If California voters reject the two tax initiatives for school funding on the November ballet, Propositions 30 and 38, Moody's Investors Service would place school districts with weak liquidity on review for possible rating downgrade soon after the election.

In the report "California School Districts Face Mounting Credit Pressure If Tax Initiative Fails in November Election," Moody's says school districts with weak liquidity are not well positioned to handle the mandated trigger cuts in state funding should Proposition 30 be defeated and Proposition 38 also not pass.

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