MANCHESTER, Iowa – Republican gubernatorial candidate Bob Vander Plaats said today that he will establish a fund during his first term in office to repay the massive long-term debt created by Gov. Chet Culver’s I-Jobs program.
In remarks prepared for the Delaware County GOP Dinner, Vander Plaats noted that Culver and legislative Democrats approved a plan this year in which the state has borrowed $800 million for a temporary jobs program that will cost taxpayers more than $1.7 billion over the next two decades. In addition, the bonds cannot be repaid before 2019.
“We may not be able to repay the bonds for at least 10 years but we can create a bond ‘sinking fund’ to repay them. That means we put money into a fund that, with proper investment, earns interest at a higher rate than is being charged on the bonds and we pay back the bonds through that fund,” Vander Plaats said.
He explained, “There are several very big benefits to that approach. First, we don’t kick the can down the road so that future generations are stuck paying this debt. Second, by providing for the I-Jobs repayment now we don’t restrict our future ability to fund state priorities like public safety, infrastructure, education and economic development and human services in coming years. Third, we release Iowans from forced addiction to gambling and gambling revenues through 2019 because we no longer are forced to rely on those dollars to repay a long-term debt. Finally, we send the message that a new era of fiscal and social responsibility has arrived in Des Moines. It makes it clear that we will live within our means and we will pay as we go.”
Former State Auditor Richard Johnson, who serves as Vander Plaats’ state co-chair, noted today that the sinking fund is a debt management and reduction tool often used by a number of nonprofit organizations and for-profit businesses. “Again, Bob Vander Plaats leads with an executive mindset that focuses on solutions versus hurdles,” Johnson said. “His plan to establish a payment mechanism for the I-Jobs bonding is fiscally prudent, needed and doable.”
Vander Plaats also took aim at critics who have claimed his hands would be tied as governor because current state officials agreed to a deal in which the bonds cannot be repaid for at least 10 years.
“It’s always important to take things with a grain of salt, especially when it comes to the I-Jobs program. You’ll remember that Governor Culver claimed it would create or retain as many as 30,000 jobs. It wasn’t long after that an Iowa State University economics professor calculated the number of those jobs at a few dozen over 4,000 and a Heritage Foundation researcher backed him up,” Vander Plaats said. “It wasn’t surprising that Governor Culver exaggerated the benefits of that program more than eight times over yet refuses to take responsibility for saddling the next generation of Iowans with the bill. I’ve said before and I’ll say it again: Chet Culver’s problem is that he has poor leadership instincts. Unfortunately, his problem is Iowa’s problem, but we can make amends next November by voting him out.”
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