"Illinois Effect" rubbing off on other municipalities

Published 06/25 2013 09:47PM

Updated 06/26 2013 10:54AM

SPRINGFIELD -- The state's financial woes have earned it a new nickname on Wall Street, and it's rubbing off on other municipalities which need to sell bonds. Investors call it the "Illinois Effect."

Since the state's credit rating has been lowered so many times, the state's debt is now considered high risk. Some investors are leery about buying bonds from a state having trouble paying its bills.

This feeling is rolling over to cities, universities and other bodies trying to sell bonds. Credit rating agencies have warned the state needs to solve its pension crisis and start paying off unpaid bills to get its rating increased again.

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