New Law Fosters Medical Savings Allows Tax Deduction For Money Set Aside

Gov. Phil Batt signed into law on Wednesday legislation creating Medical Savings Accounts for Idaho residents, allowing people a state tax deduction for money they put aside to meet medical bills.

The governor said it should ease one of the state’s top health problems, people who have no health insurance.

“Medical savings accounts may give the uninsured the tax incentive they need to buy health insurance, thus reducing the need for the state or other patients to pick up the bill,” he said.

Batt also signed a bill he said he doesn’t like, a $19 million appropriation for the state court system that gives the judiciary no raise next year. The governor said it was wrong for the Legislature to refuse raises to Idaho’s judges because they didn’t like a judge’s decision.

“The judges have not had a salary increase since 1993,” Batt said. “Salary decisions should be made on the relative requirements of the job and the demands of the marketplace, not based on the decisions of any single member of the judiciary.”

Later in the day, Batt signed with no comment a bill allowing industry to check for environmental violations, without being subject to penalties or fines for reporting them. The bill, sponsored by the Idaho Association of Commerce and Industry, was heavily amended in the House to meet Batt’s objections to the original version.

He said he will allow one bill to become law without his approval. It creates a seven-person committee to decide whether to build, buy or rent a governor’s residence.

Batt vetoed two other bills. One would have allowed a legislative committee to decide in private which state agencies to subject to performance evaluations. The other would have required write-ins to declare their intention 25 days before an election, two weeks earlier than current law.

The Medical Savings Account bill allows couples to put up to $4,000 yearly into a savings account to cover medical costs. A single person could deposit up to $2,000.

The money could be carried over from one year to the next.

The contribution would be a deduction from state taxes. At the top tax rate of 8.2 percent, a $4,000 deposit would cut state taxes $328.

Batt said the legislation did not contain a precise estimate of the cost.

“Because of this, I asked that the bill sunset (end) in 1998,” the governor said. “This will allow us to determine the fiscal impact of this measure and adjust the law accordingly.”

A bill passed at the request of Rep. Bruce Newcomb, R-Burley, and Sen. Bruce Sweeney, D-Lewiston, cochairmen of the Legislative Oversight Committee, made it clear that the committee could decide in private which state agencies to audit. The bill also allowed the audit agency to keep information private if there was litigation involved or the possibility of legal action.

“This bill impinges on the separation of the branches of government by allowing the legislative branch of government to audit the executive branch under a veil of secrecy,” Batt said in a veto message.

Batt said the Legislature’s bill to limit write-ins “amplifies a recent trend to limit the public choices of candidates for elective office.

“The write-in process is a time-honored bulwark of our electoral process, and should not be shackled to the point that it becomes meaningless,” the governor said.

Chief Deputy Secretary of State Ben Ysursa said the change was intended to make it easier for small taxing districts, which can cancel an election if only one candidate files for an office, to decide early if the election can be canceled.

But Batt said many write-in efforts aren’t launched until shortly before an election. “I believe the 11-day period is not a good provision,” he said. “The 25-day period would have a definite chilling effect.”

The governor also announced that he’s signing a bill removing the equivalent of state civil service protection from 56 jobs in state government, including the Division of Environmental Quality, public information officers and the Division of Financial Management.

The original bill allowed any worker employed before the July 1 effective date to remain covered by the state merit system. It was amended to eliminate the “grandfather” clause, but Batt said he would abide by the original version.

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