Governor and Democrats Propose Competing Bonding Bills

From this week’s House Republican Newsletter:

Republicans Support Pay-As-You-Go Approach

The Governor has said his number one priority is a bonding package of up to $750 million, which includes $250 million for roads and bridges. The Democrats have countered with a $700 million proposal, which does not include any funding for roads and bridges. Republicans support funding infrastructure projects on a pay-as-you-go basis with money from the Rebuild Iowa Infrastructure Fund (RIIF).

Here is the Governor’s $750 million “I-Jobs” proposal:

  • $250 million for transportation projects, including $200 million for roads and bridges
  • $175 million to replace the tobacco bonds that could not be issued last year
  • $150 million for public infrastructure and disaster-relief projects not covered by FEMA
  • $100 million for water quality and waste water improvement projects
  • $75 million for local infrastructure, broadband technology and alternative energy

Here is the $700 million package that has been proposed by the Democrats:

  • $300 million for I-Jobs, disaster relief, water quality and waste water improvements
  • $175 million to replace the tobacco bonds that could not be issued last year
  • $100 million for disaster rebuilding and other building projects at the University of Iowa
  • $100 million in public infrastructure, with the 2010 Legislature deciding the projects
  • $25 million for broadband technology projects (the rumor is this will be dropped)

In both proposals, the interest on the bonds exceeds $400 million. That means it costs over $1.1 billion in order to get $700 million to $750 million in principal for the projects.

At this point, the Governor claims he needs Republican votes to pass his proposal. House Republicans don’t necessarily oppose all of the projects in the bill but support funding the projects on a pay-as-you-go basis and not saddling Iowans with 20-plus years of debt. Had the Democrats not shifted over $200 million from the RIIF to ongoing spending in FY 09 and FY 10, there would be plenty of money in the RIIF to fund all of the necessary infrastructure projects.