Legislators to make disaster funds top priority


State lawmakers pledged swift action Tuesday to get $43 million in state emergency funds into the hands of disaster victims while taking a more measured look at Gov. Chet Culver’s $700 million bonding plan.

Majority Democrats applauded Culver for taking a bold approach in his Condition of the State speech to dealing with the “double disasters” of a national recession and weather-related destruction. But Republicans questioned the wisdom of borrowing to prosperity.

Declaring the first order of business in 2009 was to rebuild Iowa, Culver proposed to sell up to $700 million in tax-exempt revenue bonds to upgrade the state’s infrastructure and jump-start a sluggish economy by creating jobs. He estimated the effort, if fully funded, could generate up to 28,000 jobs.

The governor said he would repay the borrowed funds over 20 years by using $56 million a year in state gambling profits. He proposed creating a new authority to issue the bonds and appointing a five-member board to approve grants and loans to “ready-to-go” public infrastructure projects.

“Just as we locked arms and worked together during the flood fight, we must continue our efforts, as partners, to rebuild Iowa, by investing in, and modernizing our infrastructure,” Culver told a joint convention of the 83rd General Assembly.

The governor also urged state lawmakers to immediately spend $43 million in emergency reserves to assist communities hard hit by last year’s natural disasters with funds to address unmet housing and business needs and assist individuals and families still facing challenges.

“Gov. Culver has put a serious proposal on the table that responds to the deepening national recession and takes bold steps to help Iowans recover from last year’s natural disasters,” said Senate Majority Leader Mike Gronstal, D-Council Bluffs.

House Speaker Pat Murphy, D-Dubuque, said the governor’s ideas “made sense” and he expected lawmakers to give them serious consideration.

Minority Republicans backed Culver’s call for emergency disaster relief, although House GOP Leader Kraig Paulsen of Hiawatha said he had hoped it would be closer to $75 million. However, Culver’s bonding proposal was panned by Republicans as the wrong approach.

“This is effectively like maxing out our credit card,” said Paulsen. “We don’t want to max out our credit “Borrowing money after you’ve already spent too much is the exact cause of the national financial meltdown. Borrowing just because you can is not the way Iowans manage their budgets and neither should we.”

Construction industry interests praised Culver for moving infrastructure needs to the top of the 2009 legislative agenda, but they said they preferred raising the state’s gas tax as a means to generate needed revenue rather than embarking on a bonding approach.

“We’ve always supported a pay-as-you-go system,” said David Scott, executive director of the Iowa Good Roads Association. “The gas tax is the surest way to do it in the long haul. Bonding addresses the problem in a very short window and when the window is gone, the problem is still there.”

Scott Newhard, vice president of public affairs for the Associated General Contractors of Iowa, said a public works investment is needed not only to create jobs but to save existing construction jobs.

“The good news is that he doesn’t want to raise taxes but the bad news is he wants to borrow our way out of it,” said Cloyd Robinson, a lobbyist with Iowans for Tax Relief. “Just because you’ve got a good credit rating is no reason to borrow three-quarters of a billion dollars that have to be paid back.”

Rep. Tyler Olson, D-Cedar Rapids, said he supported quick action to get another $43 million installment of disaster aid to affected individuals and businesses. However, he said he hoped that figure could grow to as much as $140 million by session’s end.

“We have about $140 million in the rainy day fund and over the course of the year, I think it’s important that we spend as close to $140 million on disaster recovery as possible,” he said. “This is the definition of a rainy day.”

Rep. Christopher Rants, R-Sioux City, called Culver’s speech “lackluster” and short on specifics.

“I’ve sat through 17 of these things now. That was the most disappointing one of all of them,” he said. “We got no policy initiatives – none; nothing to actually stimulate the private sector; no here’s how we’re going to try to improve business growth in Iowa, here’s how we’re going to improve the business climate, nothing in there about how we’re going to improve student performance.

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