California's credit rating upgraded by Moody's

By Ed Mendel
UNION-TRIBUNE STAFF WRITER
May 22, 2004

SACRAMENTO – Moody's Investor Services yesterday raised California's credit rating from near-junk bond status, citing an improving economy and state budget actions under Gov. Arnold Schwarzenegger.

Although the move ends a three-year slide, California still has the lowest credit rating of any state. Moody's warned that "hard policy choices" are needed to close a big gap between tax revenue and spending that is being carried over from year to year.

Announcing the upgrade of California's credit rating to A3 from Baa1, Moody's analyst Tim Blake said an improving economy is not likely to produce enough new tax revenue for the state to grow out of the budget gap.

"We feel it is a fiscal challenge the state has to make some hard policy choices about," Blake said. "But we don't think there is much chance of the state running out of cash in the next two years."

more: http://www.signonsandiego.com/news/state/20040522-9999-1n22upgrade.html

imo.