US News

DAVE AND MIKE PUT TAX HIKES ON TABLE

New Yorkers got a double dose of dire economic news yesterday with both Gov. Paterson and Mayor Bloomberg warning that tax increases might be necessary to close enormous deficits facing both the city and state.

Paterson – who had previously described tax hikes as a last resort – told an overflow Crain’s New York Business breakfast forum that spending cuts alone probably wouldn’t be enough to wipe out a projected $5.4 billion deficit in the fiscal year that starts April 1.

“If we demonstrate fiscal responsibility . . . if somebody wants to do a tax increase to finish it off, I don’t even think at that point the public would object to it because at that point we would recognize we’ve turned the corner,” the governor said.

Hours later, during a press conference in Police Headquarters, the mayor offered a carbon copy assessment of the city’s finances.

“We’re going to have some very tough times,” declared Bloomberg.

“We have a deficit of $2.3 billion [projected for fiscal 2010]. You cannot cut $2.3 billion out of our budget.”

One source said the Bloomberg administration is monitoring tax receipts for July-September 2008, the first quarter of the fiscal year, in hopes they exceed estimates. If they don’t, a tax hike could be the alternative.