A plan by Fitch Ratings to change how it grades municipal bonds doesn't go far enough and should involve only default risk, California Treasurer Bill Lockyer said.
In a letter Tuesday to Fitch, Lockyer said the state promised to pay off debt securities "on time and in full." He said the state's bond rating should reflect "the likelihood we'll keep that promise."
Fitch on July 31 unveiled a ranking system that would assess taxpayer-backed debt on a scale similar to the one it uses to evaluate the creditworthiness of corporate and sovereign bonds.
The new ratings still would consider economic conditions and a state's ability to raise taxes, which might limit upgrades.
Regulators have criticized Fitch and other rating firms, saying they overstated risks in assessing municipal bonds.