Tomorrow is an important day for municipal bond investors as we’ll hear from two of the most controversial municipalities in the country. First, Illinois lawmakers will vote on reforms to their dreadfully funded pension system. The proposed plan includes raising the retirement age and reducing annual cost of living adjustments. Leaders claim these actions will save a combined $160B and will close the gap in pension funding (currently the worst funded plan next to Puerto Rico) over 30 years. These steps would be a credit positive to the lowest rated U.S. state, however, legislatures have hesitated in the past to change, and the reforms are not a given at this point. Second, we will hear from the judge overseeing Detroit’s record bankruptcy on whether the City is able to remain under bankruptcy protection. Detroit has been deferring interest payments on outstanding debt in favor of operating expenses, an action that creditors have challenged. Should the City be forced from bankruptcy protection, the operating budget for the City will be in flux, and a new chapter to the drama will begin.