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House Journal: Page 2208: Tuesday, May 2, 1995

Senate File 69 represents landmark legislation for the first
session of the Seventy-Sixth General Assembly. The bill contains
nearly $100 million in tax reductions for Iowa families and
businesses in fiscal year 1996, growing to $172 million in
fiscal year 2001.
With the repeal of property taxes on new machinery and
equipment, this bill will have an immediate impact on Iowa's
ability to attract and keep high paying jobs. This impact will
grow in the future, as all property taxes on existing equipment
are gradually eliminated. County taxpayers will also receive
property tax relief through the mental health provisions, where
50 percent of mental health financing is shifted to the State
and a process for cost containment is begun.  Finally, families
and retirees will see their Iowa income tax bills go down as a
result of increasing the dependent credit from $15 to $40, and
allowing the exclusion from taxable income of $3,000 of pension
income ($6,000 for married filers).
I believe that Senate File 69 is an excellent first step towards
the goals of increasing jobs, personal income and population
growth.  I expect additional action to be taken during the next
legislative session to reduce income tax rates and treating
small businesses the same as other corporations under the
single-factor corporate income tax. These changes are critical
to attaining our goals.
Senate File 69 is, therefore, approved on this date with the
following exceptions which I hereby disapprove.
I am unable to approve the designated portion of Section 15,
identified as the third sentence of Section 331.439, subsection
3a, and Section 331.439, subsections 3b and 3c, in their
entirety. These items require counties to receive an inflation
factor for mental health beginning in fiscal year 1997, and
spell out specific factors and procedures relating to its
determination.   These items fail to allow for savings from
managed care, and could significantly dilute the property tax
relief. Moreover, the portion of Section 15, identified as
Section 331.439, subsection 3b, contains a provision that
intrudes upon my executive budgeting responsibilities.  The
concept of an inflation factor may be appropriate to reconsider
at a later date, after adequate cost containment has been
achieved through the rule-making process.
I am unable to approve the designated portion of section 15,
identified as Section 331.439, subsection 5, in its entirety.
This item limits counties' obligations for payment of mental
health, mental retardation and developmental disabilities
services. I support the concept of limiting counties'
obligations, except in those instances where a county elects to
become its own managed care provider. The assumption of
financial risk is one of the defining characteristics of managed
care. If a county chooses to become its own managed care
provider, it should also assume the financial risk. I will
approve language that is subsequently enacted as long as it
contains this exclusion.
I am unable to approve the designated portion of Section 18,
identified as Section 426B.2., second unnumbered and unlettered
paragraph, in its entirety.  This item will hinder future
efforts to change the allocation formula.
For the above reasons, I hereby respectfully disapprove these
items in accordance with Amendment IV of the Amendments of 1968
to the Constitution of the State of Iowa.  All other items in
Senate File 69 are hereby approved as of this date.
	Sincerely,
	Terry E. Branstad
	Governor

Iowa General Assembly

Index: House Journal (76th General Assembly: Session 1)

© 1995 Cornell College and League of Women Voters of Iowa

Comments? hjourn@legis.iowa.gov.

Last update: Sun Jan 14 21:05:02 CST 1996
URL: /DOCS/GA/76GA/Session.1/HJournal/02200/02208.html
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