In the next recession, the Texas Miracle would prove more buoyant than the California Comeback, writes Moody’s in a new report.
A fiscal-stress test by the credit ratings agency ranked the Golden State second-to-last among populous states for ability to mitigate the next economic crises. Missouri, Texas and Washington all respectively placed in the top three. California’s weak rating came from high revenue volatility and low budget reserves and fiscal nimbleness.
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While California’s boom-and-bust revenue cycle is no secret, Moody’s analyzed single-year revenue declines since 1990. California saw its biggest single drop in 2002, when the tech bubble popped and state revenue fell 17.2 percent in a single year.View Article