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Lawmakers' passage of "rainy-day fund" legislation championed by Gov. Jerry Brown won plaudits Monday from Moody's Investors Service, a major credit rating house.

"This credit positive development reflects the new emphasis that California...places on building reserve to cushion its finances from economic downturns," Moody's says in its periodic bulletin on credit trends.

The bulletin, echoing Brown's words, notes that California has had many more deficit budgets in recent years than positively balanced ones, citing the state's historic tendency to spend windfall revenues rather than save them.

The reserve fund would absorb some state revenues and make them available during an economic downturn. Last week's measure, ACA 1 in the second extraordinary session, was approved overwhelmingly by the Legislature, but still must be ratified by voters in November. Moody's current credit rating for California is A1 stable.

PHOTO: California Gov. Jerry Brown and then-Assembly Speaker John A. Pérez appear before the Assembly Budget Committee on April 28 to talk about ACA 1 in the second extraordinary session.



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