Bond sale scuttled because of downgrades
SPRINGFIELD — Illinois officials have delayed borrowing $500 million for construction projects because the pension crisis makes the state's debt more expensive.
Abdon Pallasch, a spokesman for Gov. Pat Quinn's budget office, said a bond sale scheduled for Wednesday was postponed after potential bidders warned of an "unsettled" market.
Blame the ongoing quandary over how to reduce a $96 billion deficit in Illinois public-employee pension accounts. Standard & Poor's is the latest credit agency to downgrade the state's credit worthiness because of the pension mess.
S & P also gave Illinois a "negative" outlook -- reflecting the legislature's "poor track record" on solving the pension-liability problem.
Pallasch said the bond sale will be rescheduled after markets review the situation. The bond sale was to fund school and transit projects.
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