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Senate Journal: Page 1226: Monday, April 22, 2002

In its present form there is some question as to whether Sections 1-8 would
jeopardize Iowa having a qualified model statute within the meaning of the Master
Settlement Agreement. That in itself would result in substantial monetary penalties
for the State.

Senate File 2317 is, therefore, signed on this date with the following exceptions,
which I hereby disapprove.

I am unable to approve Sections 1-8 given the potential to put Iowa in
noncompliance with the Master Settlement Agreement. I look forward to working with
lawmakers to approve legislation that would ensure compliance with the Master
Settlement Agreement and not jeopardize these funds.

For the above reasons, I 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 2317 are hereby approved as of this date.


May 10, 2002

The Honorable Chester Culver
Secretary of State
State Capitol

Dear Secretary Culver:

I hereby transmit Senate File 2326, an Act making, reducing, and transferring
appropriations, and providing for other properly related matters and including effective

Since the Legislature approved this bill, there has been a dramatic change in the
State’s revenue projections. Most states and the federal government experienced a
large reduction in final pay income tax returns and a correspondingly large increase in
taxpayers due refunds. Because of this change in circumstance, I asked the State’s
Revenue Estimating Conference (REC) to meet to review their official revenue estimate
for both fiscal years 2002 and 2003.

On May 7, the REC met and decreased general fund resources available to the
State by $205.5 million in fiscal year 2002 and $220.1 million in fiscal year 2003. By
law, both the governor and the legislature must rely on the REC estimate in preparing
and approving the state budget.

While I am concerned about many details within this bill, there is a larger, more
fundamental concern that prevents me from approving the majority of this bill. Due to
recent action by the REC in lowering revenue projections, signing this bill would enact
a general fund budget for fiscal year 2003 that results in a general fund deficit of more
than $200 million and would be an irresponsible action. I cannot and will not do so.

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