Moody's says Illinois may face structural deficit

June 3 Tue Jun 3, 2014 10:46am EDT

June 3 (Reuters) - Moody's Investors Service said Illinois could face a structural deficit as the U.S. state failed to extend income tax rates that ended on Dec. 31.

Moody's said the failure to extend the tax rates would reduce the state's revenue by an estimated $1.8 billion in the year starting July 1.

The state, rated A3 negative, could rely on increasing an already large backlog of unpaid bills to achieve balanced financial operations, reversing significant progress of recent years, the ratings agency said in a statement. (Reporting by Arnab Sen in Bangalore; Editing by Kirti Pandey)

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