Iowa officials push for increase in human services budget

DES MOINES - State human services officials Tuesday began work on a fiscal 2016 state budget proposal that seeks to spend an extra $134 million to cover shrinking federal match money and implementing new commitments made by the Legislature and governor.

Chuck Palmer, director of the state Department of Human Services, said the 7.54 percent increase his agency is seeking, on top of the current $1.775 billion state general fund budget, will be needed to serve the 973,000 Iowa who rely on the agency's core programs and services and accommodate reforms that redesigned mental health delivery and expanded health care access.

'The department's budget is probably the most volatile budget in state government,” Palmer told members of the Iowa Council on Human Services, which plans to finalize by Wednesday a proposal covering the second-largest piece of the state budget pie to submit to Gov. Terry Branstad.

The nearly $1.915 billion in state general spending that will comprise about 30 percent of the agency's overall $6.28 billion budget from all federal, state and other outside sources will include adjustments needed to make up for a $76 million decline in federal matching money for programs where Iowa's share is cut because the state has recovered from the recession better than other parts of the country.

'That's a very large hit that we need to take into account,” he said.

DHS officials also project the current state budget will have a projected shortfall of $48.5 million in unmet needs and other one-time changes that will affect the fiscal 2016 ledger.

Palmer said his agency is seeing the affects of changes mandated by the Legislature and governor than launched a new regional mental health delivery system in July and a new Health and Wellness program that has enrolled more than 107,000 new people for health coverage and 17,000 more people receiving dental coverage since Jan. 1. The mental-health costs are starting to factor into the state budget share but the state won't start picking up the expanded health care charges until at least fiscal 2017.

The DHS director said his staff has joked that trying to 'operate the second-largest insurance company in the state of Iowa” without any financial reserves when each Medicaid program percentage point equals $30 million was analogous to 'landing a 747 on a 20-foot carpet” - something that he said was only one of the many challenges they face in meeting the needs of their clients and providers.

'This is truly a journey,” he told council members at the start of Tuesday's budget decisions, 'and this is a step in that journey because I don't consider this budget totally complete yet.”