$700 million plan could define Culver’s legacy

Gov. Chet Culver’s first Condition of the State address a year ago was characterized by many as a Democratic pep rally – a list of the party’s accomplishments from the previous session, from education to health care to renewable energy, with very little new substance.  To say that a lot has changed since that speech would be a colossal understatement.

Gov. Chet Culver delivered his second Condition of the State address to a joint session of the legislature Tuesday.

Mother Nature wreaked havoc on the state in the form of tornadoes and flooding. Then a downturn in the national economy finally hit close to home, with projections showing Iowa’s budget deficit in the neighborhood of $600 million.

Staring down the barrel of a budget crisis in a flood-ravaged state that is still waiting for help to arrive, Culver delivered a much more sober speech, but one that will shape the next 100 days of legislative action in a way last year’s never did.

This year’s proposal to borrow $700 million in 20-year tax-exempt state revenue bonds to pay for construction projects involving roads, bridges, railways, recreational trails, public buildings and water and sewer treatment facilities will not only set the tone of the session; it will likely go a long way toward shaping Culver’s legacy as governor.

In the months since the flood waters receded, criticism of Culver’s decision not to call a special legislative session has increased, especially among those still living in FEMA trailers or struggling to get their business back on its feet.

Obviously, $700 million is a small fraction of the estimated $5 billion in damages suffered in Cedar Rapids alone. And a proposal to spend $43 million from the state’s emergency fund specifically on flood recovery is being viewed as too small a commitment by some. House Minority Leader Kraig Paulsen said he would rather see the state spend at least half the emergency fund, or around $75 million by his calculations.

But with the additional expectation of federal money pouring into the state from President-elect Barack Obama’s economic stimulus plan, public works projects funded partially by state government bonds hold the potential to remake the face of Iowa in the coming years and put thousands of Iowans back to work.

That’s the plan, at least.

More wrangling with the legislature?

In last year’s Condition of the State address, Culver unveiled a surprise proposal to expand the state’s bottle redemption bill. The idea was not greeted warmly by legislative leaders, and it opened a wound which festered for the rest of the session, culminating in Culver’s veto of a bill to expand the collective bargaining rights of public employees that Democrats had pushed through both chambers.

Communication has supposedly improved, and legislative leaders have been very supportive of Culver’s budget moves so far this year. But despite the talk that their differences are behind them, there does appear to be a showdown in the works over the governor’s resolve not to raise any taxes.

“I support efforts that result in a gas tax increase,” Senate President Jack Kibbie said Monday. “Success in that endeavor will mean better roads, jobs, and an economic boost to Iowa’s families and communities. While there may be funds for these efforts as part of the federal economic recovery package, we also need to act. It’s time to declare war on the potholes and put people to work.”

It could be that Culver’s plan and a gas tax increase are not mutually exclusive, and it’s clear that Democrats are at least united behind the idea of infrastructure repair as a jobs creation program.  But while commending the governor’s speech, Senate Majority Leader Mike Gronstal said the gas tax is still on the table.

And one cannot forget the minority party in these discussions. Republicans remained conspicuously seated when Culver declared,  “This is the first time our state’s history we’ve earned a Triple-A bond rating. And I intend to use it!”

Republicans quickly countered that borrowing money after you’ve already spent too much is the exact cause of the national financial meltdown. Newly elected Republican Party of Iowa Chairman Matt Strawn said instead of borrowing money the state should be looking for more ways to cut the budget. He also said the governor is providing no leadership during the state’s difficult situation.

So while the destiny of Culver’s proposals are up in the air and the legislature still faces a difficult session, Tuesday’s speech made it clear that the governor will not be a spectator in the quest to overcome Iowa’s challenges.  The same could not be said 365 days ago, when the governor’s proposals were forgotten almost as soon as they were announced.