Credit Crunch Will Delay Iowa Bond Sale

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By Becky Ogann

Story Created: Oct 3, 2008 at 12:15 PM CST

Story Updated: Oct 3, 2008 at 12:15 PM CST

DES MOINES (AP) - The state is delaying plans to issue bonds to pay for $185 million in prison construction and other projects because of the nation's credit crunch.

Treasurer Michael Fitzgerald says plans are on hold to issue the bonds to finance renovations at the Iowa Veterans Home in Marshalltown, improvements at prisons in Mitchelville and Rockwell City and a new office building near the Capitol.

Fitzgerald blamed a tight credit market that has made all kinds of borrowing difficult, even for governments that almost never default.

He says it unclear when the state can move ahead with the bond issue. Officials planned to repay the bonds with proceeds from a settlement with the tobacco industry.

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