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R.I. House debates paying 38 Studios debt, recesses to Wednesday with budget still unfinished

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By Philip Marcelo

PROVIDENCE, R.I. -- Just after midnight on Wednesday, after spending more than nine hours on other parts of a $8.2 billion state budget, Rhode Island lawmakers opened debate on the most polarizing issue in the tax-and-spending plan: whether or not to include a controversial payment towards the 38 Studios debt.

The debate, which lasted more than an hour, came after lawmakers had considered all but one of the articles in the House leadership version of the budget.

Rank-and-file lawmakers had their chance to introduce new articles.

State Rep. Charlene Lima, D-Cranston, proposed preventing any payments towards the debt left after the state's failed investment in 38 Studios, a now-bankrupt video game company founded by ex-Red Sox pitcher Curt Schilling.

Supporters of Lima's amendment argued that the 38 Studios debt, which totals more than $100 million with interest, was not the taxpayers' obligation because they had never voted to approve it in the first place.

Members of House Speaker Gordon D. Fox's leadership team argued that the ramifications of the state not paying the debt would far out weigh its benefits.

Each side stressed the significance of the relatively small $2.5 million payment called for in the budget.

"This is not half-pregnant time. This is Waterloo," said state Rep. J. Patrick O'Neil, D-Pawtucket. "This is the issue that is going to define how we are going to do things in this room. If you vote to fund this $2.5 million, you condone how 38 Studios came to light. You own the birth of this beast."

State Rep. Michael Marcello, D-Scituate, gave a fiery response minutes later.

He said it was a choice between making a politically expedient vote against the payment, or the right one to protect the state's financial reputation.

"I'm angry that we're here at this point, having to pay this back. I wish that it had never happened. But we are. And you got to deal with the cards you have been dealt. And it's not popular. But I'm not sent here to do the popular thing. I'm sent here to do the right thing," Marcello said. "Guess what? This is where the rubber hit the road. This is a tough decision. And if I lose my seat over it, so be it. But I'll be able to go to sleep at night knowing that I did my best to protect the taxpayers of Rhode Island."

After dozens more speeches, Lima's proposal was ultimately voted down, 20-54.

Fox then recessed the House until 2 p.m. Wednesday to consider remainder of the budget.


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