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Moody's changes the outlook on New York State to positive

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Staff writer ▼ | August 28, 2013
New York StateMoody'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.

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.

New York finished fiscal 2013 with a $1.61 billion budgetary general fund balance (3.1% of receipts and net transfers), slightly diminished from a nearly $1.8 billion closing balance the previous year.

The closing balance included $1.1 billion in the Tax Stabilization Reserve, $175 million in the Rainy Day Reserve, $75 million in undesignated fund balance and $77 million in unrestricted reserved administratively designated for prior year labor agreements.

The state operating funds closing balance increased to $4.3 billion (4.9% of receipts and net transfers) from $3.8 billion in fiscal 2012. State operating funds include the General Fund, state-financed special revenue funds and debt service funds.

The state has had difficulty achieving the enacted budget revenue forecasts in recent years, and total receipts in 2013 fell $281 million below the initial projection. However, the state was able to maintain budget balance largely through restraining disbursements.

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