CHICAGO — Illinois is gearing up to issue $1 billion of new-money debt before the end of the year to support its $31 billion capital budget, deals that are taking shape amid a fiscal picture that is more stable than a year ago after an income tax increase but facing renewed headwinds.

The latest negative report o came Monday from the Civic Federation of Chicago, local government review group, warning that the state faces a $5 billion operating deficit by the end of fiscal 2012 even with limited spending increases and revenue from the income tax hike.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.