Since the 2020 Iowa legislative session got underway on Jan. 13, one of the hot topics of conversation has been mental health services for Iowans of all ages. One component of a comprehensive plan introduced on Jan. 14 in Gov. Kim Reynolds’ Condition of the State address was the Invest in Iowa Act which includes a plan to reduce the amount of the current mental health levy that is coming from property taxes. This would then be covered by a portion of a one-cent sales tax increase. According to the governor, this will result in a net decrease in taxes for residents. While working with stakeholders, Reynolds says she consistently heard them saying mental health services should not be subsidized by property taxes.
A key component is that the backfill will not be touched. This is dollars paid back to local governments that replaces revenue lost on commercial and industrial property taxes that are exempt. Reynolds stresses the shift from property to sales tax is part of the plan for an overall tax reduction.
Currently, the Tax Foundation has Iowa ranked at 42nd for income taxes. This change would move Iowa to 20th, making us more competitive and creating a compelling case that Iowa is a great place to do business while providing opportunities for Iowans. It will also streamline the income tax structure from nine to four brackets. She also wants to remind residents that not all goods and services are taxed as is done in other states. Food and prescriptions are not taxed and she has included diapers in the new bill, which is still being fine-tuned. Reynolds says the Invest in Iowa Act will couple an estimated $77 million offset in property taxes with a significant investment in water quality, conservation and quality of life. Earlier this month, CEO of Rolling Hills Community Services Region, Dawn Mentzer, said it was her opinion these proposed changes are all part of a plan to create a statewide system for mental health and disability services that will be overseen by the Managed Care Organizations (MCOs). Reynolds wants to respond to that belief.
This, she has told legislators, is a place to start, a canvas that can be worked on once they hear concerns and ideas through open dialog and input as it moves forward. Reynolds points out they are working with all stakeholders to provide services to children, making schools points of service and a comprehensive telehealth system, trying to ensure that patients are getting the help they need instead of falling through the cracks into the legal and medical system and filling the gaps they find in services. The entire interview with Gov. Reynolds on this complex topic can be found included below.
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Full interview with Governor Kim Reynolds
