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2021 Recap: New Laws & New Fiscal Year

Sunday, July 4, 2021

July 1 is a pretty big day in state government.  It is the start of a new fiscal year, the term we use for the start and end of a state budget year.  While many Iowans plan their budgets around a calendar year (January to December), state government plans its budget around a fiscal year (July 1 to June 30). The budgets passed by legislators in the 2021 session started on July 1.  Here are a few highlights of what's in this new fiscal year budget:

  • Home and community based services (HCBS) and habilitation providers will be paid more for the services they provide.  The Legislature gave Medicaid $18 million more this year to increase these provider rates.
  • Psychiatric Medical Institutions for Children (PMIC) will get a 28% boost in their reimbursement rates; an extra $3.9 million was given to Medicaid to help increase payment to these providers.
  • In May, there were 1,129 children on the waiting list for HCBS children's mental health waiver. Legislators added a little over $1 mililon to get services to more of these children (and reduce - or eliminate - the waiting list).
  • Home health providers also get a bump in reimbursement - $2 million fo new money will increase their rates.
  • While psychiatrists are in high demand in urban areas, they are really tough to find in rural Iowa. Legislators added $200,000 to this year's budget to add two more rural psychiatrist residencies in rural Iowa (six total).
  • Vocational rehabilitation, which helps people with disabilities overcome barriers to employment, will be able to access more federal funds with the additional $300,000 it receives this year.
  • Area Education Associations (AEAs) got an extra $2.6 million to improve access to school-based mental health services ($1 million) and address classroom behavior issues with therapeutic classrooms ($1.6 million).
  • Iowa made a big investment to make sure the entire state has access to high speed (broadband) Internet services.  The Legislature put up $100 million to start the expansion, and the Governor kicked in another $50 million in federal COVID recovery funds.  The total bill for this is around $500 million, so there will need to be more spending in this area over the next few years.
  • The courts got $700,000 to make sure ASL interpretation is available to people who find themselves in court.
  • The state's regional mental health and disabiity services (MH/DS) system is now on its way to being entirely state-funded.  Counties lower their property tax levies this year and that state is picking up $60 million (half) of the system costs beginning July 1.  Next July 1 (2022), the state will be paying for the entire system, with funds going out on a per person (called "per capita") basis.  
  • Iowa Medicaid will review administrative rules, state laws and federal policies to make sure pediatric health services provided to Medicaid-eligible children are consistent with the EPSDT (Early Periodic Screening Diagnosis Treatment) Program, including occupational therapy, physical therapy, speech-language pathology, and applied behavior analysis.  The report, which is due October 1, 2021, is to make recommendations to ensure this consistency. This item was updated on 7/7/2021; previously it stated that Medicaid would cover these services if delivered via telehealth).

July 1 also marks the day when most of Iowa's laws go into effect. In fact, 153 out of the 183 passsed this year went into effect on July 1.  Here's a quick look at a few of these new laws:

  • Iowans with disabiities can now move money currently in a Supplemental Needs Trust or Special Needs Trust to a more flexible ABLE savings account.  ABLE accounts are available through the State Treasurer and funds in them are protected from most estate recovery efforts.  You can learn more about these accounts at
  • Private insurance will now have to pay equally for mental health services delivered in person or by video (telehealth). Even though Internet capable of doing telehealth is not yet in all parts of Iowa, Senators refused to require insurers pay equally for services delivered over the telephone with no video (aka "audio only"). 
  • Schools and government agencies will have to be careful about what they say in diversity, equity and inclusion (DEI) trainings and history classes. They will have to steer clear of divisive topics like saying America is a racist or sexist country, or that America's institutions are biased against people of color.  Many legislators this year said they do not think "critical race theory" should be taught in classrooms (this is a theory that says that the idea of "race" was constructed to oppress and exploit non-White people).
  • Iowans no longer need a permit to buy or carry a gun, but licensed gun dealers still need to do a federal background check before selling one.  But background checks are not required for private sales (like gun shows).
  • Police officers now have qualified immunity (meaning they are protected from lawsuits that say they violated a person's rights). Protesters beware - there are now big penalties for "unlawful protests" where peaceful resistance turns to property damage (and some say peaceful protesters could get caught up in the arrests).  This so-called "Back the Blue" bill was controversial because it came right after the Black Lives Matter protests.
  • People who were sexually assaulted as children now have as much time as they need to ask for justice. Survivors of childhood sexual assault only had until they turned 28 to go to police about their abuse, after that the police could not file charges. That changed on July 1 with the removal of that window; criminal charges can be filed at any time there is enough evidence to convict a person.  Unfortunately, the civil statute of limitations is still in place (the time period that a person has to sue the person that abused them).
  • Failing to call 911 when a person is in danger is now a crime, and leaving the scene of a serious accident (where somee is injured) is now a felony.
  • Parents can now teach their kids to drive - they do not need to pay big bucks for a driver's education teacher to do it.  Before, only parents who home-schooled their kids could avoid the required class.
  • Parents needing child care got some help this year.  Working parents earning up to $90,000 annually now can use the child care tax credit on their state taxes (before you could only earn up to $45,000 annually).  Parents already getting state child care assistance will now be able to transition off the program as they start earning more money (before there was a hard cut-off once a person reached that income limit).  This also applies to parents receiving special education child care assistance, which allows for families earning between 225% - 275% of the federal poverty limit to gradually transition out of the program as they earn more money.
  • With many families struggling to work at home during the pandemic, unregistered home-based child care providers can now have six children in the home if at least one is school-aged (before the limit was five).  While this fixes an issue in-home childcare providers had during the pandemic, this change is permanent.
  • Charter schools that have state (not local) oversight are now allowed in Iowa, and those schools have the freedom to design classrooms in ways they think will be best for their students.  That means they may not have to do things required of public schools, which may be concerning to some families whose children have special needs.  
  • Iowans can now get alcohol delivered to their homes through third-party delivery services like Uber Eats, Grubhub, and DoorDash.  Iowans liked that they could get to-go drinks from restaurants during the pandemic, and it looks like legislators listened to them.
  • It's now a crime to use synthetic (fake) urine to pass a drug test.  You might get a fine - or the courts can send you to required substance use evaluation and treatment.

You can see all the bills we tracked for our readers this year here. It is very imporant to note that the bills that didn't make it through the process this year can still be worked on during the next legislative session that begins on January 10, 2022.  The session next year will last about 100 days, ending sometime in mid-April.  

Legislators will be returning to the State Capitol in August to approve new Congressional and legislative district maps using the population data they get from the 2020 Census.  This is done every 10 years, and Iowa's redistricting process is considered the best in the country. 


If you have questions about what happend this year, what didn't happen and why,
or just want some help figuring out how to get an issue you care about addressed next year, 

JOIN US for our next CAPITOL CHAT.  
Friday, July 9th | 11 AM 


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