Standard & Poor's

Capitol Alert
The latest on California politics and government
May 22, 2014

Standard & Poor’s, a major credit rating organization, praised Gov. Jerry Brown’s revised 2014-15 budget Thursday, but warned the Legislature not to go beyond the budget and spend higher revenue estimates from its budget analyst.

Using the Legislative Analyst’s Office revenue projections that are several billion dollars higher than Brown’s “for the purposes of increasing ongoing spending”, S&P said in a report, “could endanger our current and positive rating outlook.”

The Legislature, however, appears to be doing exactly that this week as its budget subcommittees vote to increase spending on education and health and welfare services, based on the LAO’s projection. However, the final budget will be negotiated by Brown and legislative leaders.

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