S&P Boosts California's Credit Rating
The ratings agency Standard and Poor’s no longer believes California has the worst credit of any state in the nation.
S-and-P is upgrading California from an “A-minus” credit rating to an “A.” That leaves Illinois as the only state with an “A-minus.”
S-and-P dropped California to an “A-minus” three years ago at the height of the state’s budget crisis.
What’s more, S-and-P analyst Gabriel Petek said California’s rating might get another upgrade in the future. For that to happen, Petek said California lawmakers will have to be fiscally responsible and resist pressure to increase state spending.
“The state’s already in a better position to pay its debt obligations. But in addition to that, we think there’s potential for the credit to improve further if the results play out according to what the governor’s forecast shows,” Petek said.
Otherwise, he warned, California could face another credit crunch if the economy tumbles again and tax revenues fall short.
“What could put them in a weaker position is if they revert to the previous higher levels of spending – and then you had a revenue shortfall – that is what we think could cause another round of credit pressure,” Petek said.