Things wouldn’t go very well for Rhode Island if it defaulted on its debt for the taxpayer-guaranteed loan that helped bring former Red Sox pitcher Curt Schilling’s video game company to the Ocean State, according to a report released by the state today.
Some lawmakers have suggested default might be the state’s best recourse to the mounting debt, currently sitting at more than $85 million. But a consultant hired by the state (“Just throw it on the 38 Studios tab, guys.’’) says default would knock Rhode Island’s bond rating to junk status and could have wide negative effects on the broader Ocean State economy.
R.I. Governor Lincoln Chafee has pushed for the state to pay back the debt in full, while some legislators say the state could escape the obligation, according to the Providence Journal. The report suggested that while it’s true the state’s requirements are non-binding, creditors would ultimately punish default anyway.
Rhode Island inherited the debt when Schilling’s 38 Studios went under in 2012, just two years after the state provided it with a $75 million financing deal.