Wall Street’s Fitch Ratings has upgraded the credit rating on California’s general obligation bonds because of tax increases, revenue growth and improved fiscal management.
State Treasurer Fiona Ma announced the ratings boost from AA- to AA on Friday, after Fitch rated $2.3 billion in new bonds.
Fitch, one of Wall Street’s three major ratings agencies, said the upgrade reflected improved fiscal management, tax increases and revenue growth that will allow the Golden State to better withstand economic and revenue cycles.
“The state eliminated the overhang of budgetary borrowing that had accumulated through two recessions and continues to set-aside funds in the budget stabilization account,” Fitch said.
Ma said the ratings upgrade is an affirmation that the Legislature and the Governor are making the right decisions.
“Growing the State’s rainy day fund and fiscal discipline will keep the state resilient,” she said. “So long as we hold fast to a policy of fiscal restraint we will remain on the right track and as ready as we can be for whatever the global economy has in store.”
The state has over $100 billion of outstanding debt.