In the long-running calamity that is state finances, it seemed like just another hiccup. Another rating firm this week lowered California’s bond rating, citing the state’s inability to balance its budget.
As always, the decision means the state will pay even higher interest rates on its debt – borrowing costs that will no longer be available to pay for other state services. The state’s debt load continues to grow, in part because borrowed money has been used to paper over budget shortfalls.
What was different this week was that State Treasurer Bill Lockyer came forward with a price tag on the latest decline in the state’s credit worthiness. He said the cost to the state could be $7.5 billion over 30 years.