From the New York Times….

Gov. David A. Paterson said on Friday that he would seek $2 billion in new cuts to the state’s current budget and challenged lawmakers to abandon Albany’s spending habits amid a deepening financial crisis.

And where are the cuts going to come from?

Many observers believe that when a special legislative session is convened after the election, lawmakers will be forced to cut the two largest areas of the budget, Medicaid and education. Hospitals and their workers and teachers are among the most powerful interest groups in Albany.

Also there is this from the LA Times….

Plans by several state and local governments to borrow in recent days have been upended by the credit freeze. New Mexico was forced to put off a $500-million bond sale, Massachusetts had to pull the plug halfway into a $400-million offering, and Maine is considering canceling road projects that were to be funded with bonds.