California finances praised but not upgraded by Moody's
A major Wall Street rating agency said Monday morning that Gov. Jerry Brown's latest budget proposal shows California's finances are on the mend.
But the agency, Moody's Investors Service, cautioned that California's progress could easily stall given the state's roller-coaster reputation.
"The state's improving economy, combined with recent tax increases and spending controls, has put the state on a path to large surpluses, although one that is typical of the boom-and-bust revenue and economic cycles of California," said a statement from Emily Raimes, Moody's vice president and senior credit officer.
Moody's did not upgrade California's credit rating from "A1," which leaves it as one of the lowest-rated states in the nation.
Another major ratings agency, Standard & Poor's, upgraded California's finances last week. The shift means it has moved out of last place (a position now held by Illinois) but remains second-to-last with a credit rating of "A."
Bill Lockyer, the California state treasurer, said the upgrade is proof that Brown and lawmakers have made "decisions that have been tough and painful but correct."
-- Chris Megerian in Sacramento
Photo: Gov. Jerry Brown delivers his State of the State address on Jan. 23. Credit: Rich Pedroncelli / Associated Press