Feed on

… is that they sometimes kill their prey.

Gov. David Paterson warned Thursday that New York could lose $1 billion under the Obama administration’s decision to cut executive pay at seven companies that received federal bailout money.

“I’m not going to defend the people who run these companies,” Paterson said. “They frittered a lot of money away in reckless schemes. But the reality is that New York just lost $1 billion.”

The Treasury Department’s plan to cap salaries for most of the affected executives at $500,000 touches two New York City companies — American International Group and Citigroup — and will reduce state income tax revenue. The pay cuts for some executives will be as much as 90 percent.

Paterson cited the Treasury’s action as another reason that the state Legislature can’t rely on a Wall Street recovery to bail New York out of its financial woes, which include a $3 billion budget deficit in the current fiscal year. About 20 percent of state tax revenue had come from Wall Street before the economy soured.

Maybe if you had a fairer  and broader tax system this would never be a problem in the first place. When you depend on over half your “revenues” from less than 2% of the populace, well, let’s just say that this kind of lack of diversification would put you in the cross-hairs of the guys setting your pay in the first place. But never mind that logic, what ever happened to spending restraints?


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