2020 IOWA LEGISLATIVE PREVIEW

Children's mental health system underway, but who pays for it?

Funding a key discussion in 2020 Legislature

“We passed the children’s mental health system last year, which is phenomenal because they’ve been talking about it forever,” Gov. Kim Reynolds says. “We got it done in a bipartisan manner. And maybe now it will allow us to see where some of the gaps are at.” (The Gazette)
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Eighth in a series of articles about issues likely to come up for debate in the 2020 Iowa Legislature.

State government officials have worked in recent years to expand mental and behavioral services in Iowa, and many top leaders would say they largely have been successful.

But that conversation will continue into this legislative session beginning Monday — specifically about paying for those services.

The latest of those bills came during the 2019 session, when Gov. Kim Reynolds signed into law House File 690, which established a statewide mental health system for children under 18.

“We passed the children’s mental health system last year, which is phenomenal because they’ve been talking about it forever,” Reynolds said last month during an interview with The Gazette. “We got it done in a bipartisan manner. And maybe now it will allow us to see where some of the gaps are at.”

In 2018, the governor also signed into law a bill that created six regional “access centers” — facilities to help people in a mental health crisis.

According to Iowa’s Senate Majority Leader Jack Whitver of Ankeny, there’s “no doubt mental health funding will be a priority this session.”

“We have to fund the bills we passed the last two years,” he said.

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But understanding what that funding formula may look like is “the hard part” of establishing the children’s system, said state Sen. Liz Mathis, D-Hiawatha.

The upcoming session, legislators have said, will feature a multipronged discussion of state tax policies encompassing income, sales, property and business taxes — and at the top of the list is a discussion that dates back a decade to a constitutional amendment passed by Iowa voters.

That amendment authorized the Legislature and governor to raise the sales tax and direct the proceeds into a wide range of environmental, natural resources and outdoor recreational initiatives.

The crux of the Iowa Water and Land Legacy initiative held that three-eighths of a new penny sales tax increase — estimated to raise about $170 million a year — would flow into a trust fund with a designated formula for distribution.

That would leave up to nearly $380 million in new sales tax proceeds — the rest of the penny — up for other uses.

Some possible uses now being discussed include plowing the money into lowering income tax rates or having the state take over all or part of mental health costs currently paid for by local property taxes.

Mental Health and Disability Services Regions currently are funded partially through county property taxes. These 14 county-based regions oversee the new children’s mental health system, which is built into the already existing adult system.

The children’s system, however, would be overseen by a separate state board and the law requires the regions to offer certain core services.

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Reynolds has said she hopes to keep counties’ role in funding mental health services, but what that may look like exactly is unclear, as “there’s a whole host of things we’re looking at on what that would look like.”

The passing of the children’s mental health system was another example of state officials providing an expectation of the regions without any additional funding, said one region CEO.

“The Children’s Behavioral Health system coming in last year with that mandate is the last in a line of services that the legislators have expected regions to provide without making any adjustments to the funding formulas that have been established for years,” said Mae Hingtgen, chief executive officer of the Mental Health and Disability Services of the East Central Region.

Last year, the non-partisan Legislative Services Agency estimated the establishment of a children’s mental health system would cost Iowans nearly $3.7 million in fiscal 2020 and more than $6.3 million the following year.

Medicaid would cover $423,110 in year one and $1.3 million in year two, with Iowa’s 14 Mental Health and Disability Services regions covering the remainder.

“I think that people have this idea that all the regions are going to fill all these gaps,” said Okpara Rice, chief executive of Tanager Place in Cedar Rapids and a member of the state board overseeing the children’s mental health system.

“It may not actually work that way in application. The reality is none of us know, but we do know there has to be more money in the system.”

Core services are covered, but Rice said the current system setup means children who fall in gaps in coverage — including children not covered by Medicaid and whose insurance does not cover mental health services they need — ends up with the regions to supplement.

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Both Rice and Mathis, who also is a member of the Children’s Behavioral Health System State Board, stated that a challenge facing the regions is a disparity in the levies in each region, as some counties are unable to raise their property taxes.

“That’s the dilemma because every county, and therefore every region, is going to be a little bit different because their levies are all different,” Rice said. “So some areas may have more money to invest in mental health and some may not have any.

“You can’t have property tax relief and say we got to have more money for mental health funding. At some point the revenue has to come from somewhere.”

Rod Boshart and James Q. Lynch of The Gazette Des Moines Bureau contributed to this report.

Comments: (319) 368-8536; michaela.ramm@thegazette.com

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