As Cost of Borrowing Goes Up, the State Ups the Borrowing

by Amanda Griffin-Johnson In the Examiner last week, I outlined how Illinois’s credit rating fell as it continually failed to address the state’s dire fiscal condition. The state’s credit swap costs surpassed California’s, and now the costs have reached record highs. Bloomberg reports that the “cost of an Illinois credit-default swap has more than doubled since April 5 to a...

by Amanda Griffin-Johnson

In the Examiner last week, I outlined how Illinois’s credit rating fell as it continually failed to address the state’s dire fiscal condition. The state’s credit swap costs surpassed California’s, and now the costs have reached record highs.

Bloomberg reports that the “cost of an Illinois credit-default swap has more than doubled since April 5 to a record of 370 basis points, or $370,000 to protect $10 million of debt.” Even with the record high cost, the state still plans to sell $900 million in additional Build America Bonds later this month. To read the full Bloomberg article, click here. To learn more about ways to balance Illinois’s budget without borrowing or a tax hike, check out the Illinois Policy Institute’s Budget Solutions 2011 here.