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Here's what the tax bill means for Iowa's mental health system

The tax bill brokered by Gov. Kim Reynolds and the legislature aims to shift Iowa's mental health system from using property taxes to state funds instead.

DES MOINES, Iowa — Iowa lawmakers are another step closer to changing how the state provides funding to mental health programs, and it could help lower property taxes by September 2022. 

Gov. Kim Reynolds and the legislature brokered the tax reform deal. It passed through the Iowa Senate Monday night 29-15. Reynolds' office told Local 5 she will sign the bill once it reaches her desk since she was part of negotiations.

Iowa is the only state to fund its mental health system through property taxes. Senate File 619 is set to change that, and advocates hope this will better the state's mental health care down the road.

"Iowans have been denied the proper services and help for too long and I think what we've seen happen is finally we've reached a tipping point," said Peggy Huppert, executive director of the National Alliance on Mental Illness (NAMI) of Iowa

The state currently uses property tax levees to fund mental health programs. This has been done for decades. According to NAMI, individual counties used them to pay for county-run mental health facilities. 

Advocates said this caused some equity problems with care because some counties were able to have great mental health services while others struggled. 

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In 2013, the state took a different approach by creating 14 mental health regions in the state, creating the system in place today. Property taxes are used to pay for mental health services in each region. 

While it's better than the county approach, many say it's still not equitable. 

"I often say if you set out to design a more dysfunctional system to deliver Human Services, it would be hard to come up with something," Huppert said. 

In short, the new plan would shift mental health costs to the state. Republicans say this would not only lower property taxes for Iowans but also provide better mental health services.

A fiscal note from the legislature says SF619 would eliminate the property tax levy over a two-year period. 

Some believe mental health services may not get better, but Huppert disagreed. 

"Mental health has emerged as a really major issue that people understand. It's not at the fringes of society anymore," Huppert said. 

She did note lawmakers may have to be flexible to potential changes down the road as this new model rolls out. 

"It might take a few years to let it play out and see and then we might have to ask for some adjustments, which is fine," Huppert said. "But I think it's a huge step in the right direction."

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