New York in for some lean times

Cyrus Sanati reports on Comptroller Thomas DiNapoli's report:

The downturn in the financial markets could eliminate 225,000 jobs and cost the state $6.5 billion in tax revenue related to the securities industry over the next two years, according to a grim report released Monday by New York State Comptroller Thomas P. DiNapoli.

And these estimates may be on the conservative side. The report acknowledges that things could get far worse if structural changes in the industry wipe out many of those high-paying Wall Street jobs forever.

Wall Street accounts for 20 percent of the state’s budget, so any permanent changes to the industry could have a disastrous effect on the state’s ability to provide services.

The state of New York now forecasts a budget gap of $1.5 billion in the current fiscal year. That gap is expected to grow to $12.5 billion in the 2009-2010 fiscal year and then balloon to $17.2 billion in 2011-2012 fiscal year.