Albany And Trenton Have Few Rainy Day Funds for Economic Downturn -- But Hartford Is Ready

The financial cost of fighting the outbreak is modest, compared to the cost of lost tax revenue from travel, tourism and the retail sector. And while THAT decline will surely hurt state coffers, an even bigger hit looms if financial markets continue to tumble. States in this region, especially New York, rely heavily on taxes from wealthy residents and their investments. To ride out market downturns, experts say states should hold about 16 percent of expenditures in reserve. Connecticut almost meets that, with 15 percent — but New York has about 3 percent and New Jersey just 1 percent. With little help from these rainy day funds to close budget gaps, there could be deep cuts in education and healthcare spending and a slowdown in construction projects.