I-JOBS: A great program with a flawed sales pitch

The Iowa Department of Management released a report on the I-JOBS state bonding initiative yesterday. Click here for the pdf file (more than 100 pages). Governor Chet Culver’s office highlighted how much I-JOBS has invested in infrastructure, particularly in the areas of flood recovery and mitigation, as well as how many jobs have been created or retained. Iowa Republicans continue to claim I-JOBS failed, having funded only temporary jobs at a high cost.

The Department of Management’s report documents about 1,700 projects that could not have gone forward without I-JOBS money. Unfortunately, recent media coverage of I-JOBS hasn’t focused on its clear benefits. The dominant media frame has become a he-said, she-said take on whether I-JOBS has lived up to Culver’s job creation promises last year.

Governor Culver’s office hailed the achievements of the I-JOBS program in a July 28 press release. Excerpt:

I-JOBS was created following the historic flooding in 2008 in which cities and towns were overwhelmed with needs.

The state needed a program that would:

Help Iowans recover immediately

Mitigate future flooding through infrastructure

Rebuild and update infrastructure to put Iowa in a position to grow

Create short-term good-paying jobs during the worst economic downturn since the Great Depression.

In I-JOBS’ first year, the goal was to get the money out quickly to communities that needed it.

Now in its second year, we have created a new report that increases transparency, and enables Iowans to readily understand how their money is being spent, where it is being spent, and how the I-JOBS funds have led to even bigger projects thanks to leveraging with local, state, federal and private funds.

The report shows that 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 [2010] alone, 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).

That job creation number is higher than I expected. Last year Iowa State University economics professor Dave Swenson estimated that I-JOBS would create about 4,050 jobs. Swenson also argued that I-JOBS shouldn’t be evaluated solely in terms of job creation; in addition to funding “good jobs,” the infrastructure projects are giving Iowa “very valuable social goods that will serve us for 20 years.”

Republican talking points refuse to acknowledge any long-term benefits from I-JOBS: “temporary government make-work”; “once the money is gone, the jobs are gone”; “These projects will only last until the money runs out.”

Following Republican logic, building the interstate highway system was just temporary government make-work in the 1950s. But the interstates boosted economic growth and productivity growth for decades.

Local governments and business leaders understand that infrastructure investments support the economy. The proof is in the I-JOBS report’s Exhibit B, which runs from pages 93 through 101. It shows how I-JOBS grants have helped secure other funding, including private donations, for a range of projects. Private donors and local governments would not dig deep to pay for “temporary make-work.” They anticipate long-term gains for their area. Here is one example, from page 95 of yesterday’s report. About $5.3 million from the I-JOBS “disaster recovery and prevention” funds went to rebuilding the Chillicothe Bridge and Rock Bluff Road in Wapello County. I-JOBS contributed approximately half the funding for that project, which

will rebuild, grade and pave roadway, and replace the bridge across the Des Moines River, including an extension to cross railroad tracks at Chillicothe. Besides alleviating chronic flooding problems, the project will be an energy saver for highway users because it cuts 10 miles off a trip from Highway 63 to the primary retail area in Ottumwa. It will also be an economic benefit to the area – creating and retaining employment at Ottumwa Generating Station, the Iowa Bio-Processing Campus at Eddyville, and the Ottumwa retail community.

That’s just one of nearly 1,700 I-JOBS projects. Yet Republicans claim with a straight face that Culver has done nothing for the private sector.

Republicans also cite current unemployment levels as proof that I-JOBS has failed. Of course, no one ever said I-JOBS would insulate Iowa from net job losses during the worst national recession in 60 years. Declines in employment would have been even worse if I-JOBS projects hadn’t employed thousands of people during a slump in private-sector construction.

Meanwhile, Iowa Republicans are still exaggerating the I-JOBS repayment costs.  Yesterday GOP state chairman Matt Strawn and Terry Branstad’s campaign manager Jeff Boeyink again said I-JOBS will cost the state $1.7 billion. That was the original estimate, but the bonds were sold at a lower interest rate, which significantly reduced the repayment costs. Most media reports simply quote Republicans on the $1.7 billion figure, without fact-checking.

Griping about poor media coverage is a favorite hobby for political junkies, but I’m not trying to pin all the blame on journalists here. Culver should not have used overly optimistic job creation numbers when legislators were considering the bonding program in 2009. It’s always better to underpromise and overdeliver.

For that matter, whoever thought of naming this infrastructure bonding program I-JOBS made a mistake. Calling the program I-JOBS opened the door for Republicans to declare the program a failure because bonding didn’t prevent net job losses. Republican legislators and candidates should be on the defensive for denouncing I-JOBS without offering their plan for flood recovery and prevention. Instead, Republican-leaning journalists are now able to make the story about Culver not knowing exactly how many jobs his I-JOBS program created. That frame was already influencing media coverage last year, as in this September 2009 story James Q. Lynch wrote for the Cedar Rapids 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. […]

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.

Kathie Obradovich’s latest column for the Des Moines Register also highlights questions over how many jobs were created:

Iowa will borrow about $675 million for a program that Gov. Chet Culver insisted be called I-JOBS. He has made the I-JOBS program the centerpiece of his re-election campaign. But he can’t nail down just how many jobs we’re getting for the money. He should have called it I-(don’t know how many)-JOBS.

Recipients of grants for I-JOBS projects weren’t even asked to report on job creation during the first year of the program. Governor’s spokesman Jim Flansburg said everybody was too busy getting money out the door as quickly as possible for flood recovery.

But that didn’t stop Culver from using impressive-sounding job creation figures to sell the program. At one time, he was predicting as many as 30,000 jobs from the infrastructure projects. The governor’s office used estimates from federal transportation projects to reach that number, but stopped using it when university economists started poking holes in it. […]

Culver’s staff argues, correctly, that the job numbers are not really the most important element of the program. I-JOBS has been useful at generating some sorely needed economic activity in Iowa as it struggles to recover after the recession. Some of the infrastructure created will spur more business growth. Some will add to Iowans’ quality of life, which in turn is attractive to businesses. Much was necessary for recovery from the 2008 floods.

The fact remains that Culver emphasized job creation as a selling point for the program. He is paying now for the failure at the time the program was created to make sure everyone understood how it should be measured in terms of job creation and the return on the state’s investment. Legislation and rules should have spelled out from the beginning how jobs would be defined and counted.

Disputes over the number of jobs created should not overshadow what we know with 100 percent certainty about I-JOBS. Without the state bonding, we would not have had the money to rebuild civic and cultural landmarks flooded in 2008. Without the state bonding, we would not have been able to secure $500 million in federal matching funds to rebuild the University of Iowa campus. Without the state bonding, Iowa would be doing little if if any flood mitigation work.

I-JOBS alone won’t prevent future damage from flooding. Land use practices including building on floodplains in urban areas and increased drainage of agricultural land unquestionably contributed to the record 2008 floods. Climate change will probably increase the frequency of extreme weather in the U.S., and the Iowa State University Climate Science Program provides some frightening statistics about what’s in store for our state. Todd Dorman is right: at some point we need to update our policies on watershed management.

But at least Culver recognized the need to use I-JOBS to fund flood mitigation projects as well as clean up after the 2008 disaster. Then-Governor Terry Branstad did nothing on that front after 1993’s catastrophic floods and has “had little to say” about flood prevention lately “except that he doesn’t favor restrictions on development in the 500-year flood zone.” Branstad should explain why he didn’t make flood prevention a higher priority in the 1990s and how he would have funded reconstruction efforts after 2008.

Branstad’s running mate Kim Reynolds danced around a question on flood mitigation during a recent interview with Adam Sullivan of the Iowa Independent:

Reynolds avoided answering whether Culver’s I-JOBS program has made the state better-equipped to deal with floods. But just like Branstad, she left her flood prevention plan vague.

“I think we need to take a comprehensive approach to [flood projects] and make sure that all parties are working on that,” Reynolds said. “We need to be sure we’re not piecemealing it and we’re doing it right. It needs to be a holistic approach and we’re all moving forward together.”

Talk is cheap, Senator Reynolds. Who’s going to implement that “holistic approach,” and how will you pay for it? By the way, since you voted against I-JOBS, where would you have found the money to rebuild the University of Iowa campus?

Share any relevant thoughts in this thread.

UPDATE: Dorman’s on my wavelength today:

Culver is in a numbers shootout he can’t win, and he has himself to blame. He once bragged that I-JOBS would create 21,000 to 31,000 jobs, thus making an overinflated claim the main measuring stick for the program’s success.

Culver’s backers insist this debate should be about $328 million for flood recovery efforts. Sure. But maybe they shouldn’t have named it I-JOBS. How about I-RECOVER or I-BUILD? […]

Republicans love to smack I-JOBS, but have offered no ideas of their own on how to pay for Iowa’s infrastructure needs. Believe it or not, Culver’s $875 million doesn’t come close to making all the repairs and replacement needs that piled up over years of underfunding and benign neglect.

If I-JOBS wasn’t the right way to pay for flood recovery needs, what should the strategy be next time? It seems like the next 500-year flood is due any minute now. We’d love to see the plan.

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