* AP headline…
Study: Fiscal ’scarlet letter’ costs state extra $80M
* From the story…
The study, conducted by DePaul University professor Martin Luby, a visiting researcher at the U of I institute, and Tima Moldogaziev of the University of South Carolina, set out to determine whether interest rates were even higher than other states’ rates in similar situations. They used a “’scarlet letter’ metaphor to note the hypothesized incremental risk premium demanded by investors on bonds that carry the name ‘Illinois.’” […]
“That’s above what the state should have been paying based on our worst-in-the-nation credit rating,” Luby said. “That’s one expensive reputation.”
OK, but we’re talking two-tenths of one percent, or about $16 million a year on average.
Yes, that money could’ve been better spent elsewhere, but it’s not a hugely gigantic pile of cash in the state’s overall budget.