Illinois Senate overrides governor's veto of budget package

Illinois could become America's first 'junk' state
Illinois could become America's first 'junk' state

The Illinois Senate overrode the governor's veto of a new budget package on Tuesday, bringing the state closer to resolving the crisis it's currently in.

The Senate had approved several bills on Tuesday morning but they were promptly vetoed by Governor Bruce Rauner.

After overriding the vetoes, the bills now return to the House where lawmakers will also need to override them.

On Sunday, the budget package passed in the Illinois House with bipartisan support.

The package includes an increase to the state's individual income tax rate from 3.75% to 4.95%. It would also increase the rate for corporations to 7%, up from 5.25%.

Related: Illinois inches toward budget as downgrade fears loom

If the House doesn't override the governor's veto of the budget package, the state would be unable to pay its bills and would again be at risk of having its credit downgraded to junk.

Illinois would be the first state to have such a rating.

Not getting the budget approved would also make the state more likely to default and the lowered credit rating could turn away investors, making borrowing costs rise even more.

The state currently has $15 billion in unpaid bills and a net deficit of roughly $130 billion.

The budget crisis came about because lawmakers were unable to pass a new spending plan before the start of the fiscal year. This is the third straight year Illinois hasn't had a complete budget.

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