Compared to states with top credit ratings, Illinois will reportedly pay almost two percent more in annual interest on the $550 million it borrowed for infrastructure on June 16.
That adds up to tens of millions of dollars over the coming years.
“That’s a pretty steep penalty,” said Tom Schuette, a partner at Gurtin Fixed Income Management. “But when you consider where Illinois is at—with no budget, with a backlog of bills, with a slew of other issues—you could question whether or not that’s a steep enough penalty to pay.”
Illinois has the lowest credit rating of any state.