Hard Economic Times Mean Shortfalls for City and State

With a looming budget shortfall next year of $2.3 billion, Mayor Bloomberg says the city must keep spending in check. He and other officials testified this morning at a meeting of the Financial Control Board, which was set up in the 1970s when New York City was facing bankruptcy.

REPORTER: City Comptroller William Thompson praised Bloomberg for setting aside surplus resources as a hedge against the deteriorating economy and softening housing market.

But he warned that despite a balanced city budget for the current fiscal year, growing debt service, a weak financial sector, and slowing economy will contribute to future deficits.

Governor Paterson confirmed at the meeting that he will give a televised address tomorrow about the state's dire fiscal straits.

He warned that Albany hasn't been keeping a so-called "rainy day fund" like the city has.

PATERSON: Our state deficit for 2009-2010 has already been assessed at five billion dollars, so we don’t have that cushion that the city has, nor do I get the sense that anyone seems to be all that panicked about it.

REPORTER: The Governor's address to the state is tomorrow evening.