Thanks to the state’s failing budget, Chicago Public Schools were forced to borrow $112 million with almost-unreasonable interest rates

In this Friday, May 15, 2015 photo, students tie cloth strips on a fence outside the Nettelhorst School in Chicago. With the help of the students and other volunteers, Boy Scout David Fite decorated the street scene in preparation for the city's nearby Gay Pride Parade. The school is in the heart of the neighborhood known as Boystown. (AP Photo/Martha Irvine)

The state budget crisis continues to harm all of Illinois with harsh financial impacts, and Chicago Public Schools are finding themselves in the middle of the unbalanced books.

Videos by Rare

Recently, CPS were forced to borrow money at interest rates far higher than a typical government would permit.

Relying on borrowed money for the rest of the school year, the cost of the latest loan comes with an interest rate four times higher than a state government with good credit ratings would see, according to the Chicago Sun Times.

A week after borrowing $375 million from J.P. Morgan at a rate of 6.39 percent, CPS secured another $112 million from the same lender at 6.41 percent.

RELATED: The Illinois state legislature unable to reach a budget for the third year in a row

The school district has a junk credit rating, which is where Illinois’ credit rating is headed, as well, according to Fox News.

This means higher costs of borrowing, worsening the deficit and making it even harder for taxpayers to climb out of the fiscal hole where the state currently resides.

The Illinois budget stalemate poses a problem for CPS because of the short-term borrowing structure they operate with, a system largely financed through grant anticipation notes that are eventually repaid by state block grant money owed to CPS.

While the monstrous rates are an indication of the tight financial situation CPS is currently facing, its consistent permission and access to a borrowing market is a positive sign of lenders’ financial optimism for the school district, Matt Fabian, a partner at Municipal Market Analytics, told the Sun Times.

RELATED: CPS students & teachers will travel abroad for free this summer thanks to Boeing and United

That said, school officials and Gov. Bruce Rauner are still arguing over who to blame for CPS’ junk bond status.

The money CPS secured for this year will allow them to make a $721 million payment to the teacher pension fund on Friday, which many lawmakers and education personnel consider a feat on its own, given the state of Illinois’ disastrous budget.

“We’re in a death spiral,” Ted Dabrowski, Illinois Policy Institute’s vice president of policy said in an interview. “Illinois has the worst pension crisis in the nation and needs the boldest reforms. There is no doubt that junk bond rating [for the state] is on its way.”

What do you think?

A boat crashed ashore and the man who stole it only remembers “drinking a couple Four Lokos”

Police in Chicago are now required to undergo some unique extra training before they can join the force