Illinois remains on brink of becoming first state rated junk, but does pass a budget

(Editor’s note: Updated to include Sunday night’s Illinois House-passed income-tax increase.)

Illinois, already the lowest-rated U.S. state, took a small step on Sunday to ward off a deepening budget crisis and the imminent risk of becoming the first state ever branded with a junk bond rating.

The state on Saturday entered an unprecedented third-straight fiscal year without a budget. The process had been crippled by the partisan impasse between its Republican governor and Democrats who control the legislature, but in a special session that extended to Sunday night, the Illinois House approved a major income-tax increase after several Republicans broke ranks with Gov.

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