Iowa’s rushed changes to mental health funding model bring uncertainty

As it headed for the door last month, the Republican-controlled Legislature approved far-reaching changes in the way Iowa funds mental health and disability services. Gov. Kim Reynolds is expected to sign them into law.

Those services are currently funded by county property taxes through 14 multicounty MHDS regions. Under the legislation, the state will take over that funding while county tax levies for mental health will be phased out.

The idea of a state funding takeover has bounced around the Statehouse for years, and was seen as a possibility throughout the 2021 session. But the massive tax bill including the change came together in closed door GOP negotiations, and once a deal was done, it was approved before its details were fully understood. It’s no way to make policy affecting tens of thousands of Iowans who seek or provide mental health services. But sadly it’s become the norm under the golden dome.

Counties asked for a year to prepare for the new funding system, but GOP lawmakers refused. Now the regions, which already submitted their budgets, are waiting to see how the new law will be implemented and how it will affect services.

“We’re going to have to pivot very quickly,” said Linn County Supervisor Ben Rogers, a member of the East Central Region MHDS governing board. “I’m going to remain open-minded.”

On one hand, state funding could be a positive, especially for providing stable funding to regions that have struggled provide services.

But the state’s track record is making local officials and providers nervous. In 1996, the legislature capped local mental health levies and promised state funding to fill the remaining budget gap. But Rogers said the state provided funding in just two budget years out of 14 the system was in place.

Iowa’s public schools and courts system each receive annual funding falling well short of needs. Will mental health services benefit from an annual Statehouse tussle over funding?

Will regions that have provided extra services, such as the 24-hour access centers in Linn and Johnson County, still be able to fully fund them?

The bill also gives much more power to the state to oversee MHDS regions, which would enter into performance-based contracts with the state. The arrangement could provide needed oversight and expectations for services, or lead to a heavy-handed approach that puts state objectives ahead of local needs. Like so much else in the bill, it’s uncertain.

The funding change was lauded mainly by Republican lawmakers as property tax relief. But the bill also eliminates backfill payments to local governments to make up revenues lost to property tax cuts approved in 2013. Democratic critics of the bill have questioned whether canceling the backfill will actually lead to property tax increases.

We’re hopeful the new model can lead to better access to services across all of Iowa. The proof will be in the funding. A lowball state budget offering will prove this change is more about cutting property taxes than improving MHDS.

And it’s unacceptable that a change this significant was made, in the end, with little input from affected Iowans and without a clear explanation of what the changes will mean. It’s reminiscent of the surprise decision to privatize Medicaid in 2015.

Public officials shouldn’t be dodging the public. Open the doors and let Iowans understand and provide input. That’s the way democracy is supposed to work.

(319) 398-8262; editorial@thegazette.com