Fact Checker: Iowa GOP criticizes Hatch’s support of I-JOBS

Introduction

'In 2009, Des Moines liberal Jack Hatch supported $1.7 billion in new debt on a failed I-JOBS plan that will take more than 20 years to pay off, despite not reaching its job creation goal.”

Source of claim

Republican Party of Iowa

Analysis

In a colorful mailing in which the Republican Party of Iowa dubs Iowa's Democratic gubernatorial candidate Jack Hatch as 'Casino Jack,” the GOP criticizes Hatch's support of the 2009 I-JOBS program.

The program, approved during the 2009 and 2010 Legislative sessions, authorized $875 million for state infrastructure and modernization projects. The goals of the program, according to the Iowa Department of Management in 2010, were to 'support or retain jobs, rebuild communities impacted by the 2008 floods and promote long-term economic growth.”

Hatch was among 30 state senators - all Democrats - who voted for a funding package for I-JOBS, according to VoteSmart.org. Legislation authorizing the sale of bonds to pay for the program passed with 63 percent of the Senate vote and 55 percent of the House vote.

I-JOBS is funded through the sale of bonds to be repaid by 2038 with state gambling revenue. The total net state revenue required to pay off the principal and interest on the bonds is $1.1 billion, according to Stefanie Devin, deputy state treasurer.

Included in the program is $100 million for flood-mitigation projects at the University of Iowa, which sustained water damage to more than 20 buildings in the 2008 floods. That portion of the program is initially paid with student tuition and fees, but the Iowa Legislature reimburses the UI for these debt payments out of state infrastructure funds.

The UI debt is to be repaid by 2036, spokesman Tom Moore said.

For October 2010, the program has created or retained nearly 6,200 jobs, with most related to construction. The DOM did not track indirect jobs, such as those created at parts manufacturers or restaurants near jobs sites.

I-JOBS provided funding to nearly 4,000 projects so far, with 44 percent of the money going to Linn, Johnson and Polk counties, according to a summary the DOM provided The Gazette Thursday. Many of these projects were connected to recovering from the 2008 floods.

Cedar Rapids projects that received partial I-JOBS funding include the $20 million central fire station, $18.5 million renovation of the Veterans Memorial Building and $49 million Public Library.

Conclusion

The Iowa GOP claim has several parts. It's true Hatch voted for I-JOBS. It's also true the $875 million program was new debt projected to take more than 20 years to repay.

It's not true the program cost $1.7 billion. Gov. Terry Branstad's former chief of staff Jeff Boeyink used this figure in July 2010, when his boss was running against then Gov. Chet Culver. The DOM said at that time the total cost to repay the principal and interest on the I-JOBS bonds would be $1.23 billion. The State Treasurer's Office now reports the cost will be closer to $1.1 billion.

The ad claims I-JOBS failed to meet job goals, but it appears that wasn't the primary purpose of the program, despite the name. Even Sen. Paul McKinley, R-Chariton, who opposed I-JOBS while serving as Senate minority leader from 2009 to 2011, told The Gazette in July 2010 that 'it was obvious it wasn't about creating jobs.”

Culver predicted in late 2009 I-JOBS would spawn 30,000 jobs. Those jobs have not been documented. A snapshot from October 2010 shows about 6,200 temporary jobs at that time due to I-JOBS. If there was a cumulative accounting for all direct and indirect jobs supported by I-JOBS projects since 2009, we might have a better idea whether the program has met Culver's prediction.

But tracking the number of jobs created by I-JOBS was not a requirement of the program, DOM Director Dave Roederer told The Gazette earlier this week.

The GOP claim's truthfulness is split, but since we have to go one direction or another, we will go with mostly true since Hatch did support taking on new debt, which seems to be the key accusation in the GOP mailing.

Sources

Legislation authorizing debt: http://coolice.legis.iowa.gov/Legislation/83rdGA/enrolled/sf376.html

Voting record for I-jobs financing: http://votesmart.org/bill/votes/25779#. VCnA9PldWcI

Department of Management 2010 report on I-JOBS: http://www.dom.state.ia.us/state/ijobs/files/I-JOBS%20Report%20to%20the%20Governor%20December%2030%202010%20Final.pdf

I-JOBS projects in Cedar Rapids: http://thegazette.com/2009/06/29/i-jobs-board-awards-45-million-to-cr-projects/