[New York Governor George] Pataki is a man facing record budget deficits but who simply refuses even to consider raising any taxes at all to help pay for government services. His friend Michael Bloomberg wants a commuter tax? Don't even think about it. The legislature wants to raise income taxes on individuals earning more than $100,000 a year? No way, José: that's "job destroying," that is. Rather, Pataki wants to borrow against future revenues which may or may not be coming New York's way from the 1998 tobacco settlement, and use the cash for routine operating expenses. Oh, and he also wants to put video poker machines inside New York's betting stores. Everything he does, on both the taxing and the spending sides of the budget, is fiscally disastrous: if Pataki were in charge of any Latin American country, the IMF would cut him off without a second thought.
The New York state legislature is not any better--in fact, it's worse. Check out also these posts by Jane Galt on New York City's dire straits. Some people in the US have called for the federal government to bail out the states; if behaviour like this is common, though, then perhaps deprivation may teach the right lessons, in the long run.