The Boston Herald is reporting that lawmakers in Rhode Island are saying that they should stop making payments related to 38 Studios loan. The state is currently suing founder Curt Schilling and executives from the company that defaulted on loans in the neighborhood of $100 million. The Rhode Island House Finance Committee is currently reviewing bills that would block the state or its Economic Development Corp. (EDC) from making payments. One lawmaker even suggested that the insurance company tied to the loan should pay it.
Supporters of this default plan point out that taxpayers should not be forced to pay for the 38 Studios situation. Representative and sponsor of one of the bills Karen MacBeth (D-Cumberland) told the publication that insurance will cover the costs.
"The state of Rhode Island cannot afford to put this burden on the backs of the taxpayers," MacBeth said. "Have the insurance company pay the bill. This is why we have insurance. The insurance company understood the risk. Now let them pay."
But EDC Chief of Staff John Pagliarini warned lawmakers that defaulting on the loan would likely affect the state's chances of securing financing for future projects and negatively impact the state's bond ratings.
Of course, taxpayers will ultimately foot the bill because - to be frank about it - lawmakers were foolish with their money.