Iowa Weathers Recession, But Its First-Term Governor, Chet Culver, May Not

Iowa Governor Chet Culver
Culver campaign photo by Pat Tierney
On the campaign trail, Iowa Governor Chet Culver is stressing to voters that Iowa's finances are in relatively good shape. "This is not the federal budget," he says.

DES MOINES, Iowa — From beyond Iowa's borders, it may be hard to understand why this state's first-term governor, Democrat Chet Culver, is fighting for his political life.

Iowa's budget is balanced, with reserve funds to spare. With the exception of pricier cigarettes, taxes haven't gone up on Culver's watch. Revenues are beating expectations, and debt is a fraction of what it is in other states. The unemployment rate, at 6.8 percent, is high for Iowa, but far below the national average.

"I wouldn't trade places with any governor in America," Culver told Stateline in an interview last week.

From the perspective of Dana Allen, however — sitting on a shaded curb outside a downtown employment center here one recent afternoon — things don't look as good.

Allen, 37, is a lifelong Des Moines resident who was laid off by a nonprofit human services provider in April. Her responsibilities once included helping others find work. Now, the tables have turned. Sitting outside the Iowa Workforce Center, Allen busily filled out an application for a job at a plastic parts manufacturer a few miles outside of town. "Maybe I can get into a bigger company," she said, "that isn't going anywhere or shutting down."

Allen is a registered Democrat, and she has few kind words for Culver's Republican opponent, Terry Branstad, a candidate who is familiar to most Iowans because he was governor himself for a record four terms in the 1980s and 1990s. In spite of her party affiliation, however, Allen still isn't sure who will get her vote in the fall. The main thing that concerns her, she says, is finding a job, and she remembers Branstad's era as simply "a better time" for the state.

Ten weeks before Election Day, sentiments like Allen's spell deep trouble for Culver, who is down 16 points in the latest poll and, in Branstad, faces a battle-tested campaigner who has never lost in the 11 contested primary and general elections he has entered in his career. Branstad also had the good fortune or the skill — it depends on whom you ask — to finish his time in office with a $900 million budget surplus, a point he rarely forgets to drive home on the campaign trail, adding that he also governed during some tough times.

It's a strategy that seems to be working. When even Democrats such as Allen are lukewarm about Culver, it's easy to see the depth of the challenges that face the party this election cycle.

More broadly, however, Allen's uncertainty about Culver also suggests that incumbent governors of both parties may be at risk in November, even in places that appear to be withstanding the downturn relatively well. For many voters, in Iowa and elsewhere, it doesn't matter that unemployment is lower in their state than it is next door, or that budget shortfalls may not be as severe as analysts originally predicted. For these voters, the economy is not strong enough, the pace of the recovery is too slow, and the buck ultimately stops with the person who is in charge now.

An unmotivated base?

Beyond the state of the national and local economies, there are other reasons why Culver — the 44-year-old son of John Culver, a former congressman and U.S. senator from Iowa — is struggling in his reelection bid.

While Culver has received the formal endorsement of the teachers' and state workers' unions, his ties to organized labor haven't been iron-clad. Some analysts suspect that public workers, who are among the pillars of the Democratic base, might not be as motivated to knock on doors for this governor as they might have been for another, more liberal Democrat.

Relations between Culver and labor hit a low in 2008, when the governor vetoed a bill that would have expanded collective bargaining rights for public employees. The move so infuriated labor unions that one union lobbyist, when asked what Culver's biggest misstep as governor has been, asked, "Have you talked to anyone around here?"

Culver has governed as a political centrist in other ways. To balance the budget last year, he and lawmakers relied on an across-the-board spending cut of 10 percent that slashed hundreds of millions of dollars from key areas such as public education and health and human services. While deep budget-slashing has won New Jersey Governor Chris Christie plaudits from national Republicans, it is not typically the way to draw Democrats to the polls in droves, says Mack Shelley, a political science professor at Iowa State University.

"Folks on that side of the political spectrum," Shelley says, "tend to see actions like that as not being true to the Democratic ideals."

With registered Democrats outnumbering Republicans by 100,000 in Iowa, Branstad has to count on Republican energy surpassing that of the Democrats in November. In an interview, he noted that 230,000 Republicans turned out to nominate him in a closely contested, three-way primary in June, and argued that Democrats are nowhere near as excited to cast their ballots. "I think Culver's got a much bigger problem with his base than we do," Branstad said.

State borrowing under microscope

The Branstad and Culver campaigns already are attacking each other relentlessly on the airwaves and over e-mail. One subject in particular, however, has become an unusual lightning rod on the campaign trail and put Culver on the defensive: state borrowing.

An independent report from Moody's Investors Service last month found that Iowa's per-capita debt burden is the second-lowest in the nation — a sliver of what it is in Connecticut, Massachusetts, Hawaii and other states. Culver has touted the report as an example of his good fiscal stewardship during the recession, but Branstad has pushed back aggressively.


Iowa Former Governor Terry Branstad
Photo courtesy of Branstad campaign
Terry Branstad, the longest-serving governor in Iowa history, is hoping to reclaim the job by focusing attention on what he sees as Culver's mismanagement.

The report is "baloney," Branstad says, noting that it came from the same source that "gave Enron a AAA rating just before they went under." One of Branstad's supporters, Republican State Auditor David Vaudt, issued his own report a few days later, finding that Iowa's debt is 14 times higher than what Moody's found it to be.

Independent analysts generally agree that Iowa's debt, no matter how it is calculated, is substantially lower than that of other states. But the back-and-forth over the Moody's report points to a larger theme that Branstad — and Republicans nationally — are trying to drive home this year. They argue that Democrats, from the Obama administration on down, have increased deficits and shifted the tax burden to future generations.

Fears about debt are particularly resonant in Iowa, which, like several other states in the Midwest, historically has a strong aversion to borrowing money. Branstad is tapping into those concerns by training much of his attention recently on a Culver plan known as I-JOBS , an $875 million borrowing package that was designed to help the state repair its infrastructure and create employment following devastating floods in 2008.

Branstad says the I-JOBS plan, which is equal to nearly 17 percent of Iowa's yearly budget, is a "disaster" that saddles residents with debt payments that will take decades to pay off, while not doing enough to put people back to work.

"Culver subscribes to the Illinois, California and New Jersey way of trying to borrow your way to prosperity," Branstad says, claiming that if he returns to the governor's mansion, he will operate government on a "pay-as-you-go" basis. Asked whether that means he will not borrow money even for major capital projects such as building schools and prisons — something most states do — he says, "I think you have to look at it project by project."

Trying to blunt criticism over I-JOBS, Culver has pointed to Branstad's own record on borrowing money — the former governor did his fair share of it — and argues that there was no reasonable alternative to I-JOBS, given the economic downturn, the state's relatively low debt burden and the billions of dollars in damage caused by the 2008 floods in Cedar Rapids and other population centers. "Does Branstad think we should have a bake sale to rebuild our second-largest city?" Culver asks.

'This is not the federal budget'

In some ways, Culver's defense of his record echoes the arguments that Democrats in Washington, D.C., are making about their own accomplishments over the last two years. His administration, for example, regularly releases totals of "jobs created or saved" by the I-JOBS plan. But Culver, who says he would welcome Obama to Iowa to campaign for him in the coming weeks, is being careful not to be associated too closely with Washington. More than anything, he is trying hard to persuade voters that there is a bright line between the federal government's well-documented money problems and Iowa's own finances, which are a point of pride for him.

"Too many [voters] are having tough economic times, and so it's harder to get them to focus on some of this good news," Culver says. "But I'm going to keep doing my best to make sure they understand that this is not the federal budget. This is a separate state budget that's balanced, with a AAA bond rating and $500 million in our cash reserves, and a smaller state budget today than the one I inherited in 2007."

With a little more than two months to go, Culver says, "I couldn't be more optimistic."


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