2019 Financial Condition Report

For Fiscal Year Ended March 31, 2019


2019 Financial Condition Report
For Fiscal Year Ended March 31, 2019

The debt burden of a governmental entity creates fixed costs that directly affect its ability to provide current services, as well as its long-term fiscal health. High borrowing levels may:

  • Indicate an inability to support current programs with current revenues.
  • Force future program reductions, increased taxation or additional future borrowing.
  • Limit the capacity to finance capital assets and grants.

New York State Ranks Second Highest in Outstanding Debt Nationwide

  • At the end of State Fiscal Year (SFY) 2018-19, the State reported the following debt levels: 
    • $2.3 billion of constitutionally-authorized, voter-approved general obligation debt, a decrease of 23 percent since SFY 2014-15.
    • $53.2 billion of State-Supported debt, an increase of 2.5 percent since SFY 2014-15.
    • $59.6 billion of debt reported in accordance with Generally Accepted Accounting Principles (GAAP), an increase of 3.8 percent since SFY 2014-15.
    • $64.7 billion of State-Funded debt, an increase of 2.4 percent since SFY 2014-15. This is the State Comptroller’s more comprehensive measure of the State’s debt burden, which includes certain obligations that are not recognized under GAAP or within the measure of State-Supported debt. It recognizes debt issued for State purposes, where the State makes payments with State resources, directly or indirectly, to a public authority, bank trustee or other municipal issuer. More than 96 percent of State-Funded debt has been issued by public authorities without voter approval.
  • In 2018, New York State had the second highest debt burden, behind only California. It was fifth-highest among all states in debt per capita.
  • At the end of SFY 2018-19, State-Funded debt outstanding per capita was $3,311. State-Funded debt was equivalent to 4.8 percent of state personal income.
State-Funded Debt Outstanding
Debt Service Expenditures in New York

New York State Projects Increasing Debt Levels in Coming Years

  • The SFY 2019-20 Enacted Budget Five-Year Capital Program and Financing Plan, as updated by the First Quarterly Update, projects that the State will issue 60 percent more debt than it will retire over the next five years, with:
    • $34.0 billion of new issuances of State-Supported debt; and
    • $20.4 billion of State-Supported debt retirements.
  • The State projects reduced statutory debt capacity over the next five years, declining to only $415 million in SFY 2023-24.
  • The State’s accumulated deficit financing ($1.3 billion in SFY 2018-19) is scheduled to be fully repaid by SFY 2025-26. This includes bonds issued by the New York Local Government Assistance Corporation (LGAC) and the Municipal Bond Bank Agency (MBBA). An additional $1.8 billion in debt outstanding is associated with issuances by the Sales Tax Asset Receivable Corporation (STARC) and the sale of Attica Correctional Facility in 1991.
  • New York issues State-Supported debt to fund certain capital purpose grants to other entities, which also results in State liabilities without corresponding State assets.
  • $1.5 billion in State-Supported debt service otherwise due during SFY 2019-20 was prepaid in SFY 2018-19. Such prepayments typically do not reduce the State’s interest costs, and artificially reduce reported year-over-year growth in both debt service and overall spending levels.
State Debt Issuance and Retirement

New York State Bond Ratings

At the end of SFY 2018-19, the State’s general obligation bond ratings were assigned as follows. These ratings are one step below the highest investment grade ratings.

  • AA+ by Fitch Ratings;
  • Aa1 by Moody’s Investors Service; and
  • AA+ by Standard & Poor’s (S&P) Rating Services.

These ratings are one step below the highest investment grade ratings. Ratings can influence interest rates and bond pricing. Higher ratings provide greater confidence to the investment community that the issuer is willing and able to meet the financial commitments of its obligations.