In the aftermath of a hard-hitting recession, states and localities are still feeling the heavy pressures of decreased revenues, and as a result, many have raised fears of being unable to alleviate operating deficits in order to maintain a balanced budget for the 2012 fiscal year. High rates of unemployment have only worsened the problem. Particular municipalities, including California and Illinois, have gained increased attention lately for their more extreme budgetary deficits. Such attention in the press has understandably generated anxiety for municipal bond holders.
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