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MH/DS BILLS MOVE OUT OF COMMITTEE

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The House and Senate Appropriations Committees have passed their bills to address the funding crisis in the state's regional mental health and disability services (MH/DS) system.  The current system of funding regional services ends next year, and two regions have a $10 million shortfall that if unfixed could cause thousands to lose services.  That's why lawmakers are serious about looking at the funding this year.  This is always difficult, because property taxes fund the system, and property taxes will have to increase in some areas to make up for state funding that was pulled two years ago.

Senate File 504 and House Study Bill 194 both equalize per-person ("per capita") levies within a region, so all counties will contribute to their region equally.  This is done by setting a new "per capita" regional rate. This works for many regions, but not for Eastern Iowa MH/DS region (Scott County) and the Polk County region.  Both require regions to spend down excess money in their reserve accounts.  Some regions didn't spend all of the money they collected from taxes, so they have built up large cash balances.  Iowa law currently says regions can maintain 25% ending fund balances, but many have far more than that (but also have plans to use it to roll out additional core services).  You can see a chart showing how each region fares under this plan here.  

While both plans require regions to spend excess reserves, they do it in different ways:

  • SF 504 allows regions to keep 25% in reserves for cash flow, and requires anything above that be spent down over three years, using 1/3 of the reserves each year.  
     
  • HSB 194 allows large regions (over 100,000 population) to keep 20% in reserves, and smaller regions (under 100,000 population) to keep 25% in reserves.  Regions would be allowed to spend down their reserves over a five-year period, in accordance with their regional management plan.  If reserves exist after that time, they would be forced to spend them down before being allowed to collect more taxes.

Both bills also take different approaches to fixing the $6.3 million shortfall in Polk County:

  • SF 504 requires the county hospital (Broadlawns) to give Polk County a total of $13 million in cash and inkind services to fill the shortfall over the next three years, while the Polk County levy increases to $47.28 in that same tme period.  Broadlawns has its own levy and its own board, but also provides $3.5 million of services already to the county (they assumed those costs this year to help Polk County get through its funding crisis).  You can see information about the Polk County fix here.
     
  • HSB 194 requires Broadlawns to give Polk County $6.3 million a year for the next three years in inkind services and cash to pay for services, but their levy rate is locked in at the current $31.40 per capita rate.  That's $18.9 million total from Broadlawns, with no plan for funding after three years.

There is currently no fix for Scott County, which is projecting a $3 million shortfall, in either bill.  However, Scott County does have money in reserves that can help them through one more year, but that leaves them with nothing at the start of the second year.  Legislators say they are working on that.  An interim committee will be tasked with looking at a longer term solution, SF 504 holds that interim during the summer of 2020 and HSB 194 moves it up to the summer of 2018.  

So if you were looking for a fix to MH/DS regional funding this year, the best you will get is a patch.  

SF 504 is currently on the Senate Calendar, ready for debate. HSB 194 will get a new HF number on Monday and be placed on the House Calendar, where it will also be ready for debate.  Both sides will try to come to an agreement before they move their bills - but calls now can help if you prefer one option over the other.  You can do that using our Grassroots Action Center here.