Gross tax-supported debt in New York fell to $62.22 billion from $62.56 billion in 2011, a 0.5 percent drop. Nationally, states' debts increased only 1.3 percent, slower growth than the 7 percent average over the past 10 years, the Moody's report said. That national growth rate was the lowest in 20 years.
"Legal debt limitations, state-level austerity spending, and anti-debt sentiment have reduced states' appetite for new money borrowing," Moody's said. "Additionally, debt plans have been influenced by uncertainty regarding federal fiscal policy and the impact of federal budget austerity on the national economy."
States typically borrow to finance capital projects like road work and infrastructure that have a long useful life.
Division of Budget spokesman Morris Peters said the decrease in debt was due to prudent policies.
"Governor Cuomo is committed to staying within the debt cap and has implemented reforms that are lowering New York's debt to personal income ratio to the lowest level in decades," Peters said in a statement.
New York remains a high-debt state. It has the second highest level of debt in the country after California. At $3,174 for every man, woman and child, the state has the fifth highest net tax-supported debt per capita.
Those figures alarm New York State Comptroller Thomas DiNapoli, who said in a report earlier this year that debt is eating up a bigger share of the budget compared to similar-sized states.