Could the state budget problems lead to another downgrade from the credit-rating agencies? Some lawmakers are starting to worry – and they should. In addition to raising the state’s overall borrowing costs, a credit downgrade could potentially block the Legislature’s plan to borrow $1 billion to help shore up the state’s pension system. According to the legislation approved this session, the state can issue the pension bonds only if the total cost of issuance, including the net interest rate, is less than 5 percent, the Lawrence Journal-World reported. State universities also are concerned that another downgrade might increase their cost of borrowing for capital projects. – Phillip Brownlee
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