(Adds comment from state comptroller)
June 16 Moody's Investors Service raised New
York state's general obligation bond rating one notch to Aa1
with a stable outlook on Monday, citing sustained improvements
in fiscal governance and its recent economic recovery.
State lawmakers passed a $137.9 billion budget on March 31,
the last day of the budget year, marking the fourth on-time
budget in a row under Governor Andrew Cuomo. That had not
happened for nearly four decades and not under a single governor
since Nelson Rockefeller.
The upgrade brings New York's rating to its highest level
since the fiscal crisis of the mid-1970s, state Comptroller
Thomas DiNapoli said in a statement. It is now one notch below
Aaa, the highest possible rating.
The action "is a clear signal to investors that New York is
on the right financial path," DiNapoli said.
Moody's upgrade to Aa1 from Aa2 affects New York's personal
income tax revenue, sales tax revenue, and highway and bridge
bonds. Other appropriation-backed debt, state intercept programs
and moral obligation bonds were also upgraded by one notch.
New York has about $62 billion in outstanding debt.
Moody's also noted that the state has improved budgetary
reserves and reduced growth in spending. New York's high debt
burden is offset by below-average net pension liabilities,
The state still faces challenges, including a reliance on
New York City's financial services industry for economic
activity, an "expensive" environment for businesses and a
history of structural gaps that are usually closed with one-time
(Reporting by Abinaya Vijayaraghavan in Bangalore; Additional
reporting by Hilary Russ in New York; Editing by Joyjeet Das and