Standard & Poor's Corp. and Moody's Investors Service made no change in their ratings of New York State debt on Friday following the release of the state's midyear budget report.
Standard & Poor's affirmed its Aminus rating and a positive outlook on New York State's $5.53 billion of general obligation debt, citing the state's ability to control spending in reaction to a reduced revenue forecast.
Moody's rates the state's GO bonds an A and is reviewing the impact of the midyear report, said George W. Leung, vice president and managing director of the state ratings group at Moody's.
The state has $27.5 billion of taxsupported debt, which includes leases and other appropriation-backed bonds. The state's fiscal year began April 1.
The state budget division's midyear financial update shows the state will end its fiscal year with a $14 million budget surplus, its third consecutive surplus.
"This report underscores the value of a conservative approach," budget director Rudy F. Runko said in a release.
Richard Marino, director of the eastern region for Standard & Poor's, said the midyear report shows the state is continuing a process of financial reform that it started in fiscal 1993. Although the passage of the 1995 budget was late, Marino said, "New York's midyear financial report once again reflects positive financial operations."
Leung said Moody's has "made note" of the weakness in state tax revenues, but that the weakness is balanced by "less-than-expected" spending. "Bottom line, the revenues are off, which is a negative, but the spending is off as well," Leung said.
The state projects general fund spending at $33.97 billion, a reduction of $281 million from July. The state projects receipts at $34.05 billion, a decrease of $267 million from July, the financial update reports.
Both rating agencies said that Wall Street losses have contributed to the state's falling tax revenues this year.
"In looking at tax receipts, the revenue shortfalls are mainly due to a weakening in the financial service sector and the less-than-profitable securities industry," Leung said.
A Standard & Poor's press release said that although the adverse financial sector news has caused the state to revise downward its economic assumptions, "New York is still expected to produce positive employment and wage growth for [calendar years] 1994 and 1995."
New York State added 134,400 jobs between November 1992 and August 1994, according to an economic report accompanying the financial update. The unemployment rate fell to 6.2% in September 1994, down from a peak of 9.4% in July 1992, the report said.
