BRANSTAD’S WORDS CONTRADICT HIS BORROWING PAST
November 9, 2009
DES MOINES – Terry Branstad’s rhetoric attacking the I-JOBS program stands in sharp contrast to his actions as Governor, when he put the state in an even deeper debt hole, Iowa Democratic Party Chairman Michael Kiernan said Monday.
“Branstad’s attacks on the I-JOBS program ring awfully hollow given that Branstad’s borrowing exceeded anything that’s going on right now,” Kiernan said. At a Republican Party of Iowa fundraiser in Des Moines Saturday, Branstad took a swipe at Governor Culver’s $830 million stimulus package. “…Too much debt is bad and those that create it should be thrown out of office,” Branstad said, “We know that it doesn’t have to be this way.”
In fact, the Branstad Administration used public bonding, the same kind of debt Branstad now decries, to fund more than $613 million in projects between 1989 and 1994. Those projects included a state prison at Clarinda ($22.6 million); the Iowa Communications Network ($115 million) and the Underground Storage Tank cleanup program ($141 million). Details and source material may be found at IowaKnowsBetter.com.
Adjusted for inflation, Branstad’s borrowing totals nearly a billion dollars ($994.48 million), without including any of the interest Iowans were forced to pay on the four separate instances of major bonding Branstad conducted.
“To now hear Branstad attack I-JOBS is ironic to say the least,” Kiernan said.
The I-JOBS program is a critical tool in helping Iowa endure the biggest economic downturn since the Great Depression, by creating jobs, rebuilding our state’s aging infrastructure and helping Iowans recover from the devastating floods, storms and tornadoes of 2008, Kiernan said.
“Branstad appears to be joining the chorus of Republicans who would have done nothing to help our state through this recession,” Kiernan said. “And in Branstad’s case, that’s not only wrong, it’s disingenuous given his past decisions.”
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Branstad Used $115 Million in Bonds to Build the ICN. The Des Moines Register reported in June 2004 that, “In January 1989, Branstad recommended creation of an interactive video communications network, calling it ‘the highway of the future.’ Branstad, a Republican, said in a recent interview that he would have preferred a pay-as-you-go approach to creating the network, rather than borrowing money through the sale of $115 million in bonds. But he has no regrets about signing the bill that set the project in motion.” [Des Moines Register, 6/13/04]
Branstad Approved $22.6 Million Bonding Program to Build Clarinda Prison. The Cedar Rapids Gazette reported in July 1994 that, “Fitzgerald said the state planned to proceed with a $22.6 million bond issue next week and ‘they'll be swinging hammers’ to build the new prison Aug. 1.” [Cedar Rapids Gazette, 7/22/94]
Branstad Approved $141 in Bonds to Cleanup Gas Storage Tank Spills. The Bond Buyer reported in May 1989 that, “The Iowa General Assembly recently passed a bill authorizing the creation of a bond fund - financed by $141 million of taxable and tax exempt revenue bonds - to pay for the cleanup of spills from gasoline storage tanks in the state. Gov. Terry Branstad is expected to sign the measure creating the Iowa Comprehensive Petroleum Storage Tank Fund, said Michael L. Fitzgerald, state treasurer.” [Bond Buyer, 5/4/89]
Underground Storage Tank Cleanup Program Funded Using Bonds. The Associated Press reported in March 1993 that, “State Insurance Commissioner David Lyons, who oversees the tank cleanup fund, said about one-third of the gasoline storage tanks in Iowa now meet federal standards. The cleanup program focuses on sites that pose the most severe environmental threats. Other gas stations could be shut down if they do not clean up contamination. The current fee of 1 cent per gallon brings in about $15.3 million a year, which is used to pay off bonds for cleanup.” [Cedar Rapids Gazette, 3/26/93]
Branstad Used $335 Million in Tax Anticipation Notes to Meet Budget Obligations in 1992. The Cedar Rapids Gazette reported in March 1992 that, “The lawsuit, to be filed in Polk County District Court as early as next week, would name State Treasurer Michael Fitzgerald as a defendant because he is the state official who handles the tax revenue anticipation notes , or TRANS, used to meet state cash flow needs. The state has borrowed $335 million this year to help meet obligations while delaying several months of school aid payments. Branstad officials have indicated they may borrow $80 million to $100 million more before fiscal 1992 ends June 30.” [Cedar Rapids Gazette, 3/20/92]
Inflation Calculation of Branstad-era bonding programs was conducted as follows: U.S. Bureau of Labor Statistics CPI calculator was applied to each bonding program as of the year the bonds were issued. The specific dates and amounts that resulted are as follows:
- Iowa Communications Network $115 million in 1989 = $200.29 million in 2009 dollars
- Clarinda Correctional Facility $22.6 million in 1994 = $32.93 million in 2009 dollars
- Underground Storage Tank Fund $141 million in 1989 = $245.58 million in 2009 dollars
- Tax Anticipation Notes (TRANS) $335 million in 1992 = $515.68 million in 2009 dollars
- TOTALS: $613.6 million $ 994.48 million in 2009 dollars