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
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)