NewsRadio 920 WHJJ and the Associated Press

PROVIDENCE, R.I. (AP) — A business-backed public policy group says the cost to Rhode Island of not repaying the money owed after 38 Studios' bankruptcy would exceed the amount of the debt.

The Rhode Island Public Expenditure Council's executive director testified Thursday before the House Oversight Committee the question isn't whether the state would be penalized for a default, but by how much.

John Simmons says Rhode Island would face bond rating downgrades. RIPEC's analysis projects increased borrowing costs anywhere from $82 million to $167 million over 20 years. That doesn't include what he called additional costly ripple effects.

Gov. Lincoln Chafee says the state must honor the debt.

Rhode Island still owes some $87 million from the deal that gave 38 Studios a $75 million state-backed loan. Some lawmakers have been pushing default.