NEW YORK, July 23 Standard & Poor's raised New York state's debt rating one notch away from a top investment grade on Wednesday due to stronger budgeting practices in state government.
The agency increased the state's debt rating to AA-plus from AA, just one level away from the coveted AAA rating. The move follows similar actions from both Moody's and Fitch which boosted their ratings in June.
"This upgrade is based on our 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," said Standard & Poor's credit analyst David Hitchcock in a statement.
The upgrade will bolster state governor Andrew Cuomo's image as an able steward of the state's finances as he faces a reelection campaign in November. Under Cuomo, New York passed its fourth consecutive on-time state budget this year, something that had not happened for nearly four decades.
That has helped New York shed its reputation of fiscal dysfunction. Since 1978, the state budget had arrived an average of 36 days late, and in some years, budgetary debates ran into July and even August, according to the state's budget office.
Spreads between New York states general obligation debt and top-rated municipal debt, a measure of investor confidence, have fallen steadily since Cuomo came to office in 2011 and are close to the lowest they have been since at least 1997.
When Cuomo came to office the state was paying 0.32 percentage points more to borrow for ten years than top rated municipalities. Now that has fallen to just 0.07 percentage points, according to Thomson Reuters data. (Reporting by Edward Krudy; Editing by Diane Craft)