New York State will be well positioned to withstand a potential moderate economic downtown and federal funding uncertainties if lawmakers adopt Gov. Andrew Cuomo's proposed 2018 budget, according to S&P Global Ratings.
S&P analyst Eden Perry wrote in a report Wednesday that the $152 billion budget proposal shows a commitment to structural balance while positioning the state for proposed changes in Washington D.C. to Medicaid and the Affordable Care Act as well as federal funding cuts. Perry also credited the budget with being the seventh consecutive state fiscal plan that maintains spending growth below 2% and containing no one-time revenues for balancing.
"As with many other states, New York would face difficult fiscal and policy choices depending on the changes that ultimately come down from the federal level," said Perry, "However, we believe that the proposed budget would allow the state some time to manage through the changing federal funding landscape."
Perry noted that the state's debt position remains "manageable" with the 2018 $14.5 billion capital spending plan featuring $7.1 billion in bond issuance. The planned borrowing is highlighted by $2.1 billion in capital commitments for transportation projects and $1.8 billion for education. The state expects to retire $4.4 billion of debt in fiscal 2018, around a 2.6% increase from 2017.
"Although combined tax-supported debt levels remain moderately high, we believe New York's debt ratios are within the range of other states in the Northeastern U.S.," said Perry. "Its debt position has declined for five consecutive years and we believe the current plan is manageable and won't unduly affect the state's debt position."
