Friday, July 18, 2008

News From Iowa GOP House Minority Leader Chris Rants

Bogus Bonding

The revenue in the Restricted Capital Fund (RC3) comes from the issuance of tax-exempt bonds for the non-securitized tobacco settlement dollars. The projects receiving funding from this source must meet the IRS definition of vertical infrastructure or the state is penalized due to the bond status.

Similar to the funding for the prison and the Veterans Home, projects that are funded by the RC3 may not be spent until the bonds have been issued. As many of you may recall, House Republicans warned of the status of the bond market during the legislative session. The Democrats must have found that to be true because they have yet to issue the bonds. We’ve even been informed that the bonds would not be issued until the fall.

The delayed issuance of the bonds is problematic because it means that community colleges will not receive their infrastructure dollars, lake improvements will not take place and community based corrections will not be improved.

While dollars to the above groups are being stalled, an organ in Northeast Iowa will still receive $1 million, a Dubuque Amtrak Depot and Platform will be funded despite the fact that Amtrak does not have service to Dubuque and a Riverwalk project in Des Moines will receive its $750,000.

A bloated budget and large state projects that hinge on the variability of the bond market can only mean one thing—dangerous outcomes for Iowa taxpayers. Similarly to the rocky housing market and subprime lending, projects that Democrats have committed Iowa taxpayers to could end in disaster with our children left holding the bag, having to pay for it for several years.

I know bonding is a boring topic and with all the other things going on in your life, it’s not something you think about. But as a taxpayer of this state, you should pay attention to the bogus bonding plans going on because some of the Democrat leaders are talking about using similar bonding for flood relief purposes. Clearly, they haven’t gotten this bonding right so we must remain hesitant about the options to use similar bonding for flood repair.

This is just another one of those things you won’t read in newspaper but for the sake of your pocketbook, you need to know about.

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