A Wall Street credit rating agency on Wednesday upgraded Illinois’ credit outlook from negative to stable, citing an unexpected revenue bump in April and a “plausible and achievable 2020 budget plan.”

Fitch Ratings said the budget leaves the state “better positioned from a fiscal perspective, and the potential for a rating downgrade in the near-term has receded.”

But the rating agency warns that recent gains are “somewhat tenuous” and sustainability relies on what the state enacts in the next several years, particularly around Gov. J.B. Pritzker’s preferred graduated income tax ballot referendum.

The rating agency says that a proposed graduated income tax amendment on the 2020 ballot — allowing the state to base different tax rates on income levels — could raise substantial revenue “but faces a long and uncertain path before implementation.”

“The credit implications of the November 2020 vote on the income tax amendment depend on whether Illinois uses any increased revenues to address structural budget challenges, or if the state can adequately adjust its budget to work towards structural balance if the amendment fails,” the agency said.

Long-term liabilities remain a problem for the state, Fitch notes. The state has “limited flexibility” in changing the existing pension obligations.

“Illinois’ operating performance, both during the Great Recession and the subsequent economic expansion, has been very weak. The state will be challenged to rebuild its financial resilience given the persistence of a structural budget gap and the sizable accounts payable backlog,” Fitch notes.

And going forward, Fitch says, an upward rating momentum for Illinois is “unlikely” until the state addresses its pension liabilities and the bill backlog, which remained at $5.9 billion on Wednesday, according to the Illinois Comptroller’s office.

Deputy Gov. Dan Hynes said the Fitch upgrade shows “Illinois is already much stronger than we were a year ago and it’s refreshing that Fitch is recognizing the good news and progress we’ve made so far.”

“We know we have a long way to go, but we are committed to improving our long term fiscal stability and building an economy that works for everyone,” Hynes said in a statement.

In a hugely unexpected bit of good news — due to a $1.14 billion increase in state revenue in April — Pritzker’s administration in May said the state would be able to make its full pension payment next year, delaying a hugely unpopular “pension holiday” by at least a year.

The $4.1 billion brought in by individual and corporate income tax was up $1.14 billion from April 2018 and was also more than $1.5 billion more than the administration projected for April 2019, the state’s Department of Revenue said in May.

The department said the stock market, federal reimbursement for Medicaid, the elimination of the federal state and local tax deduction and changes in the federal tax law meant that many taxpayers didn’t withhold sufficient taxes through payroll deductions, backloading their end-of-year tax payments.