May 15 (Reuters) - S&P:
* S&P says stock market gains lift revenues in California’s revised budget plan for fiscal 2018
* Says "higher revenue forecast has shrunk" California's baseline projected budget deficit by 75 percent
* Says California's "combined budget reserves would increase to 8.2% in fiscal 2018 under the revised budget from 5.3% of expenditures in fiscal 2017"
* Says California's "revised budget proposal reduces the overall deficit closing measures to $2.0 billion from $3.2 billion"
* Beyond budget year, California's fiscal position begins to erode according to its multiple-year general fund forecast
* There is also "perennial risk" related to the structure of California's revenue base, which is prone to volatility
* California's financial operations are currently balanced though its outlook on this front remains somewhat precarious