IPA Logo

State Capitol Report

April 24, 2023

This Week's Highlights

  • The House and Senate have agreed on joint budget targets.
  • Now budget subcommittees must agree on how to spend the money
  • Senate does not want to raise Medicaid mental health rates; the House does.
  • Legislators are still trying to limit property taxes, and each have a bill.
  • This is the last week legislators get staff and expenses paid.
  • It doesn't look like session will end this week, but maybe next week?

Budget Deal, Session Likely to Continue

Today marks the start of what is supposed to be the final week of the Iowa Legislative Session.  Friday is the 110th day, the day legislators lose their staff and travel expenses.  As we have said before, the Legislature almost always goes past their scheduled end date.  It just takes a lot of time to pass those final budgets and cut the final deals on other priorities.  


There are some promising signs that the end is near.  On Friday, House and Senate leaders agreed on how much they will spend on each area of the budget.  Budget subcommittee chairs will still have to work on their individual budgets, so that will take some time.  You can see the budget agreement below, and how it compares to the current year below.

The final agreement is $30 million above Governor’s level, but $62.5 million below what the House wanted to spend.   That jeopardizes the House’s plan to increase Medicaid rates for mental health therapy and substance use disorder treatment by $10 million.  If the Legislature were to move all behavioral health rates up to 100% benchmarked level to bring Iowa on par with other state rates, it would take almost $21 million to do it.

FY2024BudgetTargets1.jpg

The final agreement is $30 million above Governor’s level, but $62.5 million below what the House wanted to spend.   That jeopardizes the House’s plan to increase Medicaid rates for mental health and substance use disorder treatment by $10 million.  


Another big issue that will need to be decided before the Legislature completes its work for the year is property tax relief.  Legislators want to help Iowans who are seeing big increases in the value of their homes, and thus the amount of property taxes they will pay.  That has motivated legislators to do something to stop taxes from going up too much in one year, but they disagree on how to make that happen. The House and Senate each passed their own version of property tax relief, but the bills passed each other as they went to the other chamber (ships passing in the night). That means they have to go through the committee process in the other chamber before they can be debated, so time may run out before they can reach agreement.   You can see the differences between property tax proposals below:

House Property Tax Bill

(HF 718)


You can review the non-partisan Legislative Service Agency’s (LSA) Fiscal Analysis of HF 718 here. Briefly, the bill would do the following: 

 

  • Reduce property taxes statewide by about $200 million by decreasing the school foundation levy ($5.40/1000) by one dollar; this gap to schools would be covered by the State. 


  • Cap property tax increases for individual homes and farms at 3% per year and businesses at 8% per year. Growth attributable to urban renewal area (URA), previously abated property, "net new" or improved property not included in above-described growth cap.


  • Require property tax collecting entities to mail each property owner annual notices, which includes the entity’s prior taxes levied, prior effective tax rate, proposed taxes levied, proposed tax rate, a reason for an increase of taxes if there is one, and several other details.


  • Require all bond referendums to take place on the general election date in even-numbered years. If you had a county project, city project and school project that required bonding, they would all have to appear on the same ballot.

Senate Property Tax Bill

(SF 569)


There is currently no fiscal note for this bill, but the Iowa League of Cities put together a tool here. SF 569 would do the following: 

 

  • Provides for a taxable valuation growth limitation and automatic levy rate adjustment. For counties at or below the $3.50 per $1,000 limit for the General Basic fund, taxable valuation growth over 102.5% would trigger a calculation of current year taxes certified divided by 102.5% of assessed value to get effective tax rate. For counties over the $3.50 limit the threshold would be 103.25% of taxable valuation. The same would apply to the $3.95 per $1,000 limit for the Rural Basic Fund. 


  • Eliminates about 15 city levies – the local library levy, civic center levy, and many others – and leaves cities with five levies. The general levy (often called the $8.10 levy) would be replaced with one larger levy that would be capped and allowed an annual percentage increase of up to 2.5%.


  • Increases by roughly 30% the allowable bonding thresholds for cities and counties, and applies a cost of living increase thereafter. These bonding thresholds have not been increased in many years.


  • Eliminates the voter-approved public education and recreational tax levy (current maximum 13.5 cents) and the brucellosis and tuberculosis eradication levy (current maximum 33.75 cents). 


  • Allows Lee County to make a local county decision with regard to its county seat and which county court buildings they must maintain.


  • Establishes a new homestead property tax credit specifically for Iowans 65 years of age and older. The credit would be in addition to the existing homestead credit and would be $3250 in the first year and $6500 in each successive year.


  • Increases the military service property tax exemption to $4000 and removes the State’s responsibility for funding the exemption. 


  • Disallows commercial property in a new urban revitalization area from receiving a tax exemption unless the local government and the owner of the qualified real estate enter into a written assessment agreement specifying a minimum actual value until a specified termination date for the duration of the exemption period. The bill would not allow residential properties in new urban revitalization areas to receive an exemption from school property taxes.


  • Allows cities over 200,000 to impose an additional 2.5% franchise fee (above the generally capped 5%) for public transit as long as those revenues are used to provide property tax relief.


  • Requires each county auditor to make an annual report to the Department of Management of the valuation by class of property for each taxing district in the county, which is to be used for determining the levy rates necessary to fund the budgets of the taxing districts for the following fiscal year. In addition, the county auditor is required to make an annual report to the governing body of each taxing district in the county of the assessed valuations of taxable property in the taxing district as reported to the department of management.


  • Moves the budget certification deadline for cities and counties to April 15 (from March 31). This division also requires cities, counties and school districts to supply information that can help county auditors put together taxpayer information. Contains additional requirements including public budget hearings.


  • Allows counties to charge a $10 convenience fee for issuing driver’s licenses or non-operators identification cards to non-residents of the county.


  • Increases from $1.25 to $2.00 the writing fee assessed by county recorders for transactions involving all-terrain vehicles, water vessels and snowmobiles.

Public Assistance Reform Awaits Governor’s Signature


Two weeks ago, the Iowa Senate passed the “public assistance reform” bill (SF 494).  It is often called the “SNAP Bill” because it requires new household asset tests for the Supplemental Nutrition Assistance Program, or SNAP.  An entire family must have less than $15,000 in assets (excluding the value of a person’s home, retirement savings, first car, and part of the value of a second car).  It doesn't matter if there are ten members of the household or two, the asset level is the same.


It also requires Iowa Medicaid to run new database checks on people covered by Medicaid and the children's health insurance program, to make sure they are not hiding assets or are otherwise ineligible. Legislators believe that 2,800 people will lose their food assistance (SNAP) and another 8,000 will lose their Medicaid benefits because of this new law.  You can read more about the estimated costs and savings here.


If you are concerned about this, you can send a message to the Governor here, but this appears to be a national trend with the US House set to pass work requirements and additional red tape for Medicaid on a national level.

Other Bills to Watch

In the past week, the Legislature has sent three mental health bills supported by IPA to the Governor:

  • IPA's psychologist prescribing update (HF 183)
  • Ban on non-compete agreements with mental health professionals (HF 93)
  • Professional counselor compact (HF 671)


While the professional counselor compact applies to only licensed mental health counselors and licensed marriage and family therapists, IPA supported as a good example of what compacts should be (versus PsyPACT). Other bills still in the wings:


  • MH/DS Regions:  The Iowa Senate has not scheduled debate on HF 471, which gives individuals with disabilities and providers more of a say on the boards of the mental health and disability services (MH/DS) regions.  The bill also adds a new core service – community-based outpatient competency restoration, which creates an alternative to sending individuals to the state’s mental health institutes.  We know from our IPA experts that this bill needs to be amended eventually to make it more workable, but there is general opposition to changes right now.


  • Disruptive Student Removal: The fate of HF 604 is now in the hands of the Iowa Senate.  This bill originally allowed teachers to remove “disruptive students” from a classroom, and required students removed three times in a semester to be expelled from school.  The bill was amended and now creates a process for removing a student from a classroom that includes mandatory counseling and placement in an alternative learning environment (like a therapeutic classroom).  For students who have a behavior intervention plan or individualized education plan (IEP), the school is required to call a meeting to discuss potential changes to the IEP or behavior plan to address the disruptive behaviors.


Our next report is scheduled to come out in two weeks, which we hope will be very close to the end. If it looks like they will adjourn close to our next reporting date, we may delay publication. In the mean time, keep an eye out for timely alerts requesting you to take action and watch the Bill Tracker for updates to the bills you are watching closely.

Your Bill Tracker

Click above to see status of important bills, or create your own report with our custom download.

Town Halls & Public Forums

Find a local event with your state or federal elected officials here. Three weeks are shown at a time on this website.

Your Legislative Team:

Amy Campbell | amy@ialobby.com | 515.554.5838

Craig Patterson | craig@ialobby.com | 515.554.7920

The Advocacy Cooperative | www.ialobby.com

Your Advocacy Toolkit:

Watch or Listen to Debate (recorded or live)

Check Schedules

Daily Senate & House Schedules (with Zoom/Webex links)

Legislative Committee Listings

Find & Contact Your Legislator

Advocacy Toolkit

2023-2024 Guide to the Iowa Legislature


Click here to view this update as a webpage.