Culver asks for federal aid for state stimulus plan
By Whitney Woodward Journal Des Moines Bureau| Posted: Tuesday, January 29, 2008
DES MOINES -- While reassuring Iowans that the state's economy is strong, Gov. Chet Culver Monday urged Congress to send state governments a total of $12 billion to fund their own economic stimulus programs and cover growing Medicaid costs.
"We need to take every step possible to make sure our economy stays on track," Culver said.
The governor said he's working with Iowa's congressional delegation to add the state aid component into the proposed $150 billion economic stimulus package being evaluated in Washington D.C. The supplemental package Culver called for Monday is also backed by the National Governors Association.
Half the $12 billion Culver called for would bankroll states' Medicaid payments to individuals and families during potential, future economic downturns.
The other $6 billion would be dolled out to state governments to jumpstart their own in-state stimulus projects.
If the aid is approved, Culver said he would like to steer Iowa's share to some 40-odd road projects across the state. Those infrastructure projects could be started within one to three months of receiving the federal money, Culver said.
"That means putting people back to work and economic investments in our infrastructure," Culver said. "That's the type of thing that I think could help Iowa."
The federal stimulus package currently moving through Congress was drafted to stave off a recession by sending Americans tax rebate checks and implementing temporary tax breaks for businesses.
Iowans stand to receive about $1.5 billion under the current proposal, Culver said. "That would certainly be a good shot in the arm in terms of our economy," he said.
But a chunk of that money would be diverted to the state, unless lawmakers vote to exempt the federal rebates from the state's income tax.
After a noon meeting with legislative leaders Monday, Culver said they agreed to draft a plan forgo the tax on the rebates.
"This isn't meant to be a windfall for the states," Culver said. "It's not meant to balance a state budget; it is meant to simulate a state's economy."
Echoing his Condition of the State address, Culver maintained that the state's economy, buttressed by a "booming" bio-industry and a $600 million rainy day fund, is strong.
"There's no reason that Iowans should fear this economic situation," Culver said.
But recently Iowa's economy has demonstrated signs of fragility. Unemployment reached 4 percent in December -- a nearly two-year high -- and several companies with significant in-state work forces recently announced layoffs, which Culver admitted was concerning.
Senate Minority Leader Ron Wieck, R-Sioux City, urged the governor to create a state stimulus package instead of waiting for the federal plan to be implemented.
Wieck urged Culver to trim state spending and reduce the state's income tax rate for the rest of the year to give Iowans greater spending power. He also noted Iowa typically lags six months to one year behind national economic trends.
"On a state level, we need to respond quickly," Wieck said. "We need to put money back in the pockets of Iowans now. We can't wait until the summer for the rebate checks to arrive."
Whitney Woodward can be reached at (515) 243-0138 or whitney.woodward@lee.net.
"We need to take every step possible to make sure our economy stays on track," Culver said.
The governor said he's working with Iowa's congressional delegation to add the state aid component into the proposed $150 billion economic stimulus package being evaluated in Washington D.C. The supplemental package Culver called for Monday is also backed by the National Governors Association.
Half the $12 billion Culver called for would bankroll states' Medicaid payments to individuals and families during potential, future economic downturns.
The other $6 billion would be dolled out to state governments to jumpstart their own in-state stimulus projects.
If the aid is approved, Culver said he would like to steer Iowa's share to some 40-odd road projects across the state. Those infrastructure projects could be started within one to three months of receiving the federal money, Culver said.
"That means putting people back to work and economic investments in our infrastructure," Culver said. "That's the type of thing that I think could help Iowa."
The federal stimulus package currently moving through Congress was drafted to stave off a recession by sending Americans tax rebate checks and implementing temporary tax breaks for businesses.
Iowans stand to receive about $1.5 billion under the current proposal, Culver said. "That would certainly be a good shot in the arm in terms of our economy," he said.
But a chunk of that money would be diverted to the state, unless lawmakers vote to exempt the federal rebates from the state's income tax.
After a noon meeting with legislative leaders Monday, Culver said they agreed to draft a plan forgo the tax on the rebates.
"This isn't meant to be a windfall for the states," Culver said. "It's not meant to balance a state budget; it is meant to simulate a state's economy."
Echoing his Condition of the State address, Culver maintained that the state's economy, buttressed by a "booming" bio-industry and a $600 million rainy day fund, is strong.
"There's no reason that Iowans should fear this economic situation," Culver said.
But recently Iowa's economy has demonstrated signs of fragility. Unemployment reached 4 percent in December -- a nearly two-year high -- and several companies with significant in-state work forces recently announced layoffs, which Culver admitted was concerning.
Senate Minority Leader Ron Wieck, R-Sioux City, urged the governor to create a state stimulus package instead of waiting for the federal plan to be implemented.
Wieck urged Culver to trim state spending and reduce the state's income tax rate for the rest of the year to give Iowans greater spending power. He also noted Iowa typically lags six months to one year behind national economic trends.
"On a state level, we need to respond quickly," Wieck said. "We need to put money back in the pockets of Iowans now. We can't wait until the summer for the rebate checks to arrive."
Whitney Woodward can be reached at (515) 243-0138 or whitney.woodward@lee.net.
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WS wrote on Jan 29, 2008 1:26 PM:
mp wrote on Jan 29, 2008 8:15 AM: