AIG currently has more than 100,000 employees and in New York State, AIG has 8,500 employees who earn an annual payroll of $897 million. On Monday, AIG shares slumped 42%.

Gov. Paterson also discussed the bankruptcy of Lehman Brothers, noting that it is not only troubling news for Wall Street, but also potentially for the State budget. "We are currently assessing the situation within the financial markets, and taxpayers should know we will take whatever actions are needed to protect the State's finances and the health of New York's economy. Furthermore, our debt portfolio and strong credit rating should remain unaffected."

The governor continues that clearly, we are entering uncharted waters. "Of the five largest, independent investment banks, only two are left standing today: Goldman Sachs and Morgan Stanley. Bear Stearns and Lehman Brothers have both collapsed, and Merrill Lynch has been subsumed into Bank of America."

Gov. Paterson notes that Bear Stearns, Lehman, and Merrill Lynch, had nearly 30,000 employees in New York and paid roughly 10% of Wall Street wages, and approximately 15% of all Wall Street bonuses. "Twenty percent of State revenue is derived from Wall Street. While the full impact of these events may not be known for months or even years, the fact that financial services firms that were able to survive the Great Depression, world wars, and the September 11th attacks collapsed under the weight of the current financial crisis is cause for grave concern. While New York State has already made significant reductions to its revenue forecast by $2.3 billion for the current fiscal year, there are risks going forward."

An anonymous source told GlobeSt.com--prior to the financing plan announcement—that it was hard to believe that names like AIG are out there as being in trouble. The source explained that perhaps if Lehman Brothers, for example, had been at this point before the Bear Stearns situation, the government might have been more actively looking to assist Lehman. "AIG might be the ones that waited too long," the source said. "While they have been aggressively taking steps lately, they may have waited too long, at least as perceived by the marketplace."

The source continued that "perception is a large issue, and this is more than a crisis of confidence." Many analysts were of the opinion that Lehman could not handle all of its liabilities, the source explained. "Things could get much worse. Until the write-offs stop, this credit crunch and crisis of confidence will continue. When the lenders start funding each other, the crisis will be over. Right now, there is such concern with capital adequacy, this is not happening. Events like Lehman only serve to lengthen the period of the crisis."

The division of budget will release its full mid-year update to the State financial plan in October with revised revenue and spending forecasts "that reflect recent events within the financial services world, we will continue to closely monitor the situation and update the public regularly as more information becomes available."