SACRAMENTO -- A Wall Street bond house raised California's credit ratings Wednesday, breaking the state's long-standing tie with hurricane-ravaged Louisiana for the worst credit marks in the nation.

Standard & Poor's raised its rating on the state's general obligation bonds from "A" to "A+," and it's rating on lease-supported debt from "A-" to "A." Standard & Poor's top bond rating is AAA.

Wall Street's two other major credit rating agencies, which have also given the state low marks, announced no change.

Standard & Poor's said it was raising California's ratings based on the state's $7.5 billion surge in revenue over January projections.

"The improvement being seen in California can be traced back to strong economic growth in almost all sectors and geographic regions of the state, as well as a spike in stock market and housing-related capital gains tax revenues," wrote Standard & Poor's credit analyst David Hitchcock.

But Hitchcock noted that since the Legislature has not yet adopted a new state budget it "remains to be seen whether the state will pursue fiscal discipline with its newfound revenues."

H.D. Palmer, spokesman for the Department of Finance, said Gov. Arnold Schwarzenegger was pleased with the upgrade.

"We think it's a clear sign that a strong economy and a sound budget are getting positive marks. ... To put it in football terms, it's definitely forward progress."

State Treasurer and Democratic gubernatorial candidate Phil Angelides, however, said the state's new credit rating was still relatively low and it showed Schwarzenegger still hadn't done enough to get the state's fiscal house in order.

"Even in a year when the state has received billions in unexpected revenue, Governor Schwarzenegger has failed to confront the structural deficit by proposing a balanced budget," Angelides said in a statement, referring to the way the governor proposes using unexpected revenue from the current fiscal year to cover next year's projected $2.5 billion deficit.

Palmer said the governor believes the timing of Standard & Poor's decision was important. It came just days after Schwarzenegger proposed spending $3.2 billion to pay down state debt and as the Legislature considers the governor's proposed spending plan.

"We have put a blueprint in front of the Legislature that achieves the kind of fiscal discipline that's valued by those who determine the state's creditworthiness. This is a validation from the financial markets that we should do what Governor Schwarzenegger has said and treat these new revenues carefully; we cannot guarantee how long they will continue," Palmer said.