Our hard-fought battle to restore fiscal discipline to state government, and to reverse a decades-long pattern of fiscal mismanagement and irresponsible spending, has produced huge dividends for the people of New York.
New York State now has its best credit rating in more than 22 years, thanks to an unprecedented double credit rating upgrade from a major Wall Street financial rating agency, Standard & Poor's. The upgrade also thrust New York from the second lowest in the nation to the 23rd best among states, the largest single improvement in state history and our third credit rating upgrade in just three years. The last time our credit was this good was in 1979.
While this was a tremendous vote of confidence in our prudent fiscal management, we must and will do even more to protect state taxpayers. For example, we recently used a special reserve fund I created to complete the largest, one-time elimination of debt in state history. This action reduced our debt service costs by $800 million and saved taxpayers $300 million in reduced interest costs.
Taken together, these achievements will help send a loud and clear message, both to the financial community and to the entire nation, that the Empire State has completely and dramatically reversed a decades-long pattern of fiscal irresponsibility.
A few years ago, New York State was nothing short of a fiscal disaster, complete with huge tax increases, consecutive credit rating downgrades, a massive $5 billion deficit and a skyrocketing debt burden. Today, all that is ancient history. We not only have the best credit rating in a generation, but we also have produced six straight budget surpluses, while cutting taxes and making record investments in education and the environment.
It's no surprise that New York now has more private-sector jobs in its history, both upstate and in the New York City region. In fact, New York beat the national average for private-sector job growth last year for the second straight year, something New York hasn't accomplished in 20 years.
In announcing its upgrade, the Standard and Poor's rating agency specifically cited New York's "consistent and successful efforts to improve its financial performance," as well as our "efforts to improve financial performance, definitively reversing a long-standing pattern of imbalance." Citing the combination of the $100 billion in tax cuts and fiscal restraint policies we have put in place, the agency said, "The fiscal disciplines adopted, in parallel with substantive tax cuts, have yielded solid results for the state."
Our success has stemmed in large part from our ability to control spending. During the last six years, we have nearly cut the average annual rate of spending growth in half, compared to the previous administration.
In fact, New York has also emerged as a national leader in keeping spending growth under control. Independent, bipartisan data show that our average annual General Fund spending growth since 1995 has been held to just 3.1 percent, less than half the average of the other 49 states during a comparable time period. Our All Funds spending has also been kept well below the national average.
This coming year, as billions of dollars in new tax cuts take effect, we must continue this impressive record of spending control. This is particularly important given the fact that many economic analysts are detecting signs of a gradual slowdown in the national economy.
Sweeping tax cuts and prudent, fiscally responsible budgeting practices have directly contributed to New York's ongoing economic resurgence and have placed New York in its best fiscal shape in more than a generation. The challenge we now face is to remain committed to this formula for success as we put in place the new state budget.