Illinois Budget Tension Aggravated By Capitol Lockdown Due To Suspicious Substance

By Rachel Koning Beals Markets MarketWatch Pulse

Thursday's special Illinois House session, where members were to vote on an override of Gov. Bruce Rauner's veto of the tax hike and spending plan that could end the state's two-plus years without a budget, has hit a snag. The capitol was in lockdown and the vote delayed after a suspicious substance was reported found near Rauner's office, the Chicago Tribune and other media outlets reported. The Democrat-controlled House faces a close vote to override the veto and will need nearly all of the handful of Republicans who sided with the Democrats on budget passage to show up and vote to strike down the veto. It has taken a few days to gather the legislators back in the capitol. The state continues to risk becoming the first with a junk credit rating. S&P currently places it one step above junk. Moody's this week said it's continuing to review the state's current Baa3 rating for a possible downgrade despite "legislative progress towards a fiscal recovery plan based on permanent income tax rate increases." Even if the House matches Senate action in overriding the governor's veto, there's "the likelihood of further deterioration in Illinois's most pressing credit challenges: its severely underfunded pensions and a backlog of unpaid bills, which has doubled during the past year," Moody's said.

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