The projection is 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.
Both hits 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.
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.
The new analysis includes the stock market drop, lost revenue from transactions and projected lost income tax revenue from Wall Street jobs.
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.
State Division of Budget spokesman Jeffrey Gordon wouldn't confirm the numbers. He said officials will look to business tax and payroll tax figures expected in coming weeks to help estimate the damage.
Gordon said more than 27,000 employees have already lost or are at risk of losing their jobs because of decisions by major financial institutions to close or merge. Whether those jobs will be transferred or kept in some form may not be known for weeks.
