SACRAMENTO -- Two Wall Street bond-rating agencies gave Gov. Jerry Brown's budget proposal a clean bill of health on Tuesday, saying it would further California's fiscal recovery.
Standard & Poor's upgraded its financial outlook for the state to "positive," meaning there's a better chance of California receiving a credit upgrade in the next two years. The state's rating, which was raised to "A" one year ago, is still the second-lowest of any state.
"The outlook revisions reflect our view that Gov. Jerry Brown's [budget proposal] would build upon the improvements made to the state's finances in recent years," S&P analyst Gabriel Petek said in a statement.
In addition, Standard & Poor's praised Brown's decision to support the creation of a new rainy day fund for the state, which could stockpile spikes in revenue for use during economic recessions.
Fitch Ratings was also optimistic about Brown's $155-billion spending blueprint, saying it "sets out a reasonable and prudent course" for the state.
Even though California "has yet to fully recover" from its budget crises, the agency's report said, the governor's proposal is "another solid step toward fiscal recovery."