Rendell budget aide sees warning in bond ratings

HARRISBURG (AP) — Pennsylvania’s top state budget executive says recent evaluations of the state’s finances by bond rating agencies bolster Gov. Ed Rendell’s push for sustainable sources of new revenues.

Budget Secretary Mary Soderberg said today the downgrade in the Moody’s Investors Service “outlook” for Pennsylvania illustrates how balancing the budget with one-time sources of cash will only exacerbate the state’s financial problems in the coming years.

Moody’s said Monday that Pennsylvania’s outlook is “negative” and will get worse if elected officials don’t adopt a fiscal plan that accounts for the disappearance of federal stimulus money in two years.

Standard & Poor’s says Pennsylvania’s rating could get worse if its use of nonrecurring revenues prevents the state from returning to “structural budget balance.”