KBRA Affirms AA+ Rating for State of New York General Obligation Bonds; Outlook is Stable

15 Dec 2023 | New York

KBRA affirms the long-term rating of AA+ with a Stable Outlook for the State of New York's General Obligation Bonds.

The rating was affirmed because of the following key credit considerations:

Credit Positives

Broad and wealthy statewide resource base contributes to economic resiliency.
Demonstrated record of closing budget gaps using a combination of spending restraint and offsetting budgetary actions, including moving spending off-budget, delaying payments, and recategorizing costs.
Manageably low fixed cost burden enhances financial flexibility.

Credit Challenges

The State is reliant on PIT receipts, which historically comprise almost 2/3 of total tax collections. PIT receipts are economically sensitive, subject to uncertainties relating to remote working and tax migration, and closely correlated to the income of wealthy residents and the performance of the financial sector.

For Upgrade

Trend of stable to increasing state tax receipts indicative of economic resiliency and a trend of near-to-mid-term growth in the State resource base.
Continued adherence to spending caps and progress towards achieving long-term structural balance.

For Downgrade

Failure of the Governor and Legislature to act, when necessary, to maintain budgetary balance.
Significant depletion of reserves to fund operations, reliance on non-recurring revenues to maintain budgetary balance, or the use of deficit financing.

To access rating and relevant documents, click here.