Terry Branstad's reckless disregard for facts

While Terry Branstad continues his so-called “truth in budgeting” tour around Iowa, he and his campaign staff deliberately spread false information about Governor Chet Culver’s record. Last week Branstad’s campaign released perhaps its most deceptive advertisement yet, and that’s saying something.

When numerous specific claims in the ad were debunked, Branstad didn’t apologize or pull down the ad in order to correct its mistakes. His conduct during the past week proves that he doesn’t inadvertently misstate facts during his stump speeches or under the pressure of a debate. He appears to have made a political calculation: don’t worry about the truth if lying helps him win an election. Culver’s campaign did a good job identifying the latest ad’s falsehoods here, but let’s take a closer look at some of the problems with Branstad’s campaign narrative.

The tough economy has put the wind at challengers’ backs in many state elections, and Branstad naturally wants to emphasize unemployment in making the case against Culver. However, Branstad greatly exaggerates the number of jobs Iowa has lost.

Branstad’s ad claims 20,000 jobs were lost in Iowa between May 2009 (when Culver signed the I-JOBS legislation) and June 2009, the latest month for which data are available. Tom Beaumont asked some economists about that claim:

But the ad also says there are roughly 20,000 fewer jobs in Iowa today. Iowa Workforce Development puts the figure at 5,000.

Unemployment has increased since the bill was enacted, a full percentage point, to 6.8 percent in June.

But economists said Branstad is blurring unemployment and job declines, creating the impression that Iowa’s job environment has worsened more dramatically than it has.

“The unemployment statistic is comprised of many people, but not all of them have lost their jobs,” such as college students just entering the job market, said Iowa State University economist David Swenson. “Equating that number with the decline in jobs is not correct.”

From May 2009 to June 2010, total nonfarm jobs dropped from 1.48 million to 1.475 million, a decline of 5,000 jobs, according to Iowa Workforce Development statistics. The number of unemployed people in Iowa has grown from 96,200 to 113,600, an increase of 17,400. But the unemployment figure includes the unemployed looking for work again after giving up looking, retirees re-entering the work force and college students seeking summer work, not just the newly laid off, Swenson and others said.

“Obviously, you have a decline in the number of jobs, and Branstad’s point that there hasn’t been job growth is valid,” said Iowa State economist Peter Orazem. “But the drop is nowhere near 20,000.”

Beaumont’s article appeared in the August 3 edition of the Des Moines Register. Five days later, Branstad hasn’t apologized or altered his campaign’s ad in any way.

Branstad also exaggerates how many Iowa teachers have lost their jobs. The ad cites a National Education Association estimate from April 2010 in claiming, “Nearly 1,000 teachers to be laid off.” Sorry, no:

Branstad is misleading Iowans here several ways. First, he uses an estimate from April 2010. Since that time several school districts have scaled back their layoffs as additional funds have become available. In April 2010, the Des Moines School district was proposing 74 layoffs, after initially proposing 346 [3]. By July the number had dropped to 36 laid off teachers [4]. Fact is many early projections of teacher layoffs did not account for additional appropriations for education later signed into law by the Governor and school districts finding innovative grants and efficiencies.

Branstad has stated that he would not use one-time funds. This includes federal stimulus funds for education. Had Iowa done that, 5,765 jobs education jobs would have been eliminated [5].

I am still waiting for Branstad to explain how he would have funded K-12 education in the current-year budget without using any one-time sources of funds. I also haven’t seen his campaign on whether Chuck Grassley was right to vote against additional federal funds to support Iowa’s education budget in the 2011 fiscal year.

The I-JOBS infrastructure bonding initiative will be a central part of Culver’s case for re-election, so Branstad keeps trying to convince voters that it accomplished nothing at great cost. I discussed various short-term and long-term benefits from I-JOBS here. Branstad’s latest ad inflates the I-JOBS costs in several ways.

The ad claims “Chet Culver borrowed nearly a billion dollars to create jobs.” Wrong:

I-JOBS is a $875 million program. However, $65 million of it is funded from non-bonded sources such as Rebuild Iowa Infrastructure Fund Appropriations, RISE Transportation Funds, and federal recovery funds. Thus, $810 million are bonded.

Last week in his web ad, Branstad rounded $810 million to $900 million. This week he’s rounding it to $1 billion.

Culver’s campaign also pointed out that Branstad presided over much more state borrowing as governor. Whereas Culver has bonded solely for capital investment, Branstad also used short-term borrowing to paper over cash flow problems because of his fiscal mismanagement.

Branstad exaggerates the I-JOBS repayment costs too. Citing the Legislative Services Agency, Branstad’s ad claims I-JOBS will cost taxpayers $1.7 billion. Citing the text of Senate File 376, Branstad claims taxpayers will be on the hook for $55 million a year for 23 years. Bleeding Heartland has covered this ground before. $1.7 billion was the original, conservative estimate for how much I-JOBS would cost, but strong investor demand and Iowa’s gold star credit rating drove down the interest rate when most the bonds were sold in July 2009. Repayment costs of $43 million a year were locked in more than a year ago, bringing the total cost down to about $1.1 billion.

Almost every day I see prominent Iowa Republicans repeating the inflated $1.7 billion and $55 million a year estimates. I don’t know why so many journalists let them get away with it.

By the way, payments on I-JOBS bonds will come out of gambling revenues. By claiming “taxpayers” are on the hook, Branstad wrongly implies that the state’s general fund will repay the bonds.

The debate over I-JOBS costs continued last week after Moody’s issued a report on state debt across the country (pdf file). Culver’s office hailed the fact that Iowa had the second-lowest state debt per capita in the nation according to Moody’s. Branstad’s campaign manager Jeff Boeyink responded that the Moody’s report “gives a significantly distorted view of the state debt situation” in Iowa because it did not factor in the I-JOBS borrowing. Not only did Boeyink repeat false claims about I-JOBS costs ($55 million a year), he compounded them by suggesting I-JOBS had added $1.7 billion to Iowa’s state debt, instead of $810 million.

Moody’s did not include I-JOBS borrowing in last week’s report, because it covered state debt through the 2009 fiscal year, ending on June 30, 2009. However, Iowa’s debt load remains low even if you include I-JOBS. Jason Clayworth reported for the Des Moines Register,

Rough numbers indicate that the I-JOBS debt alone has increased Iowa’s debt by 277 percent from roughly $73 per person to around $275.

If debt in other state’s remains the same, Iowa’s per capita ranking will slip a few notches from the second lowest to the fourth lowest in the nation.

State debt according to the Moody’s report – prior to the I-JOBS borrowing – was nearly $219.3 million.

So, assuming other states didn’t borrow a dime during the 2010 fiscal year, Iowa’s state debt per capita would go from second-lowest before I-JOBS to fourth-lowest after I-JOBS. That’s hardly a crushing burden on future generations.

Looking at Moody’s report shows how absurd it is for Republicans to depict I-JOBS borrowing as unaffordable. As of June 30, 2009, just before Iowa sold the first $600 million of I-JOBS bonds, Iowa’s net tax-supported state debt per capita was $73 (49th place).Iowa’s net tax supported state debt was 0.2 percent of personal income (48th place). Iowa’s net tax-supported state debt as a percentage of GDP was 0.16 percent (48th place). Iowa’s total net tax-supported state debt was about $219 million (46th place).

Politically, I understand why Branstad is sticking to his campaign’s narrative on I-JOBS. He can’t explain how he would have financed flood recovery projects after the devastation of 2008. His administration didn’t invest in flood prevention measures after the 1993 floods either. It’s easier to claim we can’t afford I-JOBS than to acknowledge that Iowa was in a strong fiscal position to borrow money for capital investment.

Commenting on Branstad’s latest ad, Culver told the Des Moines Register, “I have a lot of faith that the voters will see through the rhetoric and make their own decision, […] I’m glad the facts are coming out and it’s being pointed out that the Branstad campaign are exaggerating their numbers and not telling the truth.”

I hope Culver is right, because Branstad looks ready to repeate his false and exaggerated claims from now until November.

Share any relevant thoughts in this thread.

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  • Maybe Culver could find some Iowans who found a job through I-JOBS

    and make some ads where they talk about their unemployment, then the impact of getting back to work, and pointing out that if Branstad were guv, “I’d still be unemployed.”

    Unfortunately, I don’t think the “dueling statistics” approach is going to work. Journalists are just too innumerate to deal with it effectively, and the general public ain’t so hot at dealing with stats either.

    • I completely agree

      and I hope they have been making ads with people who directly benefited from I-JOBS programs. I know someone who now has a permanent job thanks to an I-JOBS project in Windsor Heights.

      I noticed that today Culver, Harkin and Boswell were at a press conference with a Des Moines teacher who was laid off, but will now be hired back thanks to the federal fiscal aid bill the Senate approved last week (the one the House is expected to pass this week).

  • Kim Renyolds

    was spreading the lies that I-JOBS had not created a single job since its inception apparently at the Lee County GOP Convention.  You know, its okay to disagree on the overall impact of the program, but outright lies like that are not helpful.