Culver: $705 million I-JOBS investment creates 7,079 jobs

UPDATED

CEDAR RAPIDS -- Other than being poorly named, I-JOBS has been a success, according to state officials who released a 107-page report claiming the creation or retention of 7,079 jobs.

The $875 million bonding program was “really about getting Cedar Rapids fixed” after flooding devastated the community in 2008,” Jim Flansburg, spokesman for Gov. Chet Culver said July 28. “It was about flood recovery and modernizing our infrastructure. Then, tangentially, it was about jobs.”

From the way it was designed and implemented “it was obvious it wasn't about creating jobs,” according to Senate GOP Leader Paul McKinley, R-Chariton, who opposed I-JOBS.

I-JOBS, the state's two-year bonding program has invested $705,355,935 in flood mitigation and infrastructure projects -- nearly $100,000 per job, according to the report from Culver's Department of Management.

According to the report, I-JOBS has:

• Created 1,688 projects so far in all 99 counties in the state (through June 30, 2010)
• Invested $705,355,935 toward flood mitigation and infrastructure projects, with more than half dedicated solely to recovery and mitigation.
• Leveraged, through local, state, federal and private funds, $610,585,794.
• To date, that means $1.32 billion of projects are either under way, committed or completed. For the month of June, I-JOBS has created or retained 7,079 jobs. That number doesn't count indirect jobs created or retained, such as employees who make asphalt purchased for road projects) or induced jobs (such as a restaurant that benefits from a nearby I-JOBS project.

“Seven thousand jobs is very strong. That number will grow,” said Richard Oshlo, director of the department. However, he stops short of predicting it will ever reach the 30,000 jobs that Culver predicted when he was lobbying the Legislature for the funding.

“Iowans need more than a month of jobs,” said McKinley, who called I-JOBS the “difference between jobs and work.” Iowa should be investing in “sustainable, long-term, career-oriented jobs.”

Flansburg conceded many I-JOBS jobs are “temporary jobs, not long-term,” but are needed to shore up a severely depressed construction industry at a time when unemployment is at 6.8 percent in Iowa.

Plus, he said, big flood recovery projects, such as replacing Hancher Auditorium in Iowa City, part of a $100 million investment in replacing flood-damaged buildings at the University of Iowa, has yet to start.

Likewise, in Linn County, 55 projects will get $113 million in I-JOBS funds plus and additional investment of $224.6 million from other public and private sources.

“I-JOBS hasn't hit its apex,” Flansburg said, noting June is just the start of the construction season. “We're just starting to fire up the cooker.”

The report triggered another round in the political battle over I-JOBS.

Jeff Boeyink, campaign manager for former Republican Gov. Terry Branstad, who is challenging Culver's bid for a second term, claimed the jobs really are costing Iowans about $240,000 a piece – “Not a great return on investment for Iowa taxpayers.”

“In reality, the I-JOBS program has done next to nothing to create the long-term, sustainable jobs that Iowans so desperately need,” he said. “These projects will only last until the money runs out. In fact, a number of these projects will need renovations by the time the state pays back the bond, which is more than two decades from now.”

The report highlighted the need to elect Branstad, “who understands how to create long-term jobs,” Boeyink said.

Branstad wants to manipulate jobs numbers and investment numbers to suit his purposes instead of looking at the facts, countered Ali Glisson, spokeswoman for Culver's re-election campaign.

“The fact is that I-JOBS has created jobs and improving our infrastructure will improve our long-term job growth prospects,” she said. “The fact is that one-third of the money goes towards flood recovery and mitigation efforts.”

She pointed out Branstad used bonding during his 16 years as governor, but opposes Culver's use of bonds for flood recovery and infrastructure modernization.

“What is Terry's plan?” Glisson asked.

In another round of the war over I-JOBS, Gov. Chet Culver's Department of Management released a 107-page report claiming the creation or retention of 7,079 jobs.

I-JOBS, the state's two-year bonding program has invested $705,355,935 in flood mitigation and infrastructure projects -- nearly $100,000 per job, according to the report.

The cost is even higher, according to former Republican Gov. Terry Branstad, who is challenging Culver's bid for a second term.

Branstad's campaign manager Jeff Boeyink claimed the jobs are costing Iowans about $240,000 a piece.

“These are short-term construction jobs, not the long-term jobs Gov. Culver promised when he proposed I-JOBS,” Boeyink said. The $1.7 billion cost of repaying I-JOBS bonds “is not a great return on investment for Iowa taxpayers.”

According to the report, I-JOBS has:

Created 1,688 projects so far in all 99 counties in the state (through June 30, 2010)Invested $705,355,935 toward flood mitigation and infrastructure projects, with more than half dedicated solely to recovery and mitigation.Leveraged, through local, state, federal and private funds, $610,585,794.

Created 1,688 projects so far in all 99 counties in the state (through June 30, 2010)Invested $705,355,935 toward flood mitigation and infrastructure projects, with more than half dedicated solely to recovery and mitigation.

Leveraged, through local, state, federal and private funds, $610,585,794.

To date, that means $1.32 billion of projects are either under way, committed or completed. For the month of June, I-JOBS has created or retained 7,079 jobs. That number doesn't count indirect jobs created or retained (such as employees who make asphalt purchased for road projects) or induced jobs (such as a restaurant that benefits from a nearby I-JOBS project).

But construction employment in Iowa is actually down 2,700 since the I-JOBS bill was passed, Boeyink countered, and nearly 20,000 Iowans have been added to the rolls of the unemployed since this program began.

“In reality, the I-JOBS program has done next to nothing to create the long-term, sustainable jobs that Iowans so desperately need,” he said. “These projects will only last until the money runs out. In fact, a number of these projects will need renovations by the time the state pays back the bond, which is more than two decades from now.”

The report highlighted the need to elect Branstad, “who understands how to create long-term jobs,” Boeyink said.

However, Culver's re-election campaign said that using Branstad's job creation formula of one construction job created for every $25,000 of infrastructure spending, I-JOBS is more successful than the Department of Management report would suggest.

Adjusting for inflation, Culver's campaign spokeswoman Ali Glisson said the total $875 million in I-JOBS bonding should create 15,867 jobs.

“When Branstad wants to sell Branstad's jobs program, estimates are fine to use,” she said. “When Governor Culver's office actually calls the contractors and subcontractors to account for jobs created, according to Branstad, the program is somehow supposed to be considered a failure.”