Over at Neighborhood Effects, Eileen Norcross reports that New York is the first state to pass its budget, which allows us to see how it is using its stimulus dollars.

About $144 billion of the total stimulus was to be used by states to plug shortfalls and defray the need for tax increases. New York took the most it could get: $7.2 billion and according to David Schaffer of the Rockefeller Institute writing at Stateline.org, the state will raise taxes by $7 billion, “while sticking with spending patterns that could pose enormous fiscal problems when the stimulus runs out.
Read this New York Times article about the Unions’ reaction to Paterson’s request.
With its fortunes closely tied to the financial sector, how New York fares in the coming months, Schaeffer notes, provides a bellwether for stimulus effectiveness, not only for how the state manages its fiscal house, but for the federal bet that pump-priming is the antidote to recession.

For a summary of NY budget data go here.

Also, The Atlantic’s Megan McArdle talks about the troubles faced by New York governor David Paterson. She writes:

All states are suffering in this downturn, but New York has spent twenty years getting used to the lavish spending that taxes on financial salaries enabled. If you try to take it away, they feel that their civil rights are being violated–and they take their righteous rage out on the nearest politician to hand.
One of the groups he’s crossed is the public sector unions, from whom he is demanding a 3% pay cut (in line with what the non-union workers have taken). The union has responded with a furious public service campaign–but to no avail, because Paterson’s ratings are so low that even a vicious negative ad run can’t drive them any lower.