Improved Outlook for NY’s Credit Rating
Monday, August 27, 2012
A major credit rating service has issued a more optimistic view of New York's future, which could eventually boost its credit rating. Standard & Poor's revised its outlook for New York to "positive" from "stable" on Monday.
Gov. Andrew Cuomo said this revised outlook reflects “the state of the state’s budget is fundamentally stronger than it has been, and more rational than it has been.”
During a conference call with the governor, State Budget Director Robert Megna said if the state stays on this path, it could expect a AA+ rating, just one notch below AAA.
“We’re obviously very pleased with this change to our outlook and view it as a validation by an unbiased financial observer of the many reforms that the governor has put in place, and a reflection that new york is on the right fiscal path,” he said.
The governor stressed that he was very pleased with the change. “We made the necessary changes that we needed to make to prove that this state had a track record of fiscal responsibility,” he said, “It’s what we promisted the people in the election, and I believe it’s what we brought to the state.”
New York's double-A rating on general debt and double-A minus rating on debt secured by legislative appropriations remained unchanged.
The ratings agency says more fiscally conservative, structurally sound budgets in the last two years show New York appears to be on the right track.
During those two years, Cuomo, the Senate's Republican majority and the Assembly's Democratic majority agreed to reduce and then hold the line on spending. They also adopted a so-called "millionaire tax" expected to generate $2 billion and increased public college tuition.
Tax revenues have slowly, if tentatively, improved since the recession.
Menga also noted that S&P pointed out that Standards& Poor also noted that reforms in the areas of schools, Medicaid and pensions were also reasons for the better outlook.