(Adds Cuomo statement)
NEW YORK, July 23 (Reuters) - Standard & Poor’s said on Wednesday it had raised New York state’s debt rating by one notch, putting it just under a top investment grade, due to the state government’s stronger budgeting practices.
The ratings agency increased the state’s debt rating to AA-plus from AA, one level below the coveted AAA rating. The move came after its peers, Moody’s and Fitch, boosted their ratings for the state 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,” Standard & Poor’s credit analyst, David Hitchcock, said in a statement.
The upgrade will bolster the view of New York Governor Andrew Cuomo as an able financial steward ahead of the gubernatorial election in November. Under Cuomo, the state passed its 2014-2015 budget at the start of its fiscal year on April 1, meeting the deadline for passage for the fourth consecutive year.
That has helped the state shed its reputation for 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.
Cuomo, a Democrat who has been tipped to run for the U.S. presidency in 2016, trumpeted the upgrade.
“S&P’s decision to upgrade New York’s credit rating is another resounding affirmation of the progress that we have made in the past four years,” Cuomo said in a statement. “Before this administration took office, New York was losing jobs, consistently passing late budgets, and spending more money than the people of this state earned.”
Spreads between New York state’s general obligation debt and top-rated municipal debt, a measure of investor confidence, have fallen steadily since Cuomo took office in 2011 and are close to the lowest they have been since at least 1997.
The state was paying 0.32 percentage points more to borrow for 10 years than top-rated municipalities when Cuomo began his term as governor. That has fallen to just 0.07 percentage points, according to Thomson Reuters data. (Reporting by Edward Krudy; Editing by Diane Craft and Paul Simao)