Mumbai: New York state, reeling under a slowdown of the economy and a huge shortfall in state revenues following the Wall Street crunch, is weighing plans to sell off assets in what Governor David Patterson called a ''public-private partnership.''

In a televised speech, Patterson called an emergency session of the state legislature on Wednesday, warned of increased budget shortfalls in future and suggested possible sale of roads, bridges and tunnels to stem the growing budget deficits.

He cited 'private-public partnerships' – which in effect is the sale of state assets to private parties - as one way to stem the rot and save the sagging economy from Wall Street's woes.

''These times call for action, and today I promise you there will be action,"  Paterson said, adding the state cannot wait in hope that the problem will resolve itself.

In another radio show in Albany, Democratic speaker Sheldon Silver lobbied for a windfall profit tax on oil companies that would raise money to help low-income homeowners pay their heating bills this winter.

Sheldon said he would oppose spending cuts to schools, care for the elderly and affordable housing and called upon the federal government to increase aid to cities.

New York's revenues fell as the profit-tax collections from the state's 16 biggest banks nosedived from $173 million in June 1997 to a mere $5 million in June 2008 - a 97 per cent plunge.

Without going into the specifics of planned actions, Paterson said the deficit has  ballooned to $26.2 billion from $21.5 billion - a whopping 22 per cent increase - in just 90 days.

The state expects to face a budget deficit of $6.4 billion next year, up from the projected $5 billion.

The governor proposed a reduction in the state work force and deeper budget cuts beyond the 3.3 per cent he ordered after taking office. He also proposed to cap school property taxes at 4 per cent a year.

Paterson didn't specify spending cuts or ways of revenue enhancement that he would seek, but had suggested likely spending cuts of 5 per cent to 10 per cent for the year beginning 1 April 2009.

Paterson, 54, who had earlier reduced spending curbs of his predecessor Eliot Spitzer by $1.1 billion, said the state may lose as much as $700 million in revenues if Wall Street banks and brokerages cut bonuses for their highly-paid workers by some 20 per cent this year.

Paterson estimates that each 10 per cent reduction in bonus pay costs the state $350 million in tax revenues. He predicted that the state could lose as much as $1.7 billion from slumping profits for Wall Street's financial firms.

''The reality is that there is a tremendous effect that income taxes, property taxes, rising fuel prices, rising food prices and all of the debt that the state has undergone is going to have in terms of our governance,'' Paterson said.

Last year, New York's financial companies paid $33.2 billion in bonuses – down 2 per cent from the previous year's record $33.9 billion - with the average employee collecting $180,420 in bonus pay.

The governor also suggested sale of tax-free bonds to offer college students low-cost loans.

California tops in state debt, with New York coming a close second, Paterson said, adding, he was considering lobbying federal officials for aid to entities like Bear Stearns, Lehman Brothers and mortgage finance giants like Fannie Mae and Freddie Mac.

Paterson last week called on Congress to enact a second economic stimulus package that would give states funds for job-creating projects, like building roads and bridges, and boost its share of Medicaid, the federal-state health insurance programme for the poor, disabled and elderly.

New York State has $50 billion of outstanding debt.

Patterson's proposal for asset sale, although not new, shows desperate times calling for desperate measures.

In an ''infamous'' asset sale, former Governor Mario Cuomo sold Attica prison to a semi-independent state agency in 1991 to raise $200 million. The bond sale cost the state hundreds of millions extra over the next few years.

Mayor Bloomberg, however, praised Paterson's for his effort ''to tackle the serious problems we face.''

''The governor demonstrated that he is ready to stand up to the interest groups that will no doubt protest before the State House, just as they took to the steps of City Hall earlier this year," Bloomberg said.