Source: Robert Weber, Thomas Jacobs, Moody’s, Sector Comment, August 8, 2018
On 1 August, the New York State (Aa1 stable) Comptroller’s Office announced that first half of calendar year 2018 sales tax collections grew 6% over 2017, the highest six-month increase since 2010. Sales tax revenues are a significant revenue stream for many counties and cities across New York, and sales tax growth also indicates that New York’s economy is improving. Additionally, the early effects of the federal tax law may be having a positive influence on people’s buying habits through the first half of 2018. As a result, these results are credit positive for many cities and counties in New York.
Deficit financing legislation helps distressed local governments but lacks teeth
Robert Weber, Thomas Jacobs, Gregory W. Lipitz, Naomi Richman, Leonard Jones, Moody’s, Sector Comment, August 8, 2018
New York’s (Aa1 stable) legislation allowing municipalities to issue bonds to liquidate operating deficits is an important tool for local governments mired in financial distress. However, accessing this deficit financing has produced mixed results, providing a one-time influx of cash but still leaving local governments vulnerable to poor management decisions.