Standard & Poor’s (S&P) Ratings Services last week upgraded New York’s general-obligation (GO) bonds to “AA+” with stable outlook from the previous rating of “AA.”
It represents S&P’s highest rating of New York bonds since 1972.
S&P’s action follows upgrades in June from both Moody’s Investors Service and Fitch Ratings, Gov. Andrew Cuomo’s office said in a news release.
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All three major credit-rating agencies have upgraded New York in recent weeks and now each have the state one notch from their highest ratings, the office added.
In the news release, Cuomo’s office cited the S&P report, which indicated it based the upgrade on its “view of a strong state budget-management framework as indicated by New York state’s recent history of improved structural budget balance with a strong focus on spending restraint and on-time budgets.”
The enacted state budget holds spending growth below two percent for the fourth consecutive year, “continuing a record of fiscal discipline that follows decades where state spending increased at a higher rate than inflation and personal income growth,” according to Cuomo’s office.
“The stable outlook reflects what we view as near structural budget balance, following four years of focus on expenditure restraint in key program areas with less controversial budget deliberations, which have translated to on-time budget enactment,” S&P said in its report.
S&P also points to unbudgeted revenues resulting from a series of legal settlements with various financial institutions; along with “a history of conservative budgeting, solid debt and capital planning management and stable state budgetary financial trends, the result of state agency budget cutting, positive economic trends, and restraint in spending growth,” according to Cuomo’s office.
The bond-rating upgrade indicates that New York’s finances are “headed in the right direction,” New York State Comptroller Thomas DiNapoli contended in a separate news release his office distributed on July 23.
It also reflects the state’s “recent history of on-time budgets, a well-funded pension system and spending restraint,” DiNapoli said.
Contact Reinhardt at ereinhardt@cnybj.com
