ALBANY - A new projection shows Wall Street's meltdown could cost New York state up to 40,000 private sector jobs and $3 billion in tax revenues over the next two years, two state officials said Thursday.

The revised numbers in the snapshot of worst case estimates was done Wednesday at the highest levels of New York's state government. The internal projection stated that New York job losses could reach between 25,000 and 40,000 private sector jobs and tax revenues could drop as much as $2 billion to $3 billion over the next two years.

The numbers are worse than Gov. David Paterson predicted just Tuesday when he said the state could lose some $1 billion in revenue because of upheaval in the financial sector.

Wall Street is a major economic force in New York state, generating one-fifth of the state's revenues each year.

The officials spoke on condition of anonymity because they weren't authorized to comment on the fiscal analysis.

Gov. David Paterson's office issued a statement later Thursday saying that there is no new projection for public release.

“It will be simply impossible to know the potential impact the crisis will have on employment or state revenues until it becomes more clear how recent events affect the economy as a whole, especially in the midst of such widespread reconfiguration of financial institutions,” said Paterson spokesman Errol Cockfield. “We will continue to review and report on revenues coming into the state, and will adjust the State Financial Plan next month to reflect updated information.”

The hits to revenue and employment would be substantial. The total New York state budget including federal funds is about $120 billion, and the state has about 7.25 million private-sector jobs.

The new analysis includes the stock market drop, lost revenue from transactions and projected lost income tax revenue from Wall Street jobs.

State officials used the model of the fiscal damage to New York after the Sept. 11, 2001, terrorist attacks. Then, Gov. George Pataki said it was the worst financial hit to New York since the Great Depression 70 years earlier.

Three of the five major U.S. investment banks - Bear Stearns, Lehman Brothers and Merrill Lynch - have either gone out of business or been driven into the arms of another bank. The two remaining banks, Goldman Sachs Group Inc. and Morgan Stanley, are under siege.

The officials caution that they are still trying to estimate how many jobs might remain in Manhattan.

“We're in some serious times,” Paterson said Tuesday. “It's going to get worse before it gets better.”