By Kim Kalunian, WPRO News
As anticipated, the debate over whether or not to repay the 38 Studios bonds was a lengthy and passionate one. It was shortly before midnight when the Rhode Island House of Representatives started the discussion about repaying the loans guaranteed to the defunct gaming company through the EDC.
Earlier in the night, the House voted to kill the EDC’s Jobs Creation Guaranty program, which granted 38 Studios the $75 million loan back in 2010.
House Minority Leader Brian Newberry urged his fellow representatives to vote against the repayment, saying that those who vote to repay the loans “don’t have a fig leaf to cover” their decision.
Rep. Patrick O’Neill (D-Pawtucket) said that some are worried what kind of message it will send if Rhode Island fails to repay the loans. He said the budget’s allocation of $50,000 to study the impacts of the default is comparable to not paying at all.
“What kind of message does that send?” he asked about the money earmarked for the study.
Some contested the semantics of the debate.
“We’re not defaulting on anything,” said Rep. Michael Chippendale (D-Foster), saying that to “default” would mean the state would not repay something we were obligated to. These loans, he said, were simply moral obligation bonds.
“I’m from New Jersey, I don’t scare easily,” said Rep. Spencer Dickinson (D-South Kingstown). “You want to scare Moody’s, tell them we’re not buying anymore bonds ever.”
Rep. Mike Marcello (D-Scituate) favored repaying the bonds, saying that representatives didn’t vote for 38 studios, they voted for the EDC’s $125 million Job Creation Guaranty program.
“I wish that it never happened,” said Marcello. “I’m not here to do the popular thing, I’m here to do the right thing.”
“If I lose my seat over it, so be it,” he said, adding, “To suggest that if you don’t pay your debts everything is going to be OK is just wrong.”
Rep. Charlene Lima's article to prevent the state from paying back the loans was voted down. The House did not consider Article 1, which contained the $2.5 million earmarked to the bond repayment, on Tuesday night.
