Fitch Ratings on Wednesday revised New York’s general obligation rating outlook to stable from positive, citing a deteriorating economic and financial environment. It affirmed the state’s AA-minus rating. The outlook change affects about $3 billion of outstanding GO debt. Fitch also revised the rating outlook to stable from positive on about $45 billion of other state-supported debt. Although New York has taken proactive steps to address projected budget gaps, the agency said in a press release that it does not believe the state’s rating is likely to improve within two years — which is what a positive outlook indicates — “particularly given the outsized role the troubled financial services industry plays in the state’s economy and revenue system.” New York derives about 20% of its revenue from the financial sector, which has been hammered in recent months. Gov. David Paterson told CNBC this week that the state’s combined budget deficit for the current year and next fiscal year could hit $12.5 billion.
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