The holes blown in New York budgets by Wall Street’s meltdown could reverberate through the Northeast region and beyond, after several years in which the financial capital’s strong performance helped drive national growth. New York state and New York City are preparing to address big budget deficits. And that is bad news for the wider U.S. economy, especially as other powerhouse states reel from job losses and sizable deficits. Next door in New Jersey, tax revenue fell short of projections by $258 million for the first four months of the fiscal year, and state officials there last week said Trenton’s budget deficit could reach $1.2 billion, triple the previous prediction. Neighboring Connecticut’s budget deficit, meanwhile, could hit $6 billion over the next two years. More
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