State Capitol Report

March 25, 2023

Friday is the Final Funnel

Legislators will return to the Capitol on Monday to begin week 12 - funnel week. Leading up to this week, there were not many subcommittee and committee meetings, so legislators will have to pick up the pace this week or let a lot of bills die in committee.

As you can see from the chart above, bills need to have progressed pretty far along in the legislative process to stay alive for this final month of session. Here's a quick review of where we're at:

• The government reorganization bill (SF 514) has been sent to the Governor. Legislators made no significant changes to her proposed restructuring. When budgets come out in the coming weeks, they will be aligned with this new structure.

• The Governor signed the ban on gender-affirming medication and surgeries for minors (SF 538) and school bathroom bill (SF 538). While minors already receiving treatment have 180 days to plan for the transition, the bathroom bill took effect immediately. Schools informed transgender students the next day they could no longer use bathrooms aligned with their gender identity.

• The Senate redoubled its "parents rights in education" (aka "don't say gay") effort this week to get rid of books in school libraries that describe sex acts, stop all discussion of gender identification and sexual orientation in elementary schools, ends education around HIV and HPV (and HPV vaccines), and require any school employee that suspects a child is transgender to "out" them to parents. They passed SF 496 last week; it's now in the House Education Committee. You can read the fiscal analysis of the bill here, and an excellent, detailed review by Senate staffers here. IPA is registered opposed to this dangerous bill. If you want to take action, target State Representatives and specifically the House Education Committee, which has been inclined to pass a bill like this.

• The subcommittee on Mental Health Non-Competes (HF 93) met last week and approved the bill as is, with no amendments. The Senate Health and Human Services Committee plans to pass the bill this week, so it should survive the funnel.

• The Senate is not planning to debate this week, but the bill updating Iowa's prescribing psychologist law (HF 183/SF 133) has already made it through the funnel.

• Two weeks ago the House passed HF 610, which requires schools to excuse a student who misses school to get treatment for autism.  In Iowa, a student can become a “truant” if they miss too much school without a reasonable excuse.   Some schools have decided that autism treatment is not a reasonable excuse.  This means a student can quickly become truant.   The bill passed the House 97-0.   A Senate subcommittee approved the bill last week, but the education community opposes in masse so it may have trouble getting out of committee this week.

• The Senate passed SF 506 last week, which carves out birthing centers and community mental health centers from the Certificate of Need process, and increases thresholds for it to apply to other health care expansions. The House has typically not wanted to end certificate of need, so its future in the House Health and Human Services Committee is up in the air (but again, this is something that may ver well end up being part of the end of session budget negotiations).

• The House has not said if it will debate this week, but if they do, they will probably not take up time-consuming issues like the anti-DEI bill (HF 616), which prohibits state universities from hiring diversity, equity, and inclusion staff or having any kind of DEI infrastructure, no matter how it is funded.

• The Senate passed it's version of Public Assistance Reform (Senate File 494), which requires household asset tests for Medicaid, the Children’s Health Insurance Program (called Hawk-I), the Supplemental Food Assistance Program (SNAP), or the Family Investment Program (FIP).  Right now there is no asset test for HAWK-I and the state already has a federally-approved asset test process for Medicaid. Any additional asset tests for Medicaid and HAWK-I would need federal approval. That's why people have been referring to this as the "SNAP" Bill. As approved, the bill would require the state to contract with a private company to hire more than 230 people to verify what each member of the household owns to make sure they do not have too many “assets” that would make them ineligible for one of these programs. They would add another 19 individuals to hear appeals, and invest more than $20 million to upgrade the state's information technology systems. If there is a discrepancy when they do these checks, a person has ten calendar days to prove they are still eligible for the program.  If they do not respond, they risk having their assistance stopped.  The state would spend more than $30 million before they (maybe) save $7 million in the fourth year. The Legislature estimates that 8,000 Iowans could lose their Medicaid coverage and 2,800 could lose their food assistance. You can see the fiscal note here.  This issue is bound to be around for the rest of session, as it will tie into budget discussions. The House version (HF 613) is worse, with work/community engagement requirements and limits on what SNAP families can use their funds to purchase.

You can read about more of the bills we're tracking in the IPA Bill Tracker.  

UP NEXT: Budgets

The only committees that will meet after this week are the Ways & Means Committee and Appropriations Committee, because they deal with the funnel-proof tax and budget bills. Tax cuts always factor into budget decisions, because they reduce revenues. This year, it's clear legislators want to cut property taxes for Iowans.  What is not so clear is how they will do it, and if they will replace those lost local revenues with state dollars. The decision they make there will have an impact on budgets.

The House and Senate took the first step in the budget process this week by setting their overall budget target.

·      The state’s current budget is $8.21 billion.

·      The Governor’s budget recommendation was $8.486 billion, which is a 3% increase.

·      The Senate set their budget target at the Governor’s level, $8.486 billion.

·      The House target is a little higher at $8.58 billion, which is a 4.5% increase.

·      The House said they want to use the additional money to rebase nursing homes.

The Legislature is allowed to spend 99% of the money the state collects, but they have set targets well below the $9.65 billion spending allowed.  They are only spending 88% of what they are allowed, the rest of the money, nearly $2 billion, is set aside for future tax cuts.  This is money that could also be used to increase Medicaid provider rates, eliminate Medicaid waiver waiting lists, or expand access to childcare.

Legislators are also likely to move forward on another bill (HF 525) that taxes the MCOs and through what is called an intergovernmental transfer, uses the funds to draw down additional federal match before returning the amount taxed to the MCOs as a part of their contract. It's a shell game, but it will raise between $60-100 million each year in additional funds for Medicaid. However, if the state chooses to use these additional dollars to increase provider rates, it can be matched again. If it uses the funds to fill the hole in Medicaid created by the pandemic enhanced match rate that is ending this year, it cannot be matched. So there is incentive for legislators to use these funds to increase rates, and Medicaid has told legislators that the two areas most in need of an increase are behavioral health rates and physician payments.