Statement from Governor Cuomo on S&P's Upgrade of New York Credit Rating to AA+

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Highest Rating from S&P Since 1972 - S&P Action Completes “Triple Play” of Upgrades Following Recent Announcements from Moody’s and Fitch.

Albany, NY - July 23, 2014 - Governor Andrew M. Cuomo today issued the following statement regarding Standard & Poor’s Ratings Services’ upgrading of New York State's general obligation (GO) bonds to 'AA+' with stable outlook from 'AA' – their highest rating of New York since 1972. All three major credit rating agencies have upgraded New York in recent weeks and now each have the State one notch from their highest ratings. S&P’s action follows upgrades in June from both Moody’s Investor Services and Fitch Ratings.

“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. 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. Now, government is working for the people – the budget process has gone from a three-ring circus to a sensible blueprint for growth, taxes are down across the board and we are a national leader in job creation since the recession. The facts are clear – the arrows are pointed in the right direction in New York State, and the best is yet to come.”

Background
Standard & Poor's Ratings Services has raised its rating of New York State's general obligation (GO) bonds to 'AA+' from 'AA' and moved the state’s outlook to stable.

In its report, S&P says that the upgrade is based on their “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.”

The 2014-15 Enacted Budget holds spending growth below two percent for the fourth consecutive year, continuing a record of fiscal discipline that follows decades where state spending increased at a higher rate than inflation and personal income growth.

“The stable outlook reflects what we view as near structural budget balance, following four years of focus on expenditure restraint in key program areas with less controversial budget deliberations, which have translated to on-time budget enactment,” said S&P in their report.

S&P also points to unbudgeted revenues resulting from a series of legal settlements with various financial institutions, a history of conservative budgeting, solid debt and capital planning management and stable state budgetary financial trends, the result of state agency budget cutting, positive economic trends, and restraint in spending growth.

New York State's financial management practices are "strong," according to S&P’s own methodology. Their report notes that “the state has a long history of well-established budget practices and financial controls.” These include comprehensive multi-year projections and financial projections from the state's budget division that reflect current economic conditions. “We also believe that in recent years the state has developed a good track record of on-time budgets and social welfare and school spending restraint, after a long period of late budgets and not always timely responses to identified midyear budget shortfalls,” said the S&P in their report.

On June 16, 2014 Moody’s Investors Service upgraded New York’s credit rating to ‘Aa1’ with stable outlook, New York's highest rating from Moody’s since 1964. “New York has reversed historic financial management patterns and now benefits from a sustained record of on-time budgets, contained spending growth, and lack of reliance on external borrowing for liquidity purposes,” said Moody’s in their report. “The shift to more moderate spending increases signals a more sustainable approach to state finances.”

On June 20, 2014 Fitch Ratings upgraded New York's GO rating to ‘AA+’ with stable outlook from ‘AA’ based on “the fiscal management improvements made by the state in recent years and Fitch’s expectation that the state will continue to adhere to strengthened fiscal management practices going forward.”

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