NYC mayor sees deficit spiking to $1.6 billion

NEW YORK (Reuters) - New York City's Mayor Michael Bloomberg on Wednesday estimated that tax revenues had fallen enough to add as much as another $300 million to the deficit, pushing it to $1.6 billion.

Tax collections that rise and fall with the economy likely will drop by 15 percent, the independent mayor said at a news conference. That is a few percentage points more than his latest estimates.

Wall Street, the city's hometown industry that pays about one-fifth of every dollar earned here, has seen its profits crater because it over-borrowed to over-invest in risky assets.

Bloomberg, an independent who hopes his financial expertise wins him a third term, added he still was negotiating with the Democratic City Council, which wants to send homeowners $400 rebate checks he canceled because of the budget crunch.

"It's a negotiating process," Bloomberg said, explaining that more cuts would have to be made if the checks were sent.

(Reporting by Joan Gralla; Editing by Jan Paschal)