NEW YORK, NY January 21, 2008 —Governor Spitzer and Mayor Bloomberg both plan to unveil their budgets this week. Both must address an unstable economy.

Wall Street's recent gyrations are a real headache for both city and state budget makers because both City Hall and Albany rely heavily on the stock market for tax revenue. So a slide in the stock market's performance can mean tough choices for state and city governments. Less money coming in has to be made up by either budget cuts, higher taxes, or a combination of both.

A softening real estate market doesn't help either. Governor Spitzer has pledged to not raise taxes -- but he’s also committed to significant new spending for upstate economic development and affordable housing. Meanwhile, Mayor Bloomberg is considering actually cutting property taxes 7 percent, and giving out another round of 400 hundred dollar rebate checks.

But city officials say that a billion dollars plus in property tax relief is contingent on the city getting what it needs in annual aid from both the state and federal governments. This year that state aid made up 11 billion dollars of the city's current 60 billion dollar budget. Just what the city needs next year from the state, and what Albany is ready to deliver, remains to be seen.