DALLAS - Standard & Poor's lowered its general obligation rating and underlying rating on Tucson one notch to AA-minus from AA, based on the Arizona city's continuing financial distress and falling revenues.

"Tucson has seen a recent downturn in sales taxes, a significant revenue source, and the city projects they will fall further in fiscal 2010," said analyst Matthew Reining. "Moreover, the city is experiencing structural financial pressure, with a city-estimated $25.8 million general fund difference between revenues and expenditures in fiscal 2009, as well as another budget gap to be addressed in fiscal 2010."

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