California gained a positive credit outlook following a voter-backed tax boost, an improving economy and previous budget cuts that helped to stabilize its finances after years of shortfalls, Fitch Ratings said.
Fitch changed the state’s outlook to positive from stable yesterday, ahead of California’s sale of $2.7 billion of bonds beginning March 12. The move means the rating company may raise the state’s score, currently A-, or seventh-highest.
The positive outlook followed a boost for California’s credit rating by Standard & Poor’s on Jan. 31. S&P raised the state’s grade one step to A, its sixth-highest level. It was the first increase since 2006 and followed Governor Jerry Brown’s budget proposal that he said would leave California with a surplus for the first time in almost a decade. He persuaded voters in November to temporarily lift income and sales taxes.
“All credit to the legislature and governor, who have forsaken the tooth fairy for fiscal discipline and honest, structurally sound budgets, and to the people for their wisdom” in passing the tax measure in November, said Tom Dresslar, spokesman for California Treasurer Bill Lockyer.
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