After nine hours of often-contentious debate, Rhode Island's House of Representatives in the wee hours of Friday morning approved a revised $8.7 billion budget bill that included a $12.5 million payment toward 38 Studios moral obligation debt.
"Can we have a little decorum and respect in our room tonight?," a flustered Speaker Nicholas Mattiello, D-Cranston, said minutes before the House voted 63-11 to send the budget to the Senate, where the finance committee is scheduled to take it up Monday.
The vote on paying the debt related to former Boston Red Sox pitcher Curt Schilling's failed video-game company was no surprise, and neither was the vitriol on both sides of the argument.
The fate of the $75 million of debt the state guaranteed to lure the video game company to downtown Providence from Massachusetts has been a hot topic since 38 Studios filed for Chapter 7 liquidation in 2012.
Amid the calls for making the payment were urgings for further investigation into the 38 Studios bond financing deal and even legal action against bond rating agencies who threatened to downgrade Rhode Island's general obligation rating.
Moody's Investors Service rates the state's GO bonds Aa2. Fitch Ratings and Standard & Poor's rate them AA.
Moody's rated the 38 Studios bonds A2 and S&P A when the Rhode Island Economic Development Corp. - now Rhode Island Commerce Corp. - issued them in 2010.
"Tell Moody's, go ahead, try it with our bond rating. You were the ones that rated this to begin with. We will sue you. You knock us down, we will sue you," an angry Rep. Karen MacBeth, D-Cumberland, said shortly before midnight. MacBeth, a leading voice advocating not paying the bonds, chairs the House Oversight Committee and wants to further investigate the bond deals, but her committee lacks subpoena power.
The House included a proposal by Gov. Lincoln Chafee for a ballot question to allow a $45 million bond to fund construction of a garage with retail space at the Garrahy Judicial Complex in Providence, but included a recommendation that construction not start until at least three of the parcels at the adjacent land that the the old Route 195 occupied are under a purchase and sales agreement.
Another bond question in the bill would allow $35 million - less than what Chafee had proposed -- to construct Rhode Island Public Transit Authority hubs at the Garrahy complex and the Amtrak station in Providence. Additionally, it includes a ballot question for $53 million in bonds for environmental and water initiatives, including $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.
The budget plan permanently eliminates the toll on the Sakonnet River Bridge on July 1, now set at 10 cents as a placeholder for what could have been higher future tolls. Instead, it includes a 1-cent gas tax effective July 1, 2015, which would be indexed to rise along with inflation every other year, to help fund maintenance of the Portsmouth-to-Tiverton bridge and other transportation infrastructure.
The plan would create a new fund for maintenance of roads and bridges and gradually redirect all vehicle-related fees, which currently go to the state's general fund, to that fund over the course of five years. The budget involves gradually moving all vehicle-related revenue to the fund, and using the fund to pay for all transportation infrastructure costs, beginning in the 2016 fiscal year.
