While California has been the poster boy for state budgetary woes, Illinois has moved into the top spot as the US state most likely to default on its debt. To avoid default more cuts are going to be necessary. See recent posts by me and BBH’s Marc Chandler on how this impacts GDP.
Also see the following two articles from last month
- Illinois is broke, and can’t pay its bills – msnbc.com
- Illinois Budget Woes Come to a Boil – WSJ.com
They will give you a better sense of why Illinois has moved into pole position.