California Treasurer Bill Lockyer gave a thumbs-up to Democrats for cutting back the state’s structural deficit, saying it would encourage Wall Street and give him better leverage to borrow.

“Finally, Wall Street and investors are noticing the appropriately tough but good news with respect to managing our state’s finances,” the Contra Costa Times quoted the treasurer as saying during a speech to the Sacramento Press Club on Wednesday.

Standard & Poor’s changed California’s outlook to stable from negative last week, saying the state’s cash flow appears unobstructed by its newly adopted budget.

The rating agency said in a statement that the negative outlook had been linked to the chance of a reoccurring cash deficiency that has likely been mitigated by the state’s budget.

Lockyer also said that he would not be surprised if revenues projected in the budget are a little short and end up triggering some cuts.

State Controller John Chiang said Monday that revenue has come in $351 million less in June and May than anticipated in the newly adopted budget.

The budget relies on rising revenue projections to make up a portion of its deficit later in the year. If they don’t materialize, triggers will force cuts.

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