Gov. Chet Culver asked the legislature to borrow $700 million to repair and rebuild Iowa’s infrastructure from last summer’s natural disasters and reboot the sagging economy.

The $700 million will help pay for rail, trails, public buildings, water and sewer treatment facilities, the utility grid and telecommunications over the next several years, Culver said in his annual Condition of the State address.

“We’re cutting back on the day-to-day expenditures of state government,” Culver said. “But at the same time, we will be investing in bricks and mortar to create jobs and keep our economy going.”

The state can issue bonds, which is like borrowing money since the state must pay the original cost plus interest in the future. Culver said the $56 million in annual gaming revenue would repay the bonds over 20 years.

Culver noted Iowa has a Triple A bond rating, the highest possible credit rating and making it an ideal time to borrow money.

The new Rebuild Iowa Infrastructure Authority will borrow up to $700 million over the next several years by issuing bonds and provide grants and loans for state projects.

Forty-three million dollars will come from Iowa’s Rainy Day Fund.

Although there is talk of a possible gasoline tax increase to help pay for infrastructure, Culver said he is not in favor of new taxes.

“Because of the national recession, I believe this is no time to raise taxes on hardworking Iowans,” he said.

Balancing the state’s budget is the “second real challenge” the Iowa legislature faces.

“In addition to the devastation of the natural disasters, Iowans have been hit with another perfect storm, but this time it’s an economic one,” Culver said. “We’re dealing with a severe recession, the likes of which we haven’t seen since the Great Depression.”

Next year’s budget, which is $6 billion, faces nearly $780 million gap between revenue and spending according to an estimate done by the nonpartisan Legislative Services Agency last month. The governor is expected to release his budget on Feb. 1.

Culver has already trimmed this year’s budget by $180 million — including $7.2 million cut from Iowa State.

He never directly addressed education — K-12 or higher education — other than stating his intention of keeping “Iowa a national leader in education.”

The governor’s bonding plan drew mixed reactions from both sides of the political aisle.

House Speaker Pat Murphy, D-Dubuque, said the proposal by Culver was bold and it will probably be difficult to pass but the party will try.

Sen. Herman Quirmbach, D-Story,  said Culver’s proposal is needed to weather the bad economic times.

“If we’re not going to use it in this kind of emergency, then why are we holding onto the tax payers dollars?” he said. “It’s there for purpose, it’s supposed to be used in times of crisis and this is a crisis.”

Quirmbach said taxes might be the only way to see public services continue.

“Nobody wants new taxes, but sometimes it’s the only way to see public services function,” he said. “For other areas, [lawmakers] will just have to be careful and watch how [they] spend money.”

Rep. Beth Wessel-Kroeschell, D-Story, said she doesn’t see tax increases completely out of the picture.

“I see something like the five-cent gas tax as a job creator more than a tax,” Wessel-Kroeschell said. “However, if the governor is not in favor of that tax, I am sure we will not support it at this time.”

Democrats hold the majority in both the house and senate by a solid margin. Republicans made it clear they are far less enthusiastic about the idea.

House Minority Leader Kraig Paulsen, R-Hiawatha, who wanted to see details of the bonding proposal before taking a position, worried that there may not be enough gambling money to cover the borrowing.

“I don’t know whether or not gaming revenue will actually support that borrowing,” Paulsen said.

Even if there’s enough money to repay the debt, Paulsen worried that borrowing isn’t a long-term solution.

“I’m just very leery of saddling our kids and grandkids with a $700 million debt,” said Senate Minority Leader Paul McKinley, R-Chariton.

Wessel-Kroeschell said she is concerned with making sure issues such as Medicaid and health insurance get attention just as much as prison guards and law enforcement — two things Culver told lawmakers shouldn’t be cut. She says there can be a lot of little cutting such as pay stubs and postage.

“It may not be much but it can add up,” she said.

To achieve the $700 million proposal, the governor asked the legislators:

To pass the $43 million Rebuild Iowa Bill, which would use some of the $620 million in the state’s cash reserves

To approve recommendations of the Rebuild Iowa Advisory Commission  made after last summer’s storms. Recommendations include improvements in flood plain mapping, land use planning, disaster insurance and first responders.

To create the $700 million initiative Rebuild Iowa Infrastructure Investment Bonds  to create jobs and address the state’s infrastructure needs.

How the Rebuild Iowa money would be used:

$20 million for property tax replacement: This would create a fund for communities to replace lost revenue and property taxes.

$10 million to Jumpstart Iowa Housing Assistance Program: This is money the state has appropriated to help cover the rebuilding that federal assistance doesn’t.

$5 million for nonprofit assistance: This money would fund forgivable loans to nonprofit and cultural groups affected by the floods.

$5 million for individual unmet needs: This money would work to ensure that individuals have maximized state and federal assistance.

$2 million for the Rebuild Iowa Office: This money would maintain the office that serves as a clearinghouse for the state’s flood recovery efforts.

$1 million for skills training: This money would be used for training programs, particularly to prepare construction workers for rebuilding.