of the shaky economy, soaring gasoline prices and the rising tide of foreclosures earlier in the year. How much damage the latest trouble will cause is not yet clear.
"We're keeping our seat belts on pretty tight as the roller coaster continues," New York Comptroller Thomas DiNapoli said Tuesday. "There's a huge hole right now. That hole is likely to get bigger."
New York and other states could be forced to make even deeper spending cuts and take money from such things as schools, road repairs and health and welfare programs.
In New York, New Jersey, Connecticut and Massachusetts alone, the securities sector last year employed 338,000 people and generated $104 billion in payroll, according to the U.S. Bureau of Labor Statistics.
About a fifth of New York state's revenue comes from Wall Street.
http://hosted.ap.org/dynamic/stories/F/FINANCIAL_MELTDOWN_STATES?SITE=FLTAM&SECTION=US
