Contact: Representative Patricia Morgan
Tel: 401-828-4831
Email: pmorgan14@cox.net
Date: May 9, 2016
FOR IMMEDIATE RELEASE
Morgan Introduces Bill to Bar Moral Obligation Bonds
People have the Right to Approve All Debt: They Pay the Bill
STATE HOUSE - On Thursday, May 12, the House Finance Committee will hear legislation proposed by Representative Patricia Morgan (R-District Coventry, Warwick, West Warwick) that bars the issuance of "Moral Obligation" bonds. Co-sponsors are Republican Representatives Sherry Roberts, Justin Price, Michael Chippendale and Independent Blake Filippi.
"The 38 Studios fiasco is a glaring example of why Moral Obligation bonds must be banned in our state," explained Representative Morgan." That $100 million insider deal was perpetrated on the taxpayers of Rhode Island without their permission. Residents had no say in the bond, but are paying the bill."
General Obligation bonds appear on the ballot and must pass with the voter’s approval before they are authorized. Public scrutiny validates the bond’s purpose. As a result, General Obligation bonds carry the full faith and credit of the State of Rhode Island and enjoy a lower interest cost.
"Moral Obligation bonds carry none of the safeguards or benefits of General Obligation bonds. In the case of 38 Studios, the debt was voted in the twilight hours of the General Assembly without full and vigorous study or examination. The interest rate was exceptionally high and the terms of the deal favor the buyer, offering scant protection to the State. Yet the bonds are being paid as if they have been guaranteed by the voters." Morgan continued. "We have tried repeatedly to prevent payment of these bonds until a thorough independent investigation is completed. Inexplicably, our efforts have been shut down every time. In that case, the People of Rhode Island deserve answers. Unfortunately, as the law stands, this could happen again in the future. Nothing has changed, despite public outrage."
"This bill, if it becomes law, will prevent future debacles, such as 38 Studios. No longer will those in power be able to go around the People to issue costly and dubious debt on our shoulders that forcibly grabs our wallets. I urge concerned citizens to contact your elected officials. Support House Bill 7385."
House Bill No. 7385 BY Morgan, Roberts, Price, Chippendale, Filippi ENTITLED, AN ACT RELATING TO PUBLIC FINANCE - PUBLIC CORPORATION DEBT MANAGEMENT {LC3528/1} (Eliminates the issuance of bonds when the general assembly has adjourned, and further bars the issuance of "moral obligation" bonds not secured by the full faith and credit of the state.) 01/28/2016 Introduced, referred to House Finance 05/06/2016 Scheduled for hearing and/or consideration
Tel: 401-828-4831
Email: pmorgan14@cox.net
Date: May 9, 2016
FOR IMMEDIATE RELEASE
Morgan Introduces Bill to Bar Moral Obligation Bonds
People have the Right to Approve All Debt: They Pay the Bill
STATE HOUSE - On Thursday, May 12, the House Finance Committee will hear legislation proposed by Representative Patricia Morgan (R-District Coventry, Warwick, West Warwick) that bars the issuance of "Moral Obligation" bonds. Co-sponsors are Republican Representatives Sherry Roberts, Justin Price, Michael Chippendale and Independent Blake Filippi.
"The 38 Studios fiasco is a glaring example of why Moral Obligation bonds must be banned in our state," explained Representative Morgan." That $100 million insider deal was perpetrated on the taxpayers of Rhode Island without their permission. Residents had no say in the bond, but are paying the bill."
General Obligation bonds appear on the ballot and must pass with the voter’s approval before they are authorized. Public scrutiny validates the bond’s purpose. As a result, General Obligation bonds carry the full faith and credit of the State of Rhode Island and enjoy a lower interest cost.
"Moral Obligation bonds carry none of the safeguards or benefits of General Obligation bonds. In the case of 38 Studios, the debt was voted in the twilight hours of the General Assembly without full and vigorous study or examination. The interest rate was exceptionally high and the terms of the deal favor the buyer, offering scant protection to the State. Yet the bonds are being paid as if they have been guaranteed by the voters." Morgan continued. "We have tried repeatedly to prevent payment of these bonds until a thorough independent investigation is completed. Inexplicably, our efforts have been shut down every time. In that case, the People of Rhode Island deserve answers. Unfortunately, as the law stands, this could happen again in the future. Nothing has changed, despite public outrage."
"This bill, if it becomes law, will prevent future debacles, such as 38 Studios. No longer will those in power be able to go around the People to issue costly and dubious debt on our shoulders that forcibly grabs our wallets. I urge concerned citizens to contact your elected officials. Support House Bill 7385."
House Bill No. 7385 BY Morgan, Roberts, Price, Chippendale, Filippi ENTITLED, AN ACT RELATING TO PUBLIC FINANCE - PUBLIC CORPORATION DEBT MANAGEMENT {LC3528/1} (Eliminates the issuance of bonds when the general assembly has adjourned, and further bars the issuance of "moral obligation" bonds not secured by the full faith and credit of the state.) 01/28/2016 Introduced, referred to House Finance 05/06/2016 Scheduled for hearing and/or consideration
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