Technology giant Sun Microsystems reported yesterday that its tech sales to the northeastern United States’ financial industry were down 20 percent last quarter compared to the same period a year earlier, the Journal reports. The financial industry is one of the biggest creators of tech jobs, and such a drop can’t be good for the prospects for tech-industry employment in New York in the near future.

The WSJ today reports some expenditure details of Vallejo, northern California, pop. 117,000. Vallejo declared bankruptcy earlier this year after having unsustainably ramped up public spending in response to unsustainable tax revenues stemming from unsustainable property-values stemming from unsustainable mortgage-lending practices. (more…)

Wall Street has been shaken to its foundations, state and city revenues are plummeting, the long term fiscal outlook grows grimmer every week — and Mayor Bloomberg today announced yet another generous “pattern” deal with a municipal labor union.  The 8,300 members of the Correction Officers Benevolent Association (COBA) will receive compensation increases averaging nearly 10 percent over the next two years, raising their basic maximum salary to $76,488 before overtime, differentials and other extras. (more…)

Forecasters at the Centre for Economics and Business Research in London think that securities-industry bonuses there will plummet 60 percent this winter. London bankers reaped the equivalent of $17 billion in bonuses in 2006, the peak year; in New York, the peak figure, reached in 2007, was $33 billion. (via FT’s “Closing Doors” article on p7 of today’s paper, not online)

In a press conference Q&A today, Mayor Bloomberg said of state spending that cuts to Medicaid and education are “politically very difficult.” (more…)

In the written version of his congressional testimony yesterday, Governor David Paterson made this pointed reference to what the late Sen. Daniel Patrick Moynihan used to call the “balance of payments deficit” between New York State and the federal government:

While all states are hurting and deserve support from the federal government, I think it is
incumbent on me to note that New York faces unique circumstances with respect to this crisis.
First, we are at the epicenter of the crisis on Wall Street, and the failure of financial institutions
impacts our revenues and unemployment situation more than any other state … Second, New York has been shortchanged for years when it comes to aid from Washington. In 2007 alone, New York sent $86.9 billion more to the federal government in taxes than it received in return – again, more than any other state.New York has been shortchanged for years when it comes to aid from Washington. In 2007 alone, New York sent $86.9 billion more to the federal government in taxes than it received in return – again, more than any other state.  [Emphasis added.]

But as Moynihan ultimately recognized, that imbalance is less a matter of how aid is distributed than of how federal taxes are imposed. High-income states like New York always send more to Washington than they get back.  (more…)

New York AG Andrew Cuomo has written a letter to nine financial institutions inquiring whether those institutions’ receipt of emergency federal money has changed those firms’ expected bonus payouts for “top management” for the winter of 2008-2009. Cuomo’s letter also asks the banks to outline past payments to employees who earned more than $250,000 in either 2006 or 2007.

(more…)

Governor Paterson went before a congressional committee today to call for a federal stimulus package to aid financially troubled states–including this pitch for added funding for infrastructure repair:

We in New York have many programs involving roads, bridges, infrastructure development and also water waste treatment that are ready to go.  If we had the dollars to actually begin [with], we would have 40 shovel-ready programs for improving highways and bridges. We would have another 58 programs ready to go in the area of water projects. [emphasis added]

The problem, of course, is that New York’s shortage of infrastructure repair dollars is largely its own fault.  (more…)

On the heels of Governor Paterson’s gloomy budget update, state Comptroller Thomas DiNapoli announced the state’s Common Retirement Fund has lost 20 percent of its value since April 1.  That would translate into a drop of $31 billion from the March 31 level of $154 billion.

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Governor David Paterson is right on the money in calling for “bold and aggressive action to reduce state spending” to deal with the severe and worsening fiscal crisis detailed in today’s Mid-Year Budget Update.  At this point, after months of dire warnings, there’s hardly anything the governor can say that would make the problem sound worse than it is.  But touting a “$47 billion budget deficit over the next four years,” as is done in the headline of the governor’s accompanying press release, doesn’t really do much to illuminate the issue.

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