California's finances received a bump from Moody's on Wednesday, returning the state's credit rating to its highest level since 2001.
The Wall Street rating agency praised California’s more stable budget process and a new effort to stockpile revenue for a rainy day.
"The state's financial position is rapidly improving," Moody's said in its announcement.
Despite the upgrade, California is still two notches below the average credit rating for a state, Aa1.
California's new credit rating, Aa3, leaves it tied with Arizona and Connecticut. The only two states worse off are Illinois and New Jersey.
State Treasurer Bill Lockyer hailed Tuesday's announcement as evidence of California's financial progress.
“California in the last three years has made great strides in managing its financial affairs," he said in a statement. "Moody’s action recognizes that progress and the strong, sustained fiscal discipline shown by the governor and Legislature."
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