Moody's Investors Service said a recent less-conservative analysis of California revenues increases the likelihood the Legislature will pass a budget with higher revenues and higher spending.

"The [Legislative Analyst's Office] analysis believes that stronger-than-expected capital gains growth will continue, and could portend a budget leaving the Legislature with higher revenue and spending than anticipated," Moody's said in a note Wednesday.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.