S&P warns against increased spending in California budget

The Sacramento Bee reports:

As Gov. Jerry Brown and the Democratic-controlled Legislature begin their annual budget talks in Sacramento, Wall Street weighed in Wednesday on the side of caution.

“For California, a future revenue slump isn’t only possible, it’s expected,” the credit rating agency Standard & Poor’s said in a report.

An over-optimistic assessment of the state’s future revenue growth, the report said, would be “the most significant identifiable threat to the state’s ongoing fiscal recovery.”

The report comes two months after Standard & Poor’s raised the state’s credit rating from A to A-plus, and its tone aligns squarely with Brown’s budget stance. The fourth-term governor, a relatively moderate Democrat, is under pressure from social service advocates and some lawmakers of his own party to restore services cut during the recession.

Those public pensions are expensive.