Standard & Poor’s this week upgraded the Campbell Union School District’s general obligation bonds to AA-minus from A-plus.

The agency also assigned an SP-1-plus rating to the district’s 2009 tax and revenue anticipation notes. The outlook is stable.

“The raised rating is based on our view of the district’s very strong tax base, economic indicators, and its history of maintaining good general fund reserves,” said analyst Li Yang. “Further supporting the rating is the district’s recent qualification for basic aid status.”

California’s wealthiest school districts are known as “basic aid” districts. They get their funding directly from local property taxes, rather than the financially troubled state’s general fund. Basic aid status also divorces the district funding from the average daily attendance figures that determine state aid and yield funding cuts for shrinking districts.

The basic aid status “lessens the district’s revenue uncertainty given the current difficult state funding climate,” the rating agency said in a release.

Basic aid kicks in when property tax per student eclipses state aid levels. The Campbell Union School District is located in Santa Clara County, home to many of the nation’s biggest technology companies. The school system includes parts of Campbell, San Jose and Los Gatos.

Standard & Poor’s said the district’s economic fundamentals are “very strong” with income levels at 142% of the national average and assessed value per capita is of $154,000. Debt levels are “moderate” at 2.7% of market value, the rating agency said.

The agency said the Campbell USD’s financial performance has been stable in recent years, and its unreserved general fund balance was “strong” at 9.3% of expenditures. The district, which will shift to basic aid funding next year, plans to use some of the reserves to cushion state funding cuts this year, but analysts said the school system aim to keep the reserve above 7%. 

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