By Jason Clayworth, The Des Moines Register
Statehouse reaction to Gov. Chet Culver's agenda was mixed this
morning, especially his idea to borrow money for massive infrastructure
improvements.
House Speaker Pat Murphy, a Democrat from Dubuque, called Culver’s $700 million bonding proposal a “bold initiative.”
“I
think it’s the route to go. I know in these tough economic times some
people argue that we should never bond but with our triple A bond
rating, what the governor said makes a lot of sense and quite frankly,
we should try to do that.”
State Auditor David Vaudt said he
needs more time to review the proposal, as well as the governor’s
complete budget plan,before he takes an official position on the state
assuming hundreds of millions of dollars in additional debt.
Vaudt, a Republican, generally has been cautious toward the idea.
“What
we’ve got to remember is we’ve got to dedicate and set aside a piece of
revenue stream to pay that principal and interest,” Vaudt said.
House Majority Leader Kevin McCarthy, a Democrat from Des Moines, said
lawmakers will need to examine the details of the proposal. He noted
that the party is already working closely with the governor on the
idea. McCarthy said he personally supports Culver's bonding idea,
calling it "big and bold."
“Anytime you deal with bonding
issues, there tends to be a philosophical difference between the
parties,” McCarthy said. “Republicans, in general, oppose the bonding.
Democrats, in general, support bonding for infrastructure which is why
I didn’t see a single Republican clap or stand up during the bonding
proposal.”
Republicans said they are leery of the plan, which they say lacks detail.
“My
objections is we don’t have the details of what the money would be
spent for and what is the purpose for the use of this money,” said Sen.
Paul McKinley, a
Republican from Chariton. “We heard it would
create jobs and go to very broad categories of things. Perhaps when we
see those issues specifically, maybe there is some sense to that. But,
I would prefer not to saddle our kids and grandkids with a huge amount
of debt.”
Republicans largely expressed support for Culver’s
proposal to immediately allocate $43 million in state reserves to help
natural disaster recovery but some questioned if it’s enough.
Of
the state’s $620 million reserves, $155 million is in a special account
known as the Economic Emergency Fund. Some Republicans questioned if as
much as half of the fund should be allocated for disaster assistance.
“I
was actually, on a personal level, hoping that the number might be a
little bit higher,” said House Minority Leader Kraig Paulsen, a
Republican from Hiawatha. The party will discuss if they will push for
more money being used from the fund, he said.
Senate Democrats will do their best to free up $43 million in cash
from the emergency reserves for flood aid within “the first month,”
Senate Democratic Leader Mike Gronstal said.
That’s about the
right amount to pull from the rainy day fund for now, Gronstal said.
“We intend to be very cautious about spending the reserve funds down,”
he said, adding that JumpStart money is not all spent yet.
It
will take lawmakers longer to discuss borrowing $700 million for
long-term projects, but Senate Democrats like that idea, too.
“Obviously
that number’s a little flexible depending on what’s happening in the
bond markets, but yeah, we think that’s in the neighborhood of where we
need to go,” Gronstal said.
Gronstal deflected Republican
criticism by pointing out that McKinley, in his opening day speech,
talked about a business he once owned.
“He borrowed every nickel
he could and leveraged himself as far as he could because he believed
in his future. I believe in Iowa’s future. I believe it makes sense now
to borrow money and move this state forward,” Gronstal said.
He
added: “This is probably one of the best times in our history to go out
and borrow money with a dedicated repayment stream. Do you own a home?
Did it make sense for you to borrow money? Or did you just pay cash?”
Although
Culver stressed not raising taxes, Gronstal said upping the state gas
tax “is still an open question for us. It’s still one we’re willing to
consider.”
Mayors of several flood-stricken communities were
invited by the governor's office and were in the audience during
Culver's speech.
Iowa City Mayor Regenia Bailey said Culver
provided the commitment to recovery from the 2008 floods and tornadoes
that she was seeking.
"I think the speech, from my perspective, is hopeful. I'm excited to take that message back to Iowa City," Bailey said.
Bailey and Waterloo Mayor Tim Hurley, who also attended the speech, said the
$700 million bonding proposal Culver discussed for infrastructure projects
would have a long-term benefit on the Iowa economy.
However, Hurley was not convinced it would immediately spur the economy the
way Culver suggested the wide-ranging proposal would.
"If people are looking at immediate impact, it's probably not going to do
it," Hurley said. It's not always that immediate. But in the long run, it
does work. I've seen in Waterloo how public works projects help the economy.
I think it's an idea that deserves more attention."
— Staff Writer Thomas Beaumont contributed to this report.