Albany N.Y. received a credit boost as S&P Global Ratings revised its outlook on New York State’s capital city to stable from negative thanks to enhanced revenues and cost-cutting measures.
S&P credit analyst Rahul Jain noted that Albany officials are projecting that the 2016 fiscal year will close with a $3 million operating surplus due to “significant” changes to staffing levels, hiring practices, salaries and healthcare costs along with increased consolidation of services. Albany’s adopted 2017 budget cuts operating expenditures by 2% and Jain notes that the city has found other revenue sources beyond property tax collections such as increased garbage collection fees. The city’s general obligation rating was affirmed at A-plus.
"The outlook change reflects our expectation for positive operating results in fiscal 2016, attributable to recent efforts to increase non-property tax revenues and reduce discretionary expenses, which we expect will boost available reserves to more than $1 million," said Jain.
S&P’s outlook change also reflected a change in New York State's support for the city's budget from an acceleration of payments of lieu of taxes for the Empire State Plaza government complex to unrestricted support for $12.5 million in "Capital City Funding” included in the 2017 budget. Jain said the state’s move indicates improved chances for future legislative support to help Albany support city operations hampered becasue the state government's presence means more than half of its properties are off the tax rolls. New York Gov. Andrew Cuomo’s initial fiscal 2018 budget proposal left out the $12.5 million of state support.
On the negative side, Jain noted that Albany has experienced “very weak” budgetary flexibility with an available fund balance for fiscal 2015 of negative 1% of operating expenditures. He said consistent political resistance has limited the city’s ability to raise revenues that could boost reserve levels.
Albany's population was 97,856 according to the 2010 U.S. Census.