After a series of credit downgrades during our budget crisis last year, the score stabilized a bit during the down time. Now, it’s been nudged back to “A-” by S&P today.
Citing serious risks in Gov. Arnold Schwarzenegger’s budget plan, Standard & Poor’s on Wednesday downgraded California’s national-low credit rating from “A” to “A-minus.”
The ratings house sees a gloomier picture this year for California’s finances because “the state’s options have narrowed considerably” and Schwarzenegger has made risky calculations in his latest budget plan to bridge a $19.9 billion deficit.
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S&P cited the governor’s reliance on “extraordinary federal cooperation” and voter approval of $1 billion in transfers from mental health and child development funds as risky assumptions. It also said the unlikelihood of the Legislature reaching a quick deal on “deep cuts as proposed” could hinder the state’s finances. (SacBee)
This comes the same time as Arnold is putting out feelers for a trip to DC to beg for cash for the state and Arnold starts talking about slapping increased fees and fines on anything that appears interesting. I hope you didn’t have plans for a free Family Fun Day at the California Science Center anytime soon.
Of course, you and I know that California is constitutionally required to pay debt before it pays anything else. Apparently the credit agencies aren’t so sure about that.