The municipal bond market could see up to $100-billion in defaults over the next five years as state and local government debt woes get worse, according to a report from Roubini Global Economics.

The Wall Street Journal reported that this forecast would represent a significant increase over recent default costs, but falls short of the dire warnings about the muni market from analyst Meredith Whitney, who predicted “hundreds of billions of dollars” in defaults.

The Journal reported that The Roubini report, written by David Nowakowski and Prajakta Bhide , said that state and local debt problems aren't systemic in nature, nor will they infect the financial system.

Most of the defaults, the report stated, will involve special government projects and revenue-generating entities that aren't considered viable, according to the paper.

Defaults will continue to be isolated events,” the report stated. Avoiding a crisis will involve real austerity that has only partially been implemented thus far.”

Citing data from S&P, the Journal said that $2.65 billion in muni bond defaults were reported last year, down from $2.9 billion of new defaults in 2009.

However, the Roubini report indicates that recovery rates for investors on defaulted muni bonds are typically range at about 80 percent, far higher than for corporate bonds.