Outlook bright for California GO rating, S&P analyst says

SAN FRANCISCO Jan 31 (Reuters) - California's general obligation bonds could be on track for further positive ratings actions from Standard & Poor's, an analyst at the rating agency said on Thursday after it upgraded the debt one notch to A.

S&P Senior Director Gabriel Petek told Reuters there is the potential for further upgrades to the state's GO debt and positive revisions to its stable outlook if state officials seize on improving revenue and the state's economic recovery to help swing the state budget to a surplus.

Following through with fiscal discipline urged by Governor Jerry Brown would also be seen as a positive as it would help the governor's goal of reaching a budget surplus, Petek said.

The most populous U.S. state's finances have long been plagued by deficits. Brown has proposed that state officials use new revenue from voter-approved tax increases to bolster the state's finances while restraining spending to help swing the state budget to a surplus.