Standard & Poor's raised California's general obligation
bond rating from A-minus to A this month. The upgrade comes just a week after
S&P downgraded Illinois' rating to A-minus, meaning The Prairie State now
has the lowest bond rating in the nation instead of The Golden State.
The rating agency has been encouraged by budget developments in California,
including recent spending cuts and temporary tax hikes voters approved in
November with Proposition 30.
"A more streamlined budget, the temporary taxes and a strengthening
economy present the state an opportunity to stabilize its finances for at least
several years," S&P stated.
But the agency also cautioned: "Over five to seven years, however, the
state's credit rating will depend more on lawmaker actions - in particular,
whether lawmakers stay the fiscal course charted out in recent budgets even
while Proposition 30 taxes are in effect and especially as they approach
expiration." (SACRAMENTO BEE, STATELINE.ORG)
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