Year in review: RI's biggest stories

PROVIDENCE, R.I. (AP) — The top stories in Rhode Island in 2012:

38 STUDIOS

The spectacular collapse of former Red Sox pitcher Curt Schilling's video game company potentially put the state on the hook for more than $100 million and sent shockwaves through state politics. The state's Economic Development Corp. lured 38 Studios to Providence from Massachusetts in 2010 with a loan guarantee based on the promise of hundreds of jobs. The company laid off its employees in May and filed for bankruptcy in June. The implosion prompted the resignation of several top state economic development officials and a war of words between Gov. Lincoln Chafee, who opposed the loan guarantee before taking office in 2011, and Schilling, who blamed Chafee for not doing enough to help his venture. Chafee vowed to recoup as much of the state's investment as possible and in November the EDC sued Schilling and some of its own former leaders over the failed economic development initiative.

SUPERSTORM SANDY

While Sandy dealt Rhode Island only a glancing blow, the superstorm flooded coastal communities, damaged scores of beach homes and carried off much of the sand on southern beaches. The storm that hit just before Halloween also blew out seawalls, wiped out some coastal roads and brought down trees and power lines. But the damage was far worse in New Jersey, New York and parts of Connecticut. Now, businesses and residents in communities including Westerly, Narragansett, Block Island and South Kingstown are rebuilding in the hopes of a full recovery by next year's tourist season.

DAVID CICILLINE WINS A SECOND TERM

U.S. Rep. David Cicilline was named one of the nation's most vulnerable Democratic incumbents as he began his bid for another term representing the state's 1st Congressional District. The Democrat and former mayor of Providence was dogged by criticism that he lied to voters about the fiscal condition of Providence during his first bid for Congress. But in September he beat back bitterly personal attacks from Democratic primary challenger Anthony Gemma, who poured hundreds of thousands of his own dollars into attacks on Cicilline's character. And in November, Cicilline notched an easier-than-expected victory against Republican Brendan Doherty, the former head of the state police.

ECONOMIC PROBLEMS PERSIST

Though there were some signs of a sluggish recovery, the state's economy remained a big concern for businesses, policy leaders and households. The state began 2012 with an unemployment rate of 10.8 percent and ends the year with a jobless rate of 10.4 percent, still nearly 3 percentage points higher than the national jobless rate and the second highest of all 50 states. Easy answers to the state's problems proved elusive, but lawmakers say they'll work in 2013 to improve the state's business climate. Meanwhile, the state was one of only two states to lose population from July 2011 to July 2012.

ONGOING FISCAL WOES AT CITY HALL

Providence, Woonsocket, Cranston, Pawtucket and other cities and towns continued to wrestle with deficits and cash-flow crunches prompted by the economic downturn, cuts in state aid and failures to keep up with mounting pension costs. Providence Mayor Angel Taveras successfully negotiated pension concessions and higher voluntary payments from landowners like Brown University. A judge signed off on a five-year plan for Central Falls to emerge from municipal bankruptcy but the city remains under the control of a state-appointed receiver. Meanwhile, state leaders worked with Woonsocket, East Providence, Pawtucket and West Warwick to help them stay solvent and avoid Central Falls' fate.

DECRIMINALIZATION OF MARIJUANA

State lawmakers voted in June to decriminalize the possession of an ounce or less of marijuana, replacing criminal fines and the threat of jail time with something more like a traffic ticket. Under the new law, which takes effect in April, adults caught with pot would face a $150 fine and the incident would not appear on a criminal record. It will remain illegal to drive while high. Meanwhile, lawmakers revised rules for medical marijuana dispensaries in the hopes they can open in 2013 without the threat of federal prosecution. Proponents of ending marijuana prohibition say they'll push next year to legalize the drug.

LAWMAKERS IN LEGAL TROUBLE

Five state lawmakers faced criminal charges in 2012. This month, Deputy House Speaker John McCauley, D-Providence, was sentenced to 27 months in federal prison for tax fraud. Former House Minority Leader Robert Watson, R-East Greenwich, was arrested in January for marijuana possession. Senate Majority Leader Dominick Ruggerio, D-North Providence, was charged with driving under the influence in April but the charge was dropped when Ruggerio admitted refusing an alcohol test and agreed to a six-month license suspension and community service. In October, Rep. Leo Medina was arrested for the second time for allegedly representing himself as an attorney