Standard and Poor’s upgraded California’s credit ratings to “A” from “A-” thanks to its improving fiscal and revenue outlook. The agency cites Gov. Brown’s budget accomplishments as a key reason for its upgrade:
The upgrades reflect our view of California’s improved fiscal condition and cash position, and the state’s projections of a structurally balanced budget through at least the next several years. As part of Governor Jerry Brown’s recent budget proposal and multiple-year plan, the state would also largely retire its backlog of payment deferrals and internal loans. We view the alignment between revenues and expenditures as much improved and largely a result of policymakers’ heightened emphasis on fixing the state’s fiscal structure in the past two budgets.
We recently explained how Gov. Jerry Brown was able to balance the state’s budget after years of deficit problems.
The agency listed several other factors that influenced its decision:
- “Deep and diverse economy, which is capable of above-average growth rates partly because of its prominent higher education institutions and businesses in innovative sectors, which help position California as a leading venture capital recipient state.
- “Recent commitment to reaching alignment between ongoing revenues with recurring expenses while paying down budgetary debts.
- “Likelihood for regular enactment of timely budgets following a constitutional change requiring only a legislative majority for budget approval.
- “High but conservatively structured bonded debt.”