HARTFORD (AP) — A national credit rating agency says Connecticut's two-year $41.3 billion budget restores revenue and spending predictability, but warns higher education will suffer from spending reductions.

In a report released Friday, Moody's Investors Service says the budget "adds to near-term operating challenges" for the University of Connecticut.

UConn says the budget cuts at least $143 million over two years, a figure that includes the UConn Health Center.

Moody's downgraded UConn's credit rating in July, citing the school's financial reliance on the state and its thin operating cash flow.

The same report warns the state "will continue to face significant fiscal challenges," including high fixed costs and more deficits starting in fiscal year 2020. Moody's says such pressures could "create significant credit challenges for local governments and higher education institutions."