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Illinois Lawmakers Fail to Pass Pension Reform – Bonds Downgraded

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June 2013

The state’s outstanding general obligation bonds were downgraded from “A2” to “A3” by Moody’s Investors Service, following the failed attempt by the Illinois Legislature to pass Pension Reform. The ratings agency said in a statement that: “The negative outlook reflects our expectation that Illinois’ pension liabilities will continue to grow, in the absence of substantive reform efforts, and that annual funding requirements will become unmanageable, particularly if no steps are taken to address the loss of revenue from expiring income tax increases in 2015.” Legislators continue to explore pension reform solutions, and continued meetings have been scheduled for the summer to come up with a legislative solution. 

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