Capitol Notebook: Iowa behavioral health care advocates concerned about federal funds funneling through state

Iowa behavioral health advocates told state lawmakers Wednesday that they are concerned with a legislative proposal that would have the state distribute roughly $7.8 million in federal funding rather than much of that funding going directly to community health centers.

State lawmakers are considering House Study Bill 327, a bill from Gov. Kim Reynolds that directs the state appropriation of more than $574 million in federal block grants.

During a legislative hearing on the bill Wednesday, behavioral health advocates expressed to lawmakers their hesitation with a provision that would have the Iowa Department of Health and Human Services distribute roughly $7.8 million in federal Community Mental Health Services Block Grant funding.

Currently, under a state law passed in 2023, 70 percent of those funds are dedicated directly to the state’s community mental health centers.

Behavioral health advocates said the new proposal creates funding uncertainty for them at a time when the state is already undergoing a transition to a new behavioral health model. Reynolds and lawmakers in 2024 overhauled Iowa’s delivery system for mental and behavioral health services by combining 32 mental health and substance use regions into seven unified behavioral health districts, while placing disability services under the jurisdiction of the Iowa Department of Health and Human Services.

Amy Campbell, a lobbyist for the Iowa Behavioral Health Association, told lawmakers Wednesday that providers are asking for at least a one-year delay on any changes to the block grant funding system so those providers can have more funding certainty in a time of transition.

“I think there’s a lot of questions still with the transformation of the system, which is why we’re asking that you consider leaving everything alone for (one or two budget years) so that people as a business can make a decision on how to move forward with their services,” Campbell said.

Bill aims to help service organizations with VA claims

The Iowa Department of Veterans Affairs would provide matching grants to veterans service organizations to hire staff to assist Iowa veterans with federal benefits claims under legislation advanced by House lawmakers.

House File 909 unanimously passed the House Veterans Affairs Committee last month and is now working its way through the appropriation process as lawmakers turn their attention to crafting a state budget for the upcoming fiscal year that begins July 1.

A three-member subcommittee unanimously signed off on advancing the bill for further consideration and approval by the Iowa House budget committee.

The bill would appropriate $250,000 from the state’s general fund for the 2025-26 fiscal year to be deposited into the grant fund, and directs the Iowa Department of Veterans Affairs to create application procedures and administrative guidelines necessary to implement the program.

If passed, nationally accredited veterans service organizations that provide claims assistance to veterans seeking benefits from the Veterans Benefits Administration — such as the American Legion, Veterans of Foreign Wars and Disabled American Veterans — could apply for grant dollars to increase the number of professional service officers supporting Iowa’s veterans suffering from service-connected injuries and illnesses.

John Derner, department adjutant with The American Legion of Iowa, said it has become more difficult for the VSOs to provide the needed level of assistance due to reduced revenue from declining membership and the increasing number of claims for VA benefits.

“The claims typically start at the county, and then they get submitted either through a VSO to the VA or directly to the VA,” Derner told lawmakers on Wednesday. “And then, the veteran signs power of attorney over to one of the VSOs to advocate for them (as their claim is adjudicated by the VA).”

The bill proposes a matching grant program where VSOs contribute funds and the state matches it for positions in federal buildings to assist with VA claims.

In fiscal year 2024, the American Legion handled 2,078 new claims, securing $2.2 million in new benefits and managing $402 million in total benefits for Iowa veterans. The bill aims to enhance VSO capacity, by expanding the number of employees to handle more complex claims and appeals, which most county veteran service officers do not handle, Derner said.

He said the American Legion and other VSOs are also fielding a larger volume of claims involving environmental exposure, due passage of the PACT Act that expands VA health care and benefits for veterans exposed to burn pits, Agent Orange and other toxic substances. Such claims can be complex because they often require establishing a direct link between service-related exposure to a specific hazard and a diagnosed health condition.

The Iowa Department of Veterans Affairs, which is registered undecided on the bill, noted the need for additional administrative staff and training.

Rep. Henry Stone, R-Forest City, a member of the House subcommittee and a U.S. Air Force veteran, served four deployments to the Middle East — including to Kuwait during the Gulf War, where military bases in the region used open-air burn pits to dispose of waste.

“So I completely understand that getting my fellow brothers, you know, that ability to get help and compensation,” Stone said.

Reps. Ray Sorensen, R-Greenfield, and Jerome Amos Jr., D-Waterloo, also supported the bill.

Sorensen said it’s a low cost to directly benefit veterans given the overall budget.

School districts could use management levy funds for school safety

School districts could use funding from the district management levy to fund school safety under a bill unanimously advanced out of the Iowa House Ways and Means Committee Wednesday.

House File 311 would allow school districts to use money from district management levies to pay for the operating and licensing costs of school safety infrastructure, including hiring school resource officers, private security officers and reserve peace officers.

“Safety in schools is paramount to getting a good education,” Rep. Eric Gjerde, D-Cedar Rapids.

Rep. Mike Vondran, R-Davenport, said the legislation would help serve the individual needs of school districts.

The bill would apply to school budget years beginning on or after July 1, 2025.