Category: Financial

Mental Health Funding History…

In 1995 the General Assembly changed the way the county mental health and disability services system was funded and how the county mental health property tax was levied. This change took effect in fiscal year 1996. Unlike other property tax levies that are calculated based on a dollar rate per $1,000 of property valuation, the county mental health and disability services levy was capped at a dollar amount. That same capped dollar amount of 1996 is still in effect.   Since that time some have tried to raise the cap others have fought to either maintain or lower the cap. Before you form an opinion, I think that first one needs to answer the question of why property taxpayers should be paying for mental health and disability funding in the first place. I don’t believe that property owners should pay more for those services. We may agree or disagree on the answer, but I see no correlation between owning property and funding those services. If it is society’s responsibility to partially fund those services, which it is, then it should be society who funds them. It should not be simply on those who own property.   The one thing that was not changed back in 1995 was the old county system. So over the years counties have provided different services with different levels of responsibilities. The larger counties were not all as responsible with their dollars as the smaller more rural counties in my opinion.

In 2012 the General Assembly passed and signed into law to redesign the way state and local governments provide mental health services to Iowans. The law was the culmination of two years of work by legislators, state and county officials, service providers, and consumers to improve Iowa’s mental health system and bring it into the 21st Century.

In order to get more efficiency into the system the General Assembly created mental health service regions and the local boards would provide management of the system. The law set the establishment of a core set of services that would be offered in all parts of the state, and improving the data collection in the system. The law also provided funding mechanism for the system beyond fiscal year 2013, with a redesign of the current mental health levy. The bill would set a per capita rate that would be provided for mental health funding. There is a maximum rate that can be applied to the local property values for a per capita funding level of $47.28. For counties whose levy is currently above the $47.28, their levy was reduced. This resulted in just over $10 million in property tax relief in Fiscal Year 2014. Counties whose levy was below that amount would have the difference provided by the state. No one’s actual property tax levy would go up, as the state would be responsible for the difference. The 1996 county mental health and disability services levy capped dollar amount is still in effect. In addition no county can have a per capita funding level greater than $47.28. So the counties that have grown substantially since 1996 are way below the $47.28 cap, and are bound by the total dollar amount cap.

To put a dollar amount on mental health funding, it is difficult to determine the exact amount funded by Federal dollars. However, in fiscal year 2008, the State’s share was $174.1 million, Counties spent $119.4 million and the Federal spending was approximately $180 million. This totals $473.5 million on just mental health services in the State of Iowa. With $293.5 million of that coming from State and County taxes collected from taxpayers. It is estimated that for the fiscal year 2016, that has just ended, the total State and County amount will reach $435 million. The Federal government share of spending is estimated to be approximately $368 million for services in Iowa. This totaled is approximately $803 million, an increase of $329.5 million in just eight years. To be fair there are probably more services being provided today than in 2008. However, the burden to the taxpayers is real.

The counties that have not grown are either capped by the per capita funding or close to that cap. If that isn’t confusing enough, there has been a big push to bring more equity into the funding mechanism. However, one person’s idea of equity is quite different than the next. It usually comes down to who is asking who to pay. This will be the topic of the next newsletter.

“My failures have been errors in judgement, not intent.”

                                                                                                        – Ulysses S. Grant

For more information on these and other bills: www.legis.iowa.gov

Until next time,

Tom Sands