Bond interest rate offers insight into delaying reform

Published 04/03 2013 05:07PM

Updated 04/03 2013 05:27PM

SPRINGFIELD -- Illinois is starting to feel the consequences of pushing off pension reform. The state sold its first set of bonds since a series of credit downgrades. It's going to cost a lot to pay back.

The state borrowed more money to pay for road projects. Illinois borrows money like this all the time, but the issue is paying it back.

The state sold $800 million in new bonds with an interest rate of about 4%. That's a lot higher than in the past because Illinois' credit rating is the worst of any state in the country so, it costs millions more to pay it all back compared to a state with a really good credit score.

But, there is some good news in all this. Our bad credit rating didn't hurt us as much as it could have.

That's something experts say Illinois can't afford right now. We already owe billions of dollars in unpaid bills, plus almost $100 billion in pension debt.

Experts say fixing pensions is the only way to get out of paying higher interest down the road. Otherwise, it will cost all of us more in taxes to pay future bonds back.

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