Senate includes borrowing in infrastructure budget

DES MOINES - A Senate panel Monday approved almost $192.3 million in infrastructure projects for the next fiscal year and called for borrowing another $110 million. That money would be used to upgrade three state buildings.

The proposal now goes to the full Senate Appropriations Committee for consideration. It outlines investments in water-quality improvements, state Board of Regents' building projects, major maintenance of existing state buildings and $42 million in the state's environment first fund.

Overall, the measure, which uses state gaming profits and other sources to pay for infrastructure, tops Gov. Terry Branstad's proposal by less than $3 million, It proposes, however, to use bonding to finance improvements at the Wallace State Office Building, the State Historical Building and the Iowa Law Enforcement Academy. Those projects either were not included in Branstad's plan or were funded on a pay-as-you-go basis.

'I would ask everybody to keep an open mind,” said Sen. Matt McCoy, D-Des Moines, the Senate Transportation, Infrastructure and Capitals budget subcommittee chairman. He predicted the proposal would end up in a House-Senate conference committee.

'Overall, we did what we could with the dollars that we have,” he said.

The infrastructure proposal includes $32.4 million in tuition replacement funding at Board of Regents' institutions and provides money to the pharmacy building renovation at the University of Iowa. The Senate approach uses almost $29 million from a state bond repayment fund to provide one-time money to complete the Schindler Building at the University of Northern Iowa with $15.9 million, directs $9.9 million for dome repairs to the state Capitol and $2.5 million for two projects at the Iowa Veterans Home.

Other significant funding includes $5 million for the Community Attractions & Tourism grants, $5.1 million for an ag water-quality initiative, $1.9 million for ag drainage wells, $9.6 million in natural resources funding for lake restoration and water-quality programs, $3.5 million for state park infrastructure, $1.5 million for water trails and low-head dam programs, $3.4 million for transportation recreational trails, $1.5 million for public transit infrastructure grants and $2.7 million for Iowa Communications Network upgrades.

The governor won't support the idea of borrowing to finance state building improvements, Branstad spokesman Ben Hammes said.

'Gov. Branstad ... always been supportive of the Iowa Historical Museum and the efforts to preserve our state's history. He's also supportive of efforts to renovate the museum and finding solutions to do so,” Hammes said in a statement. 'In fact, Gov. Branstad recommended allocating $65 million to renovations on the historical building over five years from the Rebuild Iowa's Infrastructure Fund. However, with the tight budget picture as it is, the governor believes that taking on more debt is not the right solution to renovating state facilities.”

McCoy said the $110 million in borrowing would cover 22 years at a rate of about 2.5 percent with a $6.5 million yearly repayment. He said that compares to a new construction inflation rate of up to 5 percent. Without bonding, the projects probably would go unfunded for another year.

'You can't always do pay as you go. Unfortunately, we're in a situation now where we don't have the money to do pay as you go,” McCoy said. 'If we don't bond, there's no money. They just continue to deteriorate.”