Seeking to establish himself as a fiscally prudent leader, Governor Paterson is signaling that he will cut spending and eschew tax increases to weather the economic storm barreling down on the state.

The governor told a room of New York City business, real estate, and political leaders yesterday that the budget he inherited was “too big and too bloated” and insisted that state lawmakers tighten their belts and spend taxpayer dollars with greater care.

“Though our budget is sound now, it will be dependent on whether or not people get the message that we so vitally need to understand, which is that our economy is reeling,” he said yesterday. “The first thing we have to do is tighten our belts and be far more fiscally sound and prudent in terms of the revenues that we are spending that taxpayers comprise,” he added.

Mr. Paterson, who is legally blind, delivered the more than 30-minute speech from memory, at a breakfast at the Hilton Hotel in Midtown hosted by the Association for a Better New York.

With an overdue budget still unfinished in Albany, he turned his attention to next year’s finances, saying the state needs to do some “hard-core cutting” and trim between 5% and 10% of the budget off the top.

Mr. Paterson said future budget cuts would not come at the expense of New Yorkers who need services, middle-class residents, or the state’s millionaires.

He indicated that New Yorkers should brace themselves for a drop in state revenues, saying the state saw taxes from its 20 largest taxpayers, all corporations and banks, fall steeply within the last year. By the third week of March 2008, the state had received $72 million from those top taxpayers, down from the $533 million they had turned in by the same time one year earlier.

The governor said that once this year’s budget is approved, which yesterday morning he said he thought would happen later in the day “with a little luck,” he planned to speak to every state legislator about the economic problems facing the state.

“We are going to fight to address the issues in our state budget that need to be addressed,” he said. Mr. Paterson called for an examination of the state’s 640 public authorities, which he said consume billions of tax dollars, noting that a public authority control board regulates only 11 of them. The state’s enterprise zones, which were supposed to be spurring economic development, probably need to be investigated as well, he said, and he suggested that a property tax relief program, known as the STAR program, be retracted or changed.

He spoke of an exodus of New Yorkers from the state and said that since becoming governor, he has heard from a number of old friends who long ago left New York for other parts of the country, moving as far away as Texas and Nevada.

One friend in particular, who was in a skills training program for blind students with Mr. Paterson in Syracuse years ago, works in Manhattan but lives in western Pennsylvania, the governor said. Even though his friends love New York State, he said they told him they left because they could not find opportunity in New York and could not pay the taxes, Mr. Paterson said. New York City residents who enter the middle class are leaving the city and choosing to live in New Jersey suburbs over those in New York, he said.

“Whether we be upper middle class or dependent on social services, people are leaving our state,” he said. “The government has got to respond to that latest crisis.”

Mr. Paterson, formerly the state’s lieutenant governor, was sworn into office on March 17, a week after Governor Spitzer was first publicly linked to a prostitution ring. The start of Mr. Paterson’s administration was beset by problems after he disclosed that he and his wife had extramarital affairs, and he faced questions about improper spending of campaign funds in connection with his relationships with other women, but the furor has largely died down.

Mayor Dinkins, the first black mayor of the city who has known the governor since he was a child, sounded much like a parent when he said he swelled with pride during the speech.

“I can claim no credit, but I am so proud of him. I think he’s brilliant,” Mr. Dinkins said. “He’s important not just to youngsters who may have some impairment of vision or otherwise, but he’s important to all of us because he demonstrates what can be done.”

A former top aide to Mayor Bloomberg, William Cunningham, said he would be amazed if the Manhattan Institute, a conservative think tank, could find anything at fault with the first half of the Democratic governor’s speech, when he spoke about how to reduce state spending.

“That could have been written by the Manhattan Institute,” he said.