The tax bill promoted by Gov. Kim Reynolds and the legislature aims to change Iowa’s mental health system from the use of state-funded property taxes.
DES MOINES, Iowa: Iowa lawmakers are one step closer to changing the way the state provides funding for mental health programs and could help reduce property taxes by September 2022.
Gov. Kim Reynolds and the legislature negotiated the tax reform deal. He passed through the Iowa Senate on Monday 29 to 15 p.m. Reynolds’ office told Local 5 he would sign the bill once he arrived at his office, as he was part of the negotiations.
Iowa is the only state to fund its mental health system through property taxes. Senate file 619 will change that and advocates hope this will improve the state’s mental health care.
“Iowans have been denied adequate services and help for too long and I think what we’ve seen happen is that we’ve finally reached a turning point,” said Peggy Huppert, executive director of the Alliance. National Institute of Mental Illness (NAMI) of Iowa.
Currently, the state uses property taxes to fund mental health programs. This has been done for decades. According to NAMI, counties used them to pay for county-administered mental health facilities.
Advocates said this caused some equity issues with care, as some counties were able to have excellent mental health services while others struggled.
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In 2013, the state took a different approach in creating 14 mental health regions in the state, creating the current system. Property taxes are used to pay for mental health services in each region.
While it’s better than the county approach, many say it’s still not fair.
“I often say that if you set out to design a more dysfunctional system to deliver human services, it would be difficult to come up with something,” Huppert said.
In short, the new plan would shift mental health costs to the state. Republicans say this would not only reduce property taxes for Iowans, but also provide better mental health services.
A fiscal note from the legislature says SF619 would eliminate property tax in a two-year period.
Some believe mental health services may not improve, but Huppert disagreed.
“Mental health has become a really important issue that people understand. It’s no longer on the fringes of society,” Huppert said.
He noted that lawmakers may need to be flexible in the face of possible changes along the way as this new model is launched.
“It could take a few years to let it play and watch, and maybe we should ask for some adjustments, which is fine,” Huppert said. “But I think it’s a big step in the right direction.”
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