Pennsylvania's historic budget impasse may be over, but Moody's Investors Service said it may be only a short reprieve.

Gov. Wolf said Wednesday he would not veto the latest $30 billion Republican budget plan, allowing it to become law. He had vetoed previous spending plans, leaving the state without a budget for 266 days.

"While the nine-month stalemate is over, it does not solve any of the ongoing questions over the state's progress toward structural balance over the long-term and therefore is likely to elicit a new stalemate for the next fiscal year beginning July 1," Moody's said in a statement Thursday.

The New York ratings agency picked apart the 2016 budget, saying it increases spending without approving the governor's proposed taxes to work toward fiscal balance. Moody's also criticized the budget's reliance on nearly $1 billion in one-time funds and said it does not include adequate pension contributions and "casts no light on the government's ability to reach compromise on its long-term fiscal challenges."

Moody's said it expects Pennsylvania's economy to underperform in the long term due to "weak demographics" and "poor financial conditions." The agency said the commonwealth's credit profile could take a hit over sharply higher pension payments in the coming years.

Moody's did applaud the increase in state funding to public universities and community colleges and the additional $3.1 billion in the budget that will allow school districts to operate for the rest of the year and help repay short-term debt they incurred during the budget impasse.

- Michaelle Bond