ALBANY — Wall Street’s woes could turn into state government’s problem next year, Gov. Cuomo warned yesterday.
With taxes from Wall Street supplying 20 percent of the money to run state government, a potential dive in Wall Street bonuses could increase New York’s projected $2.4 billion deficit for the fiscal year that begins April 1, Cuomo said.
“It would be a problem for the state,” he told reporters at the Capitol.
“The economy is slowing and people are now suggesting it may be especially slow on Wall Street, which we are heavily reliant on. We already see the collections slowing, so yes, we are worried” that the deficit could grow.
Compensation levels for bankers and traders could fall at least 20 percent from last year, according to recent reports.
A combination of low trading volumes, fewer high-profit banking deals and increased regulatory costs is starting to squeeze profits at big banks such as Goldman Sachs, Morgan Stanley, Bank of America, Citigroup and JPMorgan with no end in sight.