California, Illinois and the Cubs

My Dad used to joke that his favorite baseball team, the Chicago Cubs, was the strongest team in the league.

He concluded that this must be so, because always being at the bottom of the National League standings meant they had to hold all the other teams up. And then he'd laugh.

According to that reasoning, Illinois is currently the strongest state in the nation. And now even California is distancing itself from them.

Here's the breaking news in California Basks in S&P Rating Upgrade:

"Standard & Poor’s hadn’t even sent out word yet that it had upgraded California’s credit rating (to A from A-) before California State Treasurer Bill Lockyer released a statement Thursday praising the rating action. Quoth Lockyer:

It’s been a tough climb out of the hole. But the Governor and Legislature have provided strong leadership…. And the people, in approving the majority-vote budget and temporary tax increases, have shown wisdom and sacrificed. With this united effort, California has emerged with sounder financial management and structurally sturdier budgets and placed itself on a more sustainable fiscal path. S&P’s action recognizes this progress.

For its part, here’s part of what S&P had to say:

The upgrades reflect our view of California’s improved fiscal condition and cash position, and the state’s projections of a structurally balanced budget through at least the next several years. As part of Governor Jerry Brown’s recent budget proposal and multiple-year plan, the state would also largely retire its backlog of payment deferrals and internal loans. We view the alignment between revenues and expenditures as much improved and largely a result of policymakers’ heightened emphasis on fixing the state’s fiscal structure in the past two budgets. This has primarily consisted of programmatic reductions and reforms designed to generate budget savings because, until recently, strongly rebounding tax collections have not accompanied the economic recovery. Now the economic expansion is gaining positive momentum, however. In addition, the voters’ approval in November of temporarily higher statewide sales and personal income tax (PIT) rates positions the state to capitalize on burgeoning economic activity and income gains. We believe these factors have worked in concert to help the state reverse fiscal course.

California appears to be moving in the opposite direction of Illinois, its longstanding rival for the worst-rated state in the U.S. Illinois just yesterday took the rare step of postponing a planned $500 million general obligation bond sale, citing market conditions after a pair of recent negative rating actions."

Summing Up

It looks Illinois won't have California to kick around any more.

Maybe being the "strongest" team in the league isn't such a good idea after all.

The clock is ticking in the Land of Linclon and the Democratic majority will have an interesting time dealing with the state's financial problems in the face of strong opposition from its previously staunch political allies, the leadership of the state's public sector unions.

Let the fireworks begin.

Thanks. Bob.