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April 6, 2021
2021 Legislative News
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The Iowa Legislature is now in its final month of session; at least the final paid month. Legislators receive expense checks to help offset their costs of moving to Des Moines during the 110 days of the legislative session; those checks end on April 30. While legislators can and do go longer, this year they are working hard to finish up before that deadline hits.
They have a lot of work ahead for the next four weeks, including passing the eleven bills that make up the state budget and finishing work on the Governor's bills that expand high-speed "broadband" Internet and increase access to childcare. Legisators have their own priorities as well, including some major tax reforms and expanded "school choice" options that allow for easier open enrollment and charter schools.
A lot of bills DIED in this final funnel, including:
- Telehealth payment parity.
- Emergency 30-day prescription refills without prescriber approval.
- Caps on insulin cost sharing ($100/month).
- Efforts by credit unions to incentivize savings (drawings to win matched deposits).
- Physician assistant code updates.
- Changes to who can apply dental sealants.
- Reasonable limits on Medicaid recoupments.
- Access to birth control without a prescription (for up to one year).
- Public assistance oversight with new asset tests and more frequent eligibility checks.
- Access Center commitments.
- Ending tenure at state universities.
- Penalties for cities and counties that defund the police.
- Stopping employers from requiring COVID-19 vaccinations.
- All other bills weakening Iowa vaccine laws.
- Allowing college athlete to earn money through sponsorships and use of their name.
- Taxpayer-funded scholarships for private schools (aka school vouchers).
- Added protections for mobile home residents.
- Punishing companies like Facebook/Twitter for restricting what people can say online.
There are still plenty of bills that SURVIVED this last deadline including:
- Audio-only telehealth directives to state licensing boards.
- Social worker supervision changes.
- Allowing dentists to give COVID-19 vaccines.
- Expanding access to the DMU Health Professional Recruitment Program.
- Governor’s bills to expand affordable housing and access to broadband.
- Requiring at least 75% of UI dental and medical school students to be Iowans or students who received undergraduate degree from an Iowa college.
- Requiring schools/universities to do first amendment training for students & faculty, while simultaneously stopping public schools from teaching "divisive concepts" such as racism and sexism.
- Reviewing all boards that license professionals (with automatic sunset).
- Keeping communications between a peer counselor and law enforcement confidential.
- Music therapist "title protection" & occupational therapist compact.
- Medical tort reform (caps on non-economic damages).
- Taxation and regulation of glass/metal pipes used for drugs (marketed for tobacco) to fund specialty courts (including mental health, family, drug courts).
- Another round of reviews of the inpatient psychiatric bed tracking system.
- Allowing only county elected officials on regional MH/DS boards to vote on budgets.
- Allowing charter schools (determined by Board of Education, not local school boards).
- Constitutional amendment stating Iowans do not have the right to an abortion.
- Bottle bill changes to allow grocery stores to stop taking cans.
- Reductions in unemployment benefits.
- Allowing cities to use revitalization incentives in historically red-lined areas.
- Half of the Governor's eight child care bills.
- Stating fundamental parental rights (strict scrutiny standard for state infringement).
Remember that “dead” bills can still be turned into amendments and attached to other bills that are still alive and moving. Things will appear slow in the next few weeks, activity will be in spurts and move very quickly. So watch for alerts and bookmark the Iowa PCA Bill Tracker, as updates will be done twice daily.
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Budget Update
There is only one thing the Legislature must do each year, pass a budget for the upcoming fiscal year (FY 2022 for this session) and that is going to be a heavy lift this year. The Revenue Estimating Conference, as mentioned in our last report, settled on a growth rate of 1.9% for FY 2021 and predicted solid growth for the next two years (3.5-4.5%).
On March 24th, the Senate Republicans announced their budget targets for the FY 2022 budget, spending $7.999 billion, an increase of $195 million over FY 2021. The budget spends 94% of available revenue and allows for the elimination of the tax triggers (the 2018 tax bill required state revenues to grow by 4% in order for income tax changes to take effect, including the elimination of federal deductibility, reduction in the number of tax brackets, and generally reducing income taxes for most Iowans). By comparison, the Governor's recommended budget spent just under $8.2 billion (about 97% of what is allowed).
The House has not released their targets, but we have heard they do have the numbers completed. They have said they intend to start moving budget bills this week. We anticipate the Senate will do so the same. In fact, they have already scheduled the first budget bill subcommittees for Monday and Tuesday (Administration/Regulation, Agriculture/Natural Resources, Justice Systems, Judicial Branch, and Transportation. The biennial Federal Block Grant Bill has also made an appearance (no changes to CMHC block grant).
In addition to the budgets above, we're waiting to see Economic Development, Education, Health/Human Services, Infrastructure (also called RIIF, for Rebuild Iowa Infrastructure Fund), and Standings. Normally the House and Senate switch off on who starts the bill, but right now it looks like the Senate plans to roll out all of their own budget bills this year, so the House may follow suit. That's a lot of back and forth for just four weeks, so we'll see.
REMINDER: Our requests are $1.3 million for two sites under a re-established Rural Health Center Incubator Grant Program in the Health/Human Services Budget, and as much money as they can give us for a Health Center infrastructure program funded in the Infrastructure (RIIF) Budget.
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Massive Senate Tax Plan Buys Out MH/DS Regional System
Leaders in the Iowa Senate rolled out a massive tax reform bill that takes $152 million from cities and counties (the "backfill" from commercial property tax cuts made several years ago), ends tax credits for those that donate their land to conservation, and limits who can set aside their land for forestry reserves. The biggest part of this bill (Senate File 587) no longer allows property tax dollars to be used to support the state's regional Mental Health and Disability Services system, and instead uses all state funds to pay for the system.
Many groups are registered in opposition to this bill, while others have stayed "undecided" as they work through the details. Those in favor include Farm Bureau, Americans for Prosperity, Iowans for Tax Relief and Iowa Taxpayer's Association. Many advocates see good and bad in the bill, so lets walk through the details:
Beginning July 1, 2021 (called Fiscal Year 2022):
- Regions would need to put all their money into one bank account ("pool" it).
- Regions would lower levies to $21.15 per person (also called "per capita").
- State would kick in $15.86 per person (for a total of $37 per capita in each region).
- Regions would have to pay back the amount they receive after two quarters if they are over 40% fund balance (returns go into newly created risk pool).
- No other county tax dollars could be used to pay for services or staff.
- State would pay its share in four even amounts (quarterly payments to regions).
- Funds a risk pool for regions that need additional funds ($9,960,590 plus amount returned after first two quarters).
- Risk pool applications due October 31, decision made on December 15, funds to region on January 1.
- Lists out what risk pool funds can be used for (mandated services, "critical services," avoiding cuts to mobile crisis, avoiding elimination of entire groups of people from services, and assistance in to "maintain consumers in a community setting."
- Regions are given authority to redo their levies since they are already in the process of recertifying them.
Beginning July 1, 2022 (called Fiscal Year 2023):
- County MH/DS property tax levy eliminated.
- State provides regions with $38 per capita ($1 increase from FY2022).
- Funds risk pool with $5,170,340 (decrease of $4.8 million).
- Requires regions to be below 20% fund balance to avoid repaying first two quarter payments to the state (amount repaid/withheld goes into risk pool).
Beginning July 1, 2023 (called Fiscal Year 2024):
- State provides regions with $40 per capita ($2 increase from FY 2023).
- Risk pool appropriation based on formula: total amount in risk pool X growth factor but is capped at 3.5% (risk pool growth factor is the % increase in income tax from FY21 to FY22 minus 1.5%, up to 3.5%; so if the sales tax increases from FY21 to FY22 by 2%, the growth factor would .5%....that is, .5% x the risk pool balance, which could be quite small).
- Requires regions above 0% fund balance (or they must repay or have last two quarters withheld for amount above - which goes to risk pool).
Beginning July 1, 2024 (Fiscal Year 2025):
- State provides regions with $42 per capita ($2 increase from FY 2024).
- Risk pool appropriation based on formula from above but the sales tax collection years based on % increase in sales tax between FY 2022 and FY 2023.
- Requires regions above 0% fund balance (amount over that refunded/withheld and put in risk pool).
Beginning July 1, 2025 & beyond (Fiscal Year 2026 & beyond):
- State funding is the prior year's per capita amount X regional growth factor (uses same calculation as risk pool growth factor, but caps annual increases at 1.5%).
- For FY 2026 that means $42 X growth factor up to 1.5% (% increase in sales taxes from FY23 to FY24, minus 1.5%).
- Risk pool appropriation based on formula from above but the sales tax collection years change to FY23-FY24 increase, with dates updated each year after.
- Requires regions above 0% fund balance (withhold/repayment goes to risk pool).
Because this is hard to explain in words, we have a few pictures to show how the funds should flow:
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There is no change to regional administration of the funds; regional MH/DS boards would continue to provide oversight and approve plans and budgets. There are a few things that were brought up in subcommittee:
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Where is the DS? When legislators talk about the regional system, they continue to refer to it as "mental health regions." Legislators are starting to forget the DISABILITY SERVICES side of MH/DS regions and the importance of those non-Medicaid services to those with intellectual and developmental disabilities. Some advocates fear that any limitation in funding would not only pit the adult and children's mental health system against each other, but also the disability side against the mental health side. This is not specific to this bill; it's been happening under the current system as well, but the question remains if a state-funded system will help or further fracture.
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Ramps up funding over time and includes a growth factor. However, the growth factor is connected to sales tax growth, so if the economy goes down, the state's funding for mental health does as well (even though demand for mental health services goes up during times of economic uncertainty). In addition, the growth factor is based on two-year old data to improve predictability (but that's a big lag for a service system).
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Allows for funds to be allocated where they are needed, not where the property tax dollars can be generated. One of the problems with the old freeze on property taxes is that it froze the amount a county could collect, so counties are allowed to collect the same amount from property taxes this year (Fiscal Year 2021) as they did when the state started partnering with counties in FY 1998. Since that time there have been two censuses and population has shifted. Iowa's urban counties have grown significantly since that time: Story County added 25,000 residents, Linn County and Johnson County combined serve 100,000 additional residents, and Polk County increased its population by 140,000. Some regions have more than enough money from property taxes, and could even tax more, but the state cannot take those funds and give them to other areas of the state in need. With an entirely state-funded system, the state could do this. Unfortunately, the way its structured there will continue to be a few regions that will be risk pool dependent each year to fund their service array (so it doesn't fully fix the problem).
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There are several operational issues with the structure of the new system. First, no region can operate on zero fund balance. Regions need some money in the bank to pay providers, or provider payments will be delayed or service authorizations slowed. Second, most (if not all) regional staff are county employees or the county pays their salaries. Without a levy and with the prohibition on any other funds being used to pay for those salaries, this would cut into service dollars. Third, a non-elected person is the new administrator of the funds (no longer county auditor, now regional administrator). Other issues include uncertainty in risk pool dependent areas, lack of definition in the risk pool criteria, absence of a children's provider representative on the risk pool board, fast implementation date (starts less than two months if bill passes and is signed), and prohibits some sharing of other county resources to accomplish regional goals.
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The state has not been a reliable partner. This is not an opinion; it's fact. The state has rarely lived up to its promises in funding their part of the MH/DS regional system and regions have relied on local property tax dollars to fill in those gaps. Local funding means local input into the process, and a degree of responsiveness that you do not see in other state funded systems. That of course has not always been the case, as some regions have had administrators who are not as collaborative as others. Without some reliable locally-controlled funding source, regions are entirely dependent on the Governor, DHS and the 150 state legislators to fund the system. Instead of going to your local county supervisors for help, you will need to go to your two legislators and DHS to make your case. That all said, the Senators writing this bill fully intend to retain local control, but that may or may not be possible without local dollars in the system and the way the bill is currently structured.
We will continue to keep you posted on this bill. It's big, maybe too big for the final four weeks in session, but its not going away. It is scheduled for debate in the Iowa Senate today (April 6). If it does not pass this year, legislators will be working on a new plan for next year, when even more tax changes are expected.
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Iowa PCA Bills of Interest
Telehealth & Medicaid Managed Care: As predicted, HF 294 failed the funnel. Senate leaders believe the "offer" that Wellmark has on the table is the answer, not legislation. Wednesday, March 31 was the eve of the 5th Anniversary of Medicaid managed care. There was a passionate (but not heated) exchange between Senators Janet Petersen (D-Des Moines), Jeff Edler (R-State Center), and Liz Mathis (D-Marion) that started out being about the legacy of Medicaid managed care but ended with a discussion about telehealth. it's not long - and it's worth a listen. You can watch or listen to the exchange here (but you will want to fast forward to time stamp 9:12:30 or you'll spend the first 15 minutes listening to the prayer, pledge of allegiance, and congratulations to a Senator retiring from military service.
Professional Licensing Reform Part II: Last year's legislation to weaken Iowa's professional licensing laws were not enough for legislators; SF 487 survived, but we still have not seen the House committee amendment that makes "major changes" to the bill. When we do, we will drop a description into the Bill Tracker. As a reminder, this bill requires a review of all licensing boards with an automatic sunset (requiring legislators to act on the recommendations of the review if a board and affiliated licenses are to continue).
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Your Bill Tracker
Click above to see status of important bills, or create your own report with our custom download.
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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.
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Your Legislative Team:
Your Advocacy Toolkit:
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