Vilsack 6 9 letter Reinvent GovTHOMAS J. VII-SaCK
GOVERNOR
OFFICE OF THE GOVERNOR
SaLLYJ. PEDERSON
LT. GOVERNOR
Michael C. Van Milligen
City Manager
City of Dubuque
50 West 13th Street
Dubuque, Iowa 52001-4864
June 9, 2003
Dear Michael:
As a follow-up to the letter dated April 30, 2003, that I sent to all mayors and County
supervisors explaining the need for the Reinventing Government Bill, I am writing to let you
know what we are doing at the federal level to help local government. Please contact your
mayor or supervisor for a copy of that letter. On May 13, I talked with representatives and the
board members of your state associations about the reasons for this bill and measures being taken
by Congress to provide funding to state and local governments.
First, I would like to correct an error in the previous letter. The Innovation Loan Fund
was proposed to tap seed money for investments in technology, not biotechnology.
Second, individually and as a member of the National Governors Association, I have
urged Iowa's U.S. Senator Charles Grassley, as Chairman of the Senate Finance Committee, to
include fiscal relief for state and local government in the federal tax reconciliation bill, S. 1054,
pending before Congress. As a former mayor, I believe the federal government must provide
greater fiscal relief to state and local governments for homeland security, Medicaid, and other
areas.
Senator Grassley has successfully included a $20 billion fund to help budget-strapped
state and local governments in S. 1054, as approved by the Senate with a strong b/partisan vote.
It would provide $10 billion for Medicaid reimbursement increases and $10 billion for flexible
block grants to state and local governments. About $6 billion of the flexible assistance grants
would be allocated to states and $4 billion would be allocated directly to local govca-nments.
Iowa's total share under this Senate bill would be about $180 million.
This federal relief would cover part of the loss of funds for local governments in Iowa's
FY 2004 budget as a result of the economic downturn: I caution that the bill still has to be
approved by a joint House-Senate conference committee, where changes will most likely occur
because the House bill does not have similar relief for state and local governments.
I am attaching a press release by the National Governors Association and a very
preliminary analysis of how such funds would be distributed among the states.
STATE CAPITOL
DES MOINES, IOWA 50319
515 281-5211
FAX 515-281-6611
Finally, I want to reiterate that the Public Strategies Group (PSG) is available, either
directly or through the Iowa State Association of Counties and the Iowa League of Cities, to
assist you with process improvements. PSG is an experienced and creative consultant that has
ideas to help you develop and implement strategies for improving services in a period of
declining revenues. I strongly encourage you to contact PSG by calling Babak Armajani at 515-
242-5261, babak@psgrp.com.
Thank you again sharing your concerns with me about this issue.
Sincerely,
Thomas J. Vilsack
Governor