Legislative leaders approve up to $300 million in emergency cash flow borrowing


STATE HOUSE – Legislative leaders today approved an emergency measure to borrow up to $300 million to shore up cash flow problems resulting from the COVID-19 pandemic and allow the state to continue to provide vital services.

Meeting at Gov. Gina M. Raimondo’s request in their capacity as the Disaster Emergency Funding Board, House Speaker Nicholas A. Mattiello, Senate President Dominick J. Ruggerio, House Finance Committee Chairman Marvin L. Abney and Senate Finance Committee Chairman William J. Conley Jr. voted unanimously to approve the funding.

“The steps taken today are necessary, prudent and limited in scope. These are extraordinary circumstances. We didn’t take this action lightly, but the potential consequences of inaction would be too great,” said House Speaker Mattiello (D-Dist. 15, Cranston) and Chairman Abney (D-Dist. 73, Newport, Middletown).    

With many businesses as well as all gaming facilities shuttered, workers laid off and the tax filing deadline postponed until July 15 — after the end of the current fiscal year — the state has experienced significant reductions and delays in expected revenue as a result of the outbreak.

The board’s vote does not authorize any spending that was not already budgeted this fiscal year; it only provides liquidity so the state can meet its obligations while revenues are delayed.

“This board has never met before – and hopefully will never have to meet again.  It was created for extraordinary times such as these. Action is necessary to ensure that the administration has the tools it needs to manage the state’s cash flow. It is prudent for this board to grant this authority to the governor during these extraordinary times to ensure the state’s liquidity,” said Senate President Ruggerio (D-Dist. 4, North Providence, Providence) and Chairman Conley (D-Dist.18, East Providence, Pawtucket),

The vote will allow borrowing for cash flow purposes that must be paid back by the end of the next fiscal year, June 30, 2021. In their remarks today, Governor Raimondo and General Treasurer Seth Magaziner indicated their intention to borrow only what the state needs to offset the cash crunch.

The vote would allow the state to open a line of credit with lenders and borrow as needed.

The state has lined up private sources for the funding, but the loans could also come from federal sources if available. While the federal relief package that passed the U.S. Senate last night includes money to help states in their efforts to contain and treat the outbreak, whether the funding can be used to make up for lost revenue or when it would become available for that purpose is not clear.

Projections compiled by the Office of the General Treasurer, the Department of Revenue and the Office of Management and Budget estimate that the state’s weekly cash balance will dip from $110 million this week to $14 million next week. (The treasurer’s target is to maintain at least $40 million in cash.) Those projections show the state dipping into negative territory by the week of April 17 and hitting a negative balance of $206 million by the end of the fiscal year.

The cash flow problem indicated by those projections necessitated the first-ever meeting of the Disaster Emergency Funding Board, which was established by a 1973 state law to approve funds for emergency response. The governor declared a state of emergency in Rhode Island on March 9.





For an electronic version of this and all press releases published by the Legislative Press and Public Information Bureau, please visit our website at www.rilegislature.gov/pressrelease. 






George Floyd's family is visiting the memorial site honoring their son who died in police custody in Minneapolis. For many members of the family, it's the first time they're visiting the site along the street where Floyd was killed on Memorial Day after an arresting officer kneeled on his neck. The family has pleaded with protesters multiple times since riots broke out across America last week, urging them to demonstrate peacefully.        President Trump is reportedly calling governors "weak" for not being tougher on protesters over the weekend. Protests in honor of George Floyd, a black man who was killed while in police custody last week, erupted in violence across the country. During a conference call at the White House, Trump is reported to have said -- "You have to dominate; if you don't dominate..they're going to run over you..you're going to look like a bunch of jerks."       Attorney General Bill Barr is reportedly ordering the Bureau of Prisons to dispatch riot teams to Miami and Washington, DC as nationwide protests turned violent this weekend. Violent protests in DC and more than 20 states were sparked by the death of George Floyd, a black man who died in police custody in Minneapolis on Memorial Day.        New York City Mayor Bill de Blasio's daughter was reportedly arrested for protesting the death of George Floyd this weekend. Chiara de Blasio was among the hundreds of protesters allegedly blocking traffic on Broadway and 12th Street Saturday night and was arrested after refusing to move. The 25-year-old Chiara reportedly gave her residence as East End Ave and didn't tell cops she was the mayor's daughter.       Two American astronauts are on a mission testing out the SpaceX Crew Dragon for future flights. Astronauts Douglas Hurley and Robert Behnken successfully docked the capsule at the International Space Station over the weekend. They say they are testing every function of the SpaceX Crew Dragon.        A number of major retailers are temporarily closing stores in cities hit by violent protests. Walmart, Target, Apple and Whole Foods are among those shuttering locations or adjusting store hours because of citywide curfews. Protests have erupted nationwide over the death of George Floyd and in some cases has led to riots and looting.