California’s budget troubles have added to the financial challenges faced by the state’s school districts and local governments, Moody’s Investors Service said in a special comment this week.

“California local governments face major challenges in the current and coming fiscal years,” Moody’s said in a nine-page report authored by senior credit officer Dari Barzel. “The dramatic decline in home prices, falling sales tax revenues, and the state’s difficult budget position can affect their revenue streams and dictate hard budget choices.”

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