Tax report: NY economy still sinking, deficits up

NY — State budget officials say New York's economy is still sinking, with some of the wealthiest taxpayers moving out or making less and sales tax revenue dropping by a historic amount.

A report released Thursday shows those trends combining to create new multibillion-dollar deficits that will force changes in the 2010-11 budget just three months after it was adopted.

Gov. David Paterson and the Legislature adopted a $131.8 billion budget in April that filled a $17.7 billion gap. It increased taxes, including a higher income tax rate for top earners.

The state now faces a $2.1 billion deficit this fiscal year and a four-year gap $13 billion deeper than expected in April.

New York's recession is expected to end in the second half of next year.