S&P: California Comeback Due To Less Spending, Not Tax Gains
SACRAMENTO, Calif. (AP) - A new financial report says California's comeback due mostly to the state's spending reductions rather than recent tax gains.
The credit rating service Standard & Poor's reports Wednesday that California has recovered from the recession largely by controlling its expenses. That is contrary to the popular belief that higher taxes and an improving economy lifted the state out of deficit.
S&P analyst Gabe Petek says Gov. Jerry Brown and state lawmakers would repeat past mistakes if they rely on overly optimistic revenue projections rather than building a cushion and paying down long-term commitments.
The agency has upgraded the state's credit rating twice since 2013.
It backs Brown's call to avoid new spending despite pressure from fellow Democrats to use the surplus on social services, higher education and other programs.
Copyright 2015 The Associated Press.