A tax invoice, and finish to the legislative session, perhaps in sight

As the Iowa legislative session enters its eighteenth week, a few funding issues stand in the way of the session adjourning. But after meetings between House and Senate Republicans and Gov. Kim Reynolds, the final piece may be ready.

“This bill is the pathway forward,” said Sen. Dan Dawson, the chair of the Ways and Mean subcommittee, which met today to hear public comments about Senate Study Bill 1276.

“There is no other train in this capitol right now that is going to leave the station and address all of these priorities,” he said.

The bill in question has 26 divisions and provides a shift in Iowa taxpayer money and the taxes Iowans must pay. It includes measures like more money transferred to the housing trust fund, telehealth provisions for mental health and tax exemptions for COVID-19 relief money.

The bill also eliminates the state’s inheritance tax, state revenue “triggers” from the 2018 tax law—levels the state must reach for income tax changes to go into effect in 2023—and the “backfill,” which are state payments made to counties to replace the money counties used to collect from commercial and industrial properties.

Most speakers, from business groups to housing groups to local government groups, supported the bill or only had minor changes to suggest.

Mental Health

The majority of speakers at the hearing mentioned this part of the bill, and voiced support for the changes to mental health funding and to the equal treatment of telehealth.

This bill shifts funding for mental health services to the state by eliminating the use of local property taxes. Instead, the bill created a fund in the state treasurer’s office.

Mental health advocates have said for years that property tax levies aren’t enough to provide for mental health needs, and that the money should come from a centralized state location.

Sen. Pam Jochum, as well as some speakers, said they supported the idea but they wished it was more solid.

“I wouldn’t even have a problem with that if we had a guarantee that the state was gonna make good on that commitment,” Jochum said.

She pointed out that the state still hasn’t funded legislation passed in 2018 that would create a mental health system for children and expand mental health care access for adults.

“I think it would be safer to have a little bit of a mixture of both local and state funding,” said Leslie Carpenter, co-founder of Iowa Mental Health Advocacy.

However, she said she was excited by the amount of oversight the state will have over the regions because it will ensure people get the care they need, especially people who don’t have access to mental health care.

The bill also mandates that insurance companies reimburse mental health professionals for telehealth the same way they would if the appointments were done in person.


The housing division was also mentioned, favorably, by many speakers.

Division seven of the bill increases the amount of money that can go into the housing trust fund to $7 million from $3 million.

“When this bill does pass and is signed by the governor, it will represent one of the most significant commitments to affordable housing that the state has made in quite some time,” said Jon Murphy, of the Iowa Housing Trust Funds Advocate Network.

The bill also includes assistance for people who need housing after a natural disaster like last year’s derecho, which made houses unlivable for many Iowans. A new fund is created inside the Iowa Economic Development Authority specifically for replacement housing.


A small section of the bill excludes COVID-19 grant money from individual and corporate income tax calculations. It applies to any money given between March 17, 2020 and Dec. 31, 2021.

Though many divisions are different between the House and Senate bills–as Jochum pointed out–Dawson said there were details to iron out, but he thinks the bill is a perfect compromise.

“The governor’s office proposed a compromise that represents the best idea of all three parties in this equation—the Senate, the House and the governor’s office,” he said.


by Nikoel Hytrek
Posted 5/10/21