Hite Capitol Update – March 17th, 2022

by Dustin Hite

This week concludes the second (and final) funnel week in the Iowa Legislature. All bills, besides those in budgeting committees, must pass out of committees in both the Iowa House and Senate to remain eligible for consideration. Today we held the last Education Committee meeting for the 2022 session, where we passed five bills that are now eligible to be considered by the House. There were many bills passed out of House committees as well as the House Floor. Below are some highlights of this week from Appropriations and Human Resources:

Revenue Estimating Conference Raises State Income Projections for FY 2022 & FY 2023
Iowans received good news last Thursday at the March meeting of the Revenue Estimating Conference (REC). General Fund revenue is expected to come in even stronger than what the three-member panel projected when they met in December.

For the current fiscal year (FY 2022), state revenues are expected to be $9.1711 billion through June 30. That amount is $110.5 million higher than what the REC had forecast at their December, 2021 meeting. The new forecast expects state revenue to grow by 4.2% for the year, or $370.5 million. This forecast includes the tax reductions passed by the Legislature in the 2018 and 2021 sessions that impact FY 2022.

The new revenue figure means that there will be an even larger deposit in the Taxpayer Relief Fund than expected when the Legislature passed tax cuts earlier this session. The non-partisan Legislative Services Agency now projects that the state will deposit $1.002 billion into the Fund at the end of Fiscal Year 2022. This will leave the Taxpayer Relief Fund with a balance of $2.0564 billion.

For the next budget year (FY 2023), the panel agreed to a state revenue forecast of $9.1563 billion. Some members of the Statehouse press corps immediately started reporting that state revenues were falling, since the amount was $54.3 million below the panel’s December forecast of $9.2106 billion. As usual, these reports were inaccurate because they missed the key point that the Revenue Estimating Conference made very clear – the impact of this year’s tax cut bill.

Since Governor Reynolds has signed House File 2317, the bill lowering the income tax rate to 3.9% and eliminating the tax on retirement income, the Revenue Estimating Conference is required by law to apply those revenue adjustments to their new projections. For FY 2023, HF 2317 is projected to reduce state revenue by $236.3 million. So, the March forecast includes those adjustments.

Applying HF 2317’s impact to the December REC estimate, state revenue would be expected to be $8.9743 billion. Here is how that is calculated:

Fiscal Year 2023
REC Forecast for FY 2023 $9.2106 billion
HF 2317 Impact -$0.2363 billion
Adjusted Dec. FY 2023 Forecast $8.9743 billion

A quick comparison of the March forecast ($9.15 billion) and the adjusted December forecast ($8.97 billion) shows that revenue is not falling like the media calculated, but actually grew by $182 million.
Adjusted Dec. Forecast $8.9743 billion
March Forecast $9.1563 billion
Difference +182 million

That is increase of nearly 2 percent in state revenue. This fact has somehow eluded certain reporters.
Even with the impact of the new tax cuts, state revenue is essentially the same for these two years. That is a sign of a strong Iowa economy, which was definitely helped by the efforts of Governor Reynolds and House Republicans to keep the state as open and normal as possible during the pandemic. Iowa’s finances are in good shape thanks to strong leadership.
House Republicans Continue to Expand Access to Mental Health Care
Over the last 5 years, the Legislature has passed bipartisan mental health reform, created the state’s first ever children’s mental health system, created long-term sustainable funding for the Mental Health and Disability Services Regions, provided significant funds to mental health providers through Medicaid rates, and expanded access to mental health care through telehealth.

However, too often legislators continue to hear that there are open beds at the 27 hospitals with inpatient psychiatric units, yet nowhere to put difficult mental health patients. Iowa House Republicans are committed to always working towards additional ways to treat mental illness like any other health care condition.

That’s why this week, the House overwhelmingly passed three pieces of legislation to address mental health workforce and additional beds for Iowa’s most difficult patients.

Adding Psychiatrists: House File 2529 funds 12 psychiatry residents per year with a focus on training through Iowa’s state facilities, including the mental health institutes. Iowa ranks 44th in the country in psychiatrists per capita. This bill will help increase the number of psychiatrists trained in Iowa, and provides preference to Iowans in the application process.

Mental Health Provider Loan Forgiveness: House File 2549 provides $1.5 million per year to expand loan forgiveness opportunities to recruit and retain mental health providers in Iowa. In order to receive the funds, the mental health provider must commit to providing care in Iowa for at least 5 years. The funds will be prioritized to those working in mental health shortage areas.

Psychiatric Intensive Care Unit: House File 2546 is a bill to require the Department of Human Services to establish a Medicaid rate for those needing a higher level of inpatient psychiatric care. By paying hospitals based on the acuity of the patient, more hospitals will be willing to care for the most difficult mental health patients.

It takes time to develop the new mental health services and attract mental health providers to the state, and Iowa has made great progress in expanding community supports statewide. Once all of these services are up and running, they will serve mental health patients in the proper setting, decrease the time law enforcement will spend transporting patients and waiting in Emergency Rooms and jails, but most importantly, these bills will treat Iowans with mental illness like any other health condition.

Supporting Children in Foster Care
Recently, the House unanimously passed House File 2507, a bill that supports Iowa’s children in foster care. This bill comes from the Department of Human Services as a way to implement the federal Family First Act.

Family First is a federal law that changes the direction of child welfare services across America. Iowa is the 11st state in the nation to receive approval for its prevention services and programs plan, and Iowa is receiving more federal money than any other state to support high quality legal representation for parents. Family First is intended to safely reduce the foster care population, place children with known and stable caregivers, and reduce the number of youth in shelter and group care settings.

Importantly, this bill requires courts to secure the least restrictive care and preferences placement with the child’s family whenever a child is removed from their parents. Too often, the child has been left out of the process and their voice is the most important in determining who will care for them. Children do best in families.

The House also unanimously passed House File 2252 which will increase the upper age of foster care from 18 to 21 to ensure these foster youth are able to have adequate supports as they transition to adulthood. The bill also requires the courts to contemplate sibling placement throughout the adoption process for foster children, as we know that it can be extremely traumatic for children that have lost their parents, to additionally lose their siblings.
My wife, mother, and two daughters visited me at the Capitol on Monday and met with Speaker Pat Grassley. As you see in the photo, my daughters led the House in the Pledge of Allegiance.

I encourage you to reach out to me- dustin.hite@legis.iowa.gov with any questions, comments, or concerns, or to schedule a visit to meet with me at the Capitol.

Posted by on Mar 17 2022. Filed under Local News, Politics. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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