PROVIDENCE, R.I. -- Days before the July 1 start of the new budget year for Rhode Island state government, a proposed $8.2-billion spending plan has cleared the General Assembly, with enough money to make the first required taxpayer payment for the 38 Studios debacle.
After clearing the state Senate Thursday evening on a 32-to-6 vote, the bill is now winding its way to Governor Chafee to sign, veto or allow to become law without his signature.
Chafee has not said what he intends to do, or when. But after the bill emerged from the House Wednesday night, after two days of high-pitched debate and finger-pointing, Chafee spokeswoman Christine Hunsinger said:
"The governor is pleased that the moral obligation payment is in the budget and hope(s) that the Senate votes to keep that payment in the budget. He is cautiously optimistic.''
Her comment reflected the intense debate that played out for weeks, over whether the state was required to earmark $2.5 million now for the first direct taxpayer payment -- due in May 2014 -- to the investors who bought the high-yield, state-backed bonds that financed retired Red Sox pitcher Curt Schilling's now-bankrupt video-game company.
Candidate Chafee strenuously opposed the $75 million investment, pushed by his predecessor Donald Carcieri, with General Assembly backing, in 2010.
Last November, the Chafee administration filed a sweeping lawsuit against Schilling and other key players in the $75-million loan deal that brought 38 Studios to Rhode Island, alleging fraud, negligence and legal malpractice.
But Chafee, who was elected as an independent but is now a Democrat, was himself the target of criticism during the House debate earlier this week.
"Who are we protecting?'' shouted Republican Rep. Joseph Trillo, R-Warwick. "Are we protecting the governor because he's the one that dropped the ball ... with no oversight? Is that who we are protecting? No wonder why he wants us to pass it. This thing really stinks.''
But hanging over the lawmakers heads was the June 17 threat wielded by the Moody's Investors Service that it would downgrade all of the state's bonds if the state defaulted on the 38 Studios moral-obligation bond. Moody's had at earlier points assured the financial community that Rhode Island honored its debts
The House budget debate spanned two days; the Senate debate, a fraction of that time.