38 Studios debt to top RI budget debate

By Associated Press

PROVIDENCE — The debate over whether Rhode Island should pay the debts associated with its failed investment in 38 Studios will likely dominate legislative action on an $8.2 billion state budget proposal.

The Rhode Island House is scheduled to debate and vote on the spending plan Tuesday.

Lawmakers have submitted 70 proposed changes to the legislation, unveiled last week.

Some lawmakers want to default on the money the state owes for a failed loan guarantee to former Red Sox pitcher Curt Schilling’s bankrupt video game company. They argue the insurer will pay bond holders if the state defaults.

But Governor Lincoln Chafee says the state’s financial reputation would suffer and its borrowing costs would rise.

The budget proposal contains an initial $2.5 million payment on the debt. House passage would send the budget bill to the Senate.