"The condition of the state is strong because the people of Iowa are strong."
Tuesday morning Governor Chet Culver gave his State of the State address. Last year Iowans survived relentless natural disasters and 4000 Iowa National Guardsmen were deployed making it the largest deployment from Iowa since the Civil War proving that Iowans are strong. Though I was France when the blunt of the floods ravaged Iowans the television footage of it was broadcast on the BBC and around the world. Iowans are strong and resilient and known for it world-wide.
Governor Culver stated that this “legislative session must be to rebuild this state which we all love.” With a projected $779 million budget shortfall this may seem like an unattainable task. However, as the Governor pointed out, Iowa has an AAA bond rating and he intends to use it. An ironic statement after he explicitly pointed out the relative strength of the State’s economy due to the lack of debt compared to states like California.
As the Governor proposed, Rebuild Iowa Investment Bonds will be sold to raise the funds necessary to rebuild and repair roads bridges, trails, railroad, public buildings, water treatment plants, sewer treatment plants, the utility grid and telecommunications. On the one hand, investment in infrastructure and roads will create and maintain jobs. State issued bonds are subject to tax exemptions as well.
On the other hand, Iowa has not traditionally sold bonds to fix infrastructure. Bonding is currently done for major buildings but is very limited. Over time it can become difficult to make the massive bond payments. Depending on how long the bonds are for, we would likely need new roads before the bonds issued for the old ones have even been paid for. At a time when the rest of the country is in dire financial straits as a result of over spending and taking on too much debt, do we really want to fall in line behind them?
The Governor also stated that he will not tax our way out of this budget shortfall. However, many Iowans would not be opposed to a gas tax increase if it meant improved roads. In the long run, this may be the more fiscally responsible solution and the time to do it is now while the price of oil is low and before we’re hit with a national gas tax increase.
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Read your comment regarding Culver's plan to spend Iowa into the toilet. All I have to say is that instead of borrowing money, Culver should look into a repeal of the smoking ban, whereby establishments that want to have a special smoking waiver need to pay a surtax that would fund infrastructure. I think that that, coupled with the re-legalization of touch-play machines (subject to reasonable state wide gambling tax), would go as far as any bond issue, and I, as a taxpayer, would not be indebted in any manner. We should be taxing vice before compromising virtue.
ReplyDeleteI agree. The country is in the economic situation it is because people were told to "borrow, borrow, borrow." So what sense does it make for the state to do the same? Perhaps the Governor is throwing this idea out there just so I can be shot down and he come back and say, "Well, I guess I have no other choice but to raise the gas tax." The key benefit to the gas tax is that the burden not solely placed on Iowans but all people who buy gas within the state.
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