Credit rating agencies across the nation gave Arizona the third lowest rating in the nation.

Richard Stavneak with the Joint Legislative Budget Committee, which are the state Legislature's accountants, said, despite the low rating, the state's credit has been improving.

"Our improving economy in terms of jobs and housing growth," Stavneak said. "Secondly, and I think the factor that most impressed them and turned us from a stable to a positive outlook, was our large budget balances, and they also noted that we have below average debt and pension liabilities."

The credit agencies are expressing concerns about a structural financial shortfall brought about the expiration of the one cent sales tax for education.