Republicans in the Iowa Senate are proposing a major change in property tax policy. County property taxes would no longer be used to finance Iowa’s mental health system by July 1, 2022.
Republican Senator Dan Dawson of Council Bluffs said the plan would shift to financing the system entirely with state revenue, like sales and income taxes, “and make sure that all Iowans, wherever you’re at, you actually have the same per capita distribution for mental health funding.”
Shelly Chandler, CEO of the Iowa Association of Community Providers that represents organizations that provide mental health services throughout the state, spoke at a Senate subcommittee hearing on the legislation. Chandler said the bill could help refocus the conversation about how to improve Iowa’s mental health system.
“We all hate property taxes. I hate property taxes,” she said. “We don’t want having conversations about the mental health system to be about property taxes.”
Leslie Wood, a lobbyist for Iowa Mental Health Advocacy, was among those who said they’d prefer a combination of state taxes and local property taxes being used to finance mental health services.
“When a state has a bad economic year, one of the first things that usually gets cut is mental health funding,” she said.
Matt Steinfeldt, a lobbyist for the Iowa Farm Bureau, said using property taxes to pay for a “people service” like mental health care creates inequities.
“Our members believe the state should make mental health a priority in their budget and assume the cost of the system,” Steinfeldt said, “removing this from the backs of property taxpayers.”
The bill addresses a wide variety of other tax issues. For instance, it would phase out $152 million in state payments to cities, counties and schools that were set up when state lawmakers reduced commercial property tax rates.