Reporting on Thursday, the news service revealed that Gov. Pataki dismissed the proposal, which Bloomberg had hoped would raise an additional $1 billion to help close the city's budget gap, arguing that the planned levy would discourage businesses from making much-needed investments in New York.

'Putting a new tax on people who would come to work here is not a way to attract jobs, it is not a way to attract investment,' he told reporters on Thursday.

According to Reuters, the State Governor did not completely slam the door on the measure designed to make commuters pay for the city services that they use, but warned that Bloomberg will need to make his case in Albany, and suggested that he should not ask too much from the state.

'The Mayor will have to come to Albany, he'll have a range of options and proposals that he believes can help him deal with the city's fiscal crisis,' he explained.

However, New York City cannot tax commuters without the permission of the state authorities, making it unlikely that the measure will pass, at least in its current form.