ALBANY - A decline in tax revenues in a slowing economy will result in a $4.3 billion budget deficit, $651 million worse than projected in July, according to a budget report issued Tuesday.

Soon after the budget report was issued, Spitzer's transportation commissioner proposed $175.2 billion in borrowing over 20 years for repair and replacement of bridges, highways, rail and air facilities statewide.

That would be $100 billion more than already planned and would include major work on the Tappan Zee Bridge/Interstate 287 corridor, expanding or replacing the Peace Bridge in Buffalo to Canada, completing the I-86 highway across the Southern Tier, and expanding Route 219 in Erie and Cattaraugus counties, according to state Transportation Commissioner Astrid C. Glynn.

The borrowing plan has yet to be approved by the governor. It would require legislative approval as well.

Spitzer has said improving the state's infrastructure will help attract and retain businesses while spurring local economies.

For New Yorkers, the larger deficit announced Tuesday means smaller growth in revenues for the 2008-09 state budget now being crafted.

That will make it more difficult for Spitzer and the Legislature, in its election year, to follow through on plans to increase spending for schools and the public university systems, and to spend hundreds of millions of dollars for property tax relief and economic development.

As much as $500 million of the new deficit projection is blamed on reduced Wall Street bonuses to be paid in December to traders and investment bankers, a reflection of a troubled year in financial services.

“We should always make tough, but necessary choices in our budgets, but this midyear update makes clear that this year we will have no choice but to do so,” said state Budget Director Paul Francis.'

State Comptroller Thomas P. DiNapoli released his own report Tuesday that also identified declines in Wall Street revenues that he said directly and indirectly account for 9 percent of the city's budget and 20 percent of the state budget.

“This report, along with the governor's midyear update to the state financial plan that forecasts lower revenues, sounds a cautionary note for 2008 and underscores the need for prudent spending,” DiNapoli said.

Senate Republicans, who will try to keep their slim majority in the 2008 elections, question the new deficit's size.

The reports came as the Spitzer administration held the latest of several public meetings with the Legislature's budget analysts in which agencies and activists presented cases for more spending.

Among the proposals were:

- A plan to continue programs such as Operation Impact that sends state resources, including troopers, to cities with spikes in violent crime. Crime in the upstate cities targeted for Operation Impact have seen an 11 percent drop in crime this year, and violent crime involving a firearm dropped 17 percent, said Criminal Justice Services Commissioner Denise O'Donnell.

She said that since 1994 the majority of violent crime in the state has shifted from New York City to upstate.

She also announced that a statewide youth violence conference will be held for the first time this year.

- Spitzer proposes spending $2.2 million to cover the cost of emergency contraception at health care facilities and add to Medicaid coverage of Implanon and IUD birth controls.

- The administration wants to renovate the state's extensive parks system after a decade of flat funding by the state and reduced funding by the federal government.

Parks, recreation and historic sites Commissioner Carol Ash called for a massive, multiyear program costing at least $100 million a year for five or six years.

For example, Roberto Clemente Park on the Harlem River in New York City needs $16 million to repair an underwater support, Ash said.

- Co-chairman of Spitzer's economic development effort, Pat Foye, said the administration will soon announce a plan to reuse of the state's 300-acre Gov. W. Averell Harriman State Office Building Campus in Albany to work with seven nearby technology parks. Former Gov. George Pataki had proposed turning the government buildings into a research-and-development center in 2004.

The current state budget totals about $80 billion in state operating funds alone, or about $123.6 billion when all funds including federal money and capital borrowing are included. That's an increase of 8.2 percent in the all-funds budget and more than twice the inflation rate.

Francis had said he wants to keep state spending growth to about 5.3 percent.

The early budget reports are part of an accelerated budget process Spitzer and the Legislature approved to make the system more open. Regional public hearings on the budget are also planned.