Rhode Island Session Preview: A tough ‘hangover’ awaits lawmakers

January 9, 2014

Reporters surround Curt Schilling, whose failed Studio 38 benefited from a $75 million Rhode Island loan. (Steven Senne / AP)

Rhode Island’s legislature reconvened on Tuesday, launching a session that could see high-profile fights over pension and tax reform, the state’s $100 million budget deficit, and a scandal involving a failed investment in a studio founded by Curt Schilling. House Speaker Gordon D. Fox (D) even opened this year’s session with remarks that nodded to those heated debates.

“In many ways, we did not end nice on July 3,” Fox said on Tuesday. “We did not end nice. And I say nice and not nicely because it got personal in a lot of regards.”

One high-profile and highly political issue awaiting resolution this year is what to do about the state’s large failed investment in Studio 38, a video game company founded by former Red Sox pitcher Curt Schilling. The state invested $75 million in the now-bankrupt venture, the Associated Press reported. Lawmakers agreed to pay off $2.5 million last year, but another $12.5 million payment looms.

Political analyst Scott MacKay explained why that vote will be especially tough for lawmakers during the 2014 session, which he also describes as a “hangover” from last year:

“Any incumbent who votes to pay the Schilling tab may face an opponent who argues that the state ought to walk on this debt,” he said in a commentary for Rhode Island Public Radio. “There are few things lawmakers dread more in an election year than taking a tough vote.”

Other big fights remain as well. The state Chamber of Commerce wants lawmakers to promote economic development by cutting taxes, while religious leaders and some lawmakers are pushing to address poverty and income inequality. The governor and some lawmakers hope a plan to fund more work-force training will also boost the state’s lagging economy.

Ultimately, pension reform will likely be the toughest fight in the session ahead, according to the Associated Press.

Pensions remain the year’s biggest question mark, with a proposed settlement in the lawsuit over the state’s 2011 pension law expected any time.

Unions and public-sector retirees sued to block the overhaul, which raised retirement ages, suspended cost-of-living pension increases and created a new benefit that combines a traditional pension with a 401(k)-like account. The suit is now in closed-door mediation. A settlement — which would require legislative approval — could dramatically alter the state’s retirement system and rip a big hole in a state budget that’s already $100 million in the red.

The overhaul was designed to save the state and its municipalities billions of dollars in future decades — including $250 million this year alone, according to House Speaker Gordon Fox.

Niraj Chokshi reports for GovBeat, The Post's state and local policy blog.
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