"We believe that, relative to the past fiscal year, uncertain assumptions for major portions of the budget balancing proposal make the state’s credit more susceptible to adverse economic or other developments," Standard & Poor’s wrote. 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. Ratings downgrades can increase the state’s borrowing costs for public works bonds and other cash needs…. S&P cited the usual list of reasons for California’s structural budget problems — a two-thirds vote requirement for budget and tax approval, heavy reliance on the stock market and ballot-box budgeting.

Read full article [here].
by Kevin Yamamura, The Sacramento Bee.

Posted: January 13th, 2010, by: admin. Categories: . Awaiting Comments.