I-JOBS job count may be lower than estimates

More than 300 construction jobs will be created in the project, funded with the help of I-JOBS, to replace the Iowa City
More than 300 construction jobs will be created in the project, funded with the help of I-JOBS, to replace the Iowa City sewage treatment plant that was flooded last year. This file photo of the plant from June 16, 2008, is the view looking north along the flooded Iowa River from Highway 6. (Brian Ray/The Gazette)

As its name implies, Iowa’s $830 million I-JOBS initiative is about job creation.

So where are they?

At one time, Gov. Chet Culver’s administration estimated 21,000 I-JOBS jobs over three years. It doesn’t use that number any longer, because it was based on a study of spending on roads, bridges and infrastructure, said Culver spokesman Phil Roeder. In reality, I-JOBS projects are more diversified.

Whatever his estimate, Culver is more optimistic than Iowa State University economist David Swenson, who said “politicians always want to inflate job numbers.”

Using Iowa-specific data, Swenson’s economic model suggested 4,000 total annual jobs if I-JOBS spends $750,000 over three years. Each $1 million spent on roads, bridges and infrastructure, for example, would create only 9.25 construction jobs and 5.7 other jobs.

A $27 million grant for flood recovery and protection along Coralville’s First Avenue will create jobs for 20 bartenders and three clergy, according to the city’s application approved by the I-JOBS board last month. All told, though, the $36 million project will create nearly 700 jobs before it is completed in 2011 and retain nearly twice as many.

That’s one reason the project received more than 20 percent of the $118.5 million I-JOBS has awarded to help communities rebuild from last year’s floods and tornadoes. The program created by the 2009 Iowa Legislature also is designed to help cope with a nationwide recession that has contributed to 114,000 unemployed Iowans.

Although job creation was a major selling point in winning legislative approval of I-JOBS, it counted for just 20 percent of projects’ scores when it came to awarding grants. Of the 53 grants awarded, 21 scored 30 or higher out of a possible 40 points for jobs and economic impact. Energy efficiency and sustainability, financial feasibility, benefits for disaster relief and readiness to proceed were also weighed.

Roeder cautions against getting hung up on the job numbers. “Regardless of the estimates, you’re talking about thousands of jobs, and that’s what matters in the end,” he said.

What matters in the end, said House Minority Leader Kraig Paulsen, R-Hiawatha, is Iowans will be left with 20 years of debt for expensive jobs and projects that, in some cases, will have life cycles that expire before the $1.7 billion debt is repaid.

I-JOBS will mostly create short-term construction jobs, “and once the money is gone, the jobs are gone,” Paulsen said. Swenson agreed “construction impacts of this nature are temporary, not durable and sustained.”

I-JOBS rules require applicants to “complete the projects as they were presented in the application,” and projects will be audited. However, I-JOBS official admit there’s little likelihood the state will be able to recapture funds if job creation falls short of the number in applications.

Roeder isn’t interested in debating “worst-case hypotheticals,” he said. I-JOBS was designed “to get the money out quick and have an impact.” The $118.5 million in grants approved by I-JOBS is being matched by $340 million in other investment — nearly a three-to-one match, he said.

In addition to jobs created, “communities are going to have better infrastructure, whether that’s the University of Iowa being rebuilt, levees and flood prevention measures to prevent future damage, safer bridges or wastewater treatment plants that will be around for another generation” as a result of I-JOBS, Roeder said.

On that, he gets some support from Swenson, who said looking only at the job creation numbers ignores other benefits.“They are good jobs,” Swenson said. “A big fraction — 47 percent — of the I-JOBS spending will find its way into labor income. At the same time, Iowa is getting very valuable social goods that will serve us for 20 years.”