State must pay out more in interest on short-term borrowing

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Another bit of bad budgeting news for California: The state was forced to hike interest rates on $10 billion in short-term debt it sold Thursday.

From Tom Petruno at the Los Angeles Times’ Money and Co. blog

The state, selling so-called revenue anticipation notes that will mature in May and June, set the yield at 1.50% on the May issue and 1.75% on the June issue -- up from initial estimates of 1.25% and 1.50%, respectively. The interest is exempt from federal and state income taxes.

...

The rates on this year’s deal are 0.25 percentage point above what the state paid on similar notes in September 2009.

-- Shane Goldmacher in Sacramento