With 20% of New York's revenues tied to the stock market, every hit drags the state deeper in debt.
The Governor's projecting a record deficit despite new efforts to trim up at least 2 billion from the current budget.
Action News Anchor Candace Chapman spoke with David Paterson about options.

PATERSON:
"Once you start taxing, people start spending the money before it goes where it should go toward debt reduction.
So I am going to stand against raising any taxes for this period and next years as well because that just perpetuates the addiction and we start spending again.
Our revenues, even as much as they have declined, were still 8.3% higher this year but our spending was 10.9% higher as well.
You're just not going to be able to run a government when you spend so without really any regard for what you're doing."

QUESTION:
Is there any possibility, I mean this particular crisis does affect New York State more than any other state because where Wall Street is located. Is there any sense you might get any help from the federal government as they helped these financial institutions.

PATERSON:
"Well, I think the attitude of the House of Representatives members and Senators, and this is a very astute question Candace, is that the bailout is helping New York. The bailout is not helping New York's residents. It is helping companies that are focused and based in New York.
New York's residents are taking the biggest hit this country has. We get back $82.2 billion dollars less than we pay into the federal Treasury in taxes. The state of Arizona, which has a resident running for President right now, gets back $13.7 billion dollars more than it pays in to the federal government. New York has been the bailout for the Feds for years. I'm going to try to get Senator Clinton, Senator Schumer and some of the others leaders of the state to come to Washington with me a second time, to get people to realize New York is as important to our national economy as Bear Stearns and Merrill Lynch and Lehman Brothers and AIG and anybody else. So it is a very good question and we are trying to rectify that."

QUESTION:
What do you tell me, the resident of New York, that I need to be prepared for in the next year or two or however far out it takes to resolve?

PATERSON:
"If you want to sell your house, as so many have done and move to other states, you might have trouble finding a buyer because no one is lending any money.
If you want to get rid of your car, that might be a problem as well.
A lot of the companies that you would borrow money from are not going to be able to do it.
The unemployment rate is skyrocketing, people are lining up at hotels trying to work the midnight to 8:00 shift, they never would have done before. So we are going to see all around us unemployment and home loss.
It is very sad, however, New York has been in tough and tumultuous times before. We have always come through, we have got to believe we are going to do it again."