Illinois taxpayers have gotten an $8 million taste of just how expensive poor fiscal management can be.

In mid-July the state took out a short term loan (to be repaid within the next year) for $1.3 billion. Even though federal Treasury rates have been cut nearly in half over the past year, the state will end up paying about $8 million more in interest when compared to a similar loan taken out last year.

The key difference? Illinois has seen its credit rating plummet. One major credit rating agency ranks Illinois as tied for worst in the nation with California. The other two major rating agencies have Illinois ranked just one notch above California, although both have warned that further downgrades are likely for Illinois. The state has had eight credit downgrades since Pat Quinn replaced impeached Gov. Rod Blagojevich. That compares to three credit rating downgrades during Blagojevich's six years in office. At the time Blagojevich took office, Illinois had it's highest credit rating ever with one of the three major rating agencies.

Illinois is paying a higher interest rate despite a  current U.S. Treasury rate of about .26, or almost half of the 2009 one-year U.S. Treasury rate of about .5 percent. the loan the state took out carries a 2.11 percent interest. That’s almost a full percentage point hike, or more than 80 percent higher than the rate the state received on a similar loan in August, 2009. The short-term loan of $1.3 billion carries with it $19 million in interest—which is an $8 to $9 million premium that can be attributed to the state’s lower credit score.