UPDATE 1-NY gov: Legislators to weigh budget cuts on Oct 3

(Adds comments by Paterson, Senate majority leader, byline)

By Joan Gralla

NEW YORK, Sept 25 (Reuters) - New York Gov. David Paterson on Thursday said he asked legislative leaders to discuss more steps to safeguard the state's finances amid the "worsening economy and deteriorating revenues" in a meeting set for Oct. 3 in New York City.

The Democratic governor softened his stance from a day earlier, when he said he would recall the Senate and Assembly back into session to make more spending cuts before the November elections.

Paterson on Wednesday said the state's tax revenues have fallen by as much as $1.2 million since the spring as the credit crisis took a toll on Wall Street.

New York gets about one out of every five tax dollars from Wall Street.

"We will manage our financial risks responsibly and deal with our budget problems forthrightly, and, above all, truthfully," Paterson said in a statement, as he pledged not to match Wall Street's mistakes.

Senate Republican Majority Leader Dean Skelos on Thursday morning said he was willing to work with the governor but first wanted a clearer picture of tax revenues.

Skelos, who addressed the Association for a Better New York, opposed a recommendation of the Democratic-led Assembly to raise taxes on millionaires, saying it would drive them to move to other states.

A spokesman for Democratic Assembly Speaker Sheldon was not immediately available to comment.

Skelos also said the state needed two long-stalled revenue-raisers: collecting sales taxes on cigarettes sold by Indian reservations stores, and developing the Aqueduct Racetrack, located in the New York City borough of Queens, and Long Island's Belmont Park race track.

New York has already spent months evaluating bids for Aqueduct video lottery terminals from SL Green Realty Corp (SLG.N), Delaware North and Capital Play, whose partners include the Mohegan Tribal Gaming Authority and Victoria Racing Club.

The Assembly speaker, Sheldon Silver of Manhattan, has spurned plans to add slot machines at Belmont. (Editing by Leslie Adler)