MOODY'S CONFIRMS THE RATING OF 'A' TO THE STATE OF NEW YORK GENERAL OBLIGATION BONDS
MOODY'S CONFIRMS THE RATING OF A' TO THE STATE OF
NEW YORK GENERAL OBLIGATION BONDS
NEW YORK, Nov. 11 /PRNewswire/ -- Effective today, Moody's Investor Service has confirmed the rating of A' assigned to the state of New York general obligation bonds, in connection with the planned sale Nov. 13 of $225,650,000 bonds.
The state's general credit standing reflects its diverse and substantial economic base, but this source of strength is offset by structurally imbalanced finances and growing debt levels. Chronic financial problems weigh most heavily in New York State's credit evaluation. The structural imbalance has been exacerbated by the economic downturn, producing four consecutive years of deficit operations; the recent mid-year financial plan update now indicates an imbalance for the fifth year.
Although the 1992 budget made small inroads on the structural problem, real reforms have not yet been devised. While not yet quantified, the new revisions of forecasted tax and spending levels will produce increases in the expected gap for fiscal 1993, against the backdrop of gaps already expected due to the reliance on nonrecurring actions in the 1992 budget.
These developments heighten the need for structural reform in state spending practices. Four years of deficit reduction actions, both during the budget adoption process and mid-year, leave few options that can be achieved through marginal changes. The need to restrain growth in Medicaid is now even more pronounced. Options for the current year are particularly constrained by the need for implementation time before savings can be achieved.
The mid-year financial update only identifies the scope of the problem. Future credit evaluations will rest on the degrees to which proposed solutions, which are yet to be identified, are realistically achievable and provide the means for enduring fiscal balance.
Net tax-supported debt: $22,198,100,000
/CONTACT: George W. Leung, 212-553-0342, or Renee Boicourt, 212-553-7162, both of Moody's/ CO: ST: New York IN: SU: RTG SM -- NY066 -- 3164 11/11/91 16:48 EST