Apr 29, 2014 1 min read

HARRISBURG, Pa. (AP) — Pennsylvania’s state policy makers are getting a warning from credit rating agency Standard & Poor’s.

Standard & Poor’s said Monday it could downgrade the state’s rating if it doesn’t see significant strides to structurally balance the budget and address long-term pension liabilities.

On the other hand, Standard & Poor’s says it could revise Pennsylvania’s negative outlook to stable if it sees enough progress on those tasks.

It says its current negative outlook reflects its view that the state’s financial flexibility is diminished by growing cost pressures, slow economic growth and sparse reserve cash.

It also notes that Pennsylvania faces a revenue shortfall in the current fiscal year and that Gov. Tom Corbett’s proposed budget for the fiscal year beginning July 1 relies on one-time gap closing measures.