Governor Cuomo issues statement on Moody's revising New York's outlook to positive

By WBNG News

Governor Cuomo issues statement on Moody's revising New York's outlook to positive

August 22, 2013 Updated Aug 22, 2013 at 5:01 PM EST

(WBNG Binghamton) New York Governor Andrew Cuomo on Thursday issued a statement on Moody's Investor's Service revising New York's outlook to positive.

The Governor's statement reads:

"Today's action by Moody's Investors Service to revise our State's outlook from stable to positive is another strong affirmation of the progress we have made to put New York's fiscal house in order. After years of late budgets and legislative gridlock, we have been able to show that New York State is working again and confidence in government is being restored. Since taking office, my administration has delivered three on-time and balanced budgets, controlled government spending, and cut taxes for the middle class to their lowest levels in 60 years. New York has gained over 300,000 private sector jobs with more being added every day, and this momentum is leading us to fiscal stability and economic prosperity."

According to a news release issued earlier on Thursday:

Moody's Investors Service has changed the outlook on New York State to positive, and affirmed the Aa2 rating on New York's $3.5 billion of General Obligation Bonds. Moody's has also affirmed the ratings on all outstanding appropriation-backed and G.O.-related bonds as well as various state intercept programs.

The positive outlook reflects improvements in the state's economy, governance, financial position and fiscal outlook that, if continued, would allow the state to improve its reserves and draw closer to structural balance.

New York's Aa2 general obligation rating reflects the relative strength and recent resilience of its economy; governance constraints including a history of late budgets and limited executive authority to reduce appropriations; a financial position that has improved but remains below average; a moderate combined debt and pension burden; and sound debt management and frequently updated financial forecasting. The rating incorporates notable improvements in the state's economy, governance, financial position, and budgetary balance over the past three fiscal years, as well as remaining risks, including weakness in the financial services sector, continued revenue volatility, and relatively low fund balance and liquidity positions.

STRENGTHS:
•Broad-based, mature, and wealthy state economy that attracts a highly-educated and global workforce, and has shown above-average resilience during the recovery
•Long track record of closing annual budget gaps, and more recently, with more structurally balanced solutions
•Accumulated rainy day reserves have remained stable for 10 consecutive years, providing cash flow flexibility, although at comparatively low levels
•State pension system is well funded compared to other states and unfunded liability is modest, placing state's fixed costs at the 50-state median relative to total revenues
•Recent reversal of history of political gridlock, reflected in timely budgets, implementation of spending controls and move toward structurally balanced budgets.

CHALLENGES:
•Revenue volatility stemming from the state's dependence on the financial services sector and income taxes, posing risks to budgetary balances, liquidity, and financial stability
•Relatively low fund balances provide minimal protection against revenue volatility
•Above-average state tax-supported debt burden partly reflects a past record of deficit-related bonding

To submit a comment on this article, your email address is required. We respect your privacy and your email will not be visible to others nor will it be added to any email lists.