Sept. 15 was the day that the New York State Department of Taxation and Finance was waiting for. It was the deadline for quarterly tax payments, providing not only government revenue but also a reading of the state's fiscal pulse.
It turned out, quite by coincidence, to be the day that Wall Street investment banking giant Lehman Brothers filed for bankruptcy -- a path to less state income, but also a crucial piece of information for officials trying to figure out how much money the state will have to spend.
It will be a lot less. And the Legislature must heed Gov. David A. Paterson's request that it cut significant amounts of spending from the current year's budget and face next year's spending plan with an eye for maximum savings.
Paterson has already called for a post-election special session, with a demand that it cut $2 billion from the state's budget. Assembly Speaker Sheldon Silver, as usual, clings to hope that the Legislature won't have to trim that much and says the shortfall is "only" about $1.2 billion. Paterson has a far better chance of being right.
Any cut would be on top of the $427 million cut from the current year's budget in the last special session, back in August. And it may not be enough -- the speed with which the state's financial picture has gone from bad to worse is remarkable. But that hasn't happened in secret.
New York is dependent on the financial services industry, commonly known as Wall Street, for some 20 percent of its revenue. And about a third of the whole year's income flows in during the final quarter of the state's fiscal year -- January, February and March -- partly because that's when Wall Street traditionally pays out its big annual bonuses.
Those bonuses will be down precipitously this year, if they exist at all. Some of the larger investment banks have disappeared or been taken over. Paterson had been particularly disappointed by the fact that the failing Wachovia Corp., which had been offered up for sale to New York-based Citigroup, instead looked likely to be sold to the West Coast's Wells Fargo. (Under discussion is a compromise that might see most of the bank's deposits go West while a portion will go to Citigroup.)
The state Division of the Budget estimates that 40,000 Wall Street jobs will disappear in this meltdown -- taking their withholding taxes and annual bonuses along with them.
Paterson has expressed growing frustration, since the burden of state collapsed upon him in March, that legislative leaders have not appreciated the gravity of the state's financial woes. His calls for cuts have been answered with warnings that cuts should be made "prudently," as legislative leaders seek to protect some of the biggest recipients of state money -- and most powerful interest groups -- health care and education.
Cuts should be fair and the degree to which the most helpless among us are made to suffer should be minimized. The concern that cuts in state aid to local governments will put upward pressure on property taxes is real.
But this is no time for delays and reluctance masquerading as prudence. Aggressive action to cut spending -- fairly, evenly and without fear or favor -- is called for.
Lawmakers who aren't ready to do that should tell us now, before Nov. 4, so that voters will know who doesn't have the stomach to be re-elected.