Rhode Island Gov. Lincoln Chafee

PROVIDENCE, R.I. — Rhode Island's $8.7 billion budget is on its way to Gov. Lincoln Chafee after the state Senate approved it by a 32-5 vote.

Moments after the vote on June 16, Chafee said he would sign the spending plan, which the House of Representatives approved the previous week. The Senate's finance committee OK'd the budget earlier in the day.

It includes a $12.3 million payment for moral obligation debt linked to the failed 38 Studios video-game company owned by former Boston Red Sox pitcher Curt Schilling, which Chafee called the right decision. "We must honor our debts, however painful," he said.

The General Assembly also forwarded several bond referendum proposals to voters for the November ballot.

One would float $125 million to renovate and expand the University of Rhode Island's College of Engineering complex. Another would provide $45 million to fund construction of a garage with retail space at the Garrahy Judicial Complex in Providence, but provides that construction cannot begin until at least three of the parcels at the adjacent land formerly occupied by the old Interstate 195 are under a purchase-and-sales agreement.

Another bond question would allow $35 million to construct Rhode Island Public Transit Authority hubs at the Garrahy complex and the Amtrak station in Providence. Lawmakers reduced Chafee's proposal by $5 million.

The budget also includes a ballot question for $53 million in bonds for numerous environmental and water initiatives, including a proposal for $18 million in improvements to Roger Williams Park and Zoo. Also included is a $60 million revenue bond for a runway extension at T.F. Green Airport in Warwick.

"I was pleased that the voter bonds I had proposed were included in this year's ballot," said Chafee, who will not run for re-election. "The bonds reflect important strategies to grow our economy through improving infrastructure and higher education; enlarging our arts and cultural economy; and protecting Rhode Island's environment."

Moody's Investors Service rates Rhode Island's general obligation bonds Aa2. Fitch Ratings and Standard & Poor's rate them AA.

The plan permanently eliminates the toll on the Sakonnet River Bridge on July 1, now set at 10 cents as a placeholder for possible higher future tolls. Instead, it includes a 1-cent gas tax effective July 1, 2015, which would be indexed to inflation every other year, to help fund bridge maintenance and other transportation infrastructure.

The plan would create a fund for maintenance of roads and bridges and gradually redirect all vehicle-related fees, which now go to the state's general fund, to that fund over the course of five years.

"From a transportation perspective, it's good, but overall you're creating new challenges because you're taking money out of the general fund," Gary Sasse, founding director of Bryant University's Hassenfeld Institute for Public Leadership, said in an interview. Sasse is a former director of the Rhode Island Public Expenditure Council and former head of state departments of administration and revenue.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.