Common Good Iowa

2021 legislative session recap

It was a long and mostly frustrating legislative session for Iowans advocating for policies to advance opportunity for everyone. There were a few policy wins, but on balance, Iowa appears to be a less open-minded, less inviting, less caring state at the close of the 2021 legislative session. Much of the legislation passed makes our state less able to meet public needs, especially the needs of its least powerful and most marginalized residents.

Here is our recap of what Iowa lawmakers did this session:

The good — or at least better than before (offensive wins)

Health and family support

  • Approved telehealth parity for behavioral health services, requiring private insurers to reimburse the same amount for a behavioral health service whether provided via telehealth or in person. This requirement will improve access for people, especially those who live far from mental health practitioners, who otherwise wouldn't be able to be seen. A genuine win.

  • Moved to reduce the waiting list for children who need a waiver from Medicaid rules for mental health services. The Children's Mental Health waiver covers a variety of services for children with serious emotional disturbances. Adding funding to the program will help children who qualify access services sooner. 

Child Care

  • Approved increasing reimbursement for providers participating in Child Care Assistance to the 50th percentile of the current (2020) market rate. This is an important step forward, but it’s worth noting that Iowa’s rates still fall below the federal standard: the 75th percentile of current market rate. There’s more to do to help providers open more slots and earn a living wage and offer families choice of providers.  

  • Increased the Child Care Assistance exit eligibility level — the maximum income families, once on the program, can reach and keep their assistance — from 225 percent to 250 percent of the federal poverty level. This change is estimated to help 120 families.

  • Expanded families’ access to the child and dependent care tax credit by doubling the income eligibility limit from $45,000 to $90,000. The average annual credit is projected to be $165 in FY 2022 and $183 by FY 2026.

  • Provided an additional $7 million to the WAGE$ program, which offers stipends to early care and education workers to help retain and better compensate staff. The Iowa Association for the Education of Young Children, which currently administers WAGE$, will receive these funds to expand the program statewide. This was an administrative, not legislative, action that will be paid for with federal COVID relief dollars.

  • Formed a task force to recommend solutions to Iowa’s child care crisis. The task force, formed by executive order in April, includes several workgroups that have been meeting weekly. They are on track to submit recommendations by July and have been instructed both to think “big and bold” and to limit recommendations that cost money.

Education and family support

  • Approved an additional $1 million for the Family Development and Self-Sufficiency Program, which works with families who face significant barriers to self-sufficiency, offering home visits, goal setting and connections to community resources.

  • Increased funding to Early Childhood Iowa by $544,000.

  • Approved forming a task force on growing a diverse PK-12 teacher base in Iowa.

  • Approved changes in the school aid formula so supplemental funds for English Language Learners are allocated on a two-tiered model, with learners needing more intensive help weighted more heavily. Beginning in FY 2023, approximately 18,400 ELL students identified as intermediate based on test scores will generate $70 less funding per pupil, and approximately 4,900 ELL students identified as intensive will generate $282 more per pupil.

The good (defensive wins)

Safety net

  • No extreme eligibility verification requirements that would have made it harder for Iowans to secure and maintain coverage in critical safety-net programs like Medicaid and SNAP — and in turn harder to stay healthy, put food on the table and support their families. For the fourth year, legislation was introduced and ultimately defeated in the House. Common Good Iowa worked with numerous partners to help legislators understand the devastating impact of this proposal on their constituents. 

  • No one-week waiting period for unemployment benefits, which would have unnecessarily harmed people put out of work through no fault of their own. Their bills would not stop, but they would have to wait for help from the state.

  • No school vouchers that would divert public dollars to private schools, hasten greater school segregation, and lessen public accountability of education funding.

The good (damaging actions not taken)

  • No attacks on public pensions, including IPERS.

Mixed bag

Child care

  • Authorized a “yet to be determined” amount to fund child care from the Employer Innovation Fund, part of Gov. Reynolds’ Future Ready Iowa initiative. Strategies like these can help people living in a certain community or working for a certain employer but are no substitute for a systemic approach like improving Child Care Assistance — the backbone of our state’s child care system.

Mental health funding

  • Approved shifting mental health funding from county property taxes to state general funds. Committing to a standing state appropriation for mental health services is a potentially promising step toward sustainable funding, something CGI and its partners have advocated for, but total state control removes the ability of counties to address local need and subjects the entire funding stream to the whims of state lawmakers (see bullet on ending the backfill, below). A partnership of the state and counties, including resources from both, is a more sustainable and stable option. 

Higher ed

  • Increased funding for community colleges but froze funding for Regents universities. Another year with no meaningful change in the long-term trend toward students and their families having to pay more in tuition and fees — and take on more debt.

Sales tax/environmental funding

  • Withdrew proposal to increase the sales tax. While voters in 2010 approved in a ⅜-cent sales tax that would go into a trust fund exclusively for fund environmental enhancement and outdoor recreation, the fund has gone unfunded for a decade. The Governor previously proposed raising the sales tax a full penny and using most of it for income-tax cuts and other purposes not part of the 2010 referendum, while shortchanging the trust fund. So we got no regressive tax change, but no funding for the trust fund, either.

The bad (action taken)

Tax cuts that reduce the revenue required to meet community needs.

  • Approved ending the state’s so-called "backfill" of commercial and industrial property tax revenue, reversing a 2013 promise to make up for revenue that local governments lost to state-ordered property tax cuts.

  • Approved accelerating cuts in tax rates by removing revenue thresholds, or “triggers,” set in a 2018 tax bill, for their implementation. The largest losses from these changes will come in FY 2023, $155 million, and FY 2024, $180 million — and will hinder the state’s ability to pay for services important to Iowans, including schools, environmental protection and public health. 

  • Voted to repeal the inheritance tax at a cost of $107 million a year when fully repealed in 2027. This change will compound unfairness in Iowa taxes — treating people differently despite similar incomes, ignoring the concept of ability to pay in taxation, and disproportionately benefiting the wealthy.

Federal aid loss

  • Approved major tax cuts that could cause the loss of hundreds of millions in federal aid from the American Rescue Plan Act. These cuts through the end of 2024 are estimated to total $665 million. Some share of that, yet to be determined, will cause a dollar-for-dollar reduction in ARP funds that are intended for use in COVID-19 recovery — not state tax cuts.

Diversity, equity and inclusion

  • Repealed the ability of local districts to use diversity plans to stabilize their school populations and protect low-income students and expanded open enrollment rules that permit students to leave those districts. These change are likely to lead to less racial and ethnic diversity in certain districts.

  • Passed extreme restrictions on training on and discussion of racism and sexism at all levels of government and schools, taking these decisions out of the hands of other elected officials, including local school boards.

Public funding for public schools

  • Committed inadequate per-pupil spending for K-12 schools. The 2.4 percent increase to Supplemental State Aid keeps average annual growth since FY 2012 below 2 percent, compared with 3.1 percent the prior decade.

  • Expanded the School Tuition Organization credit that diverts tax dollars from public purposes to scholarships for private-school students. Also raised the cap from $15 million to $20 million and raised the Tuition and Textbook tax credit.

  • Approved private-run charter schools to be operated outside local school district authority, funded by diverting local school district funding from public schools. Proponents claim these are part of the public school system, but the only public authority comes from the state Department of Education, not locally elected public officials.

Child care

  • Approved allowing individuals providing child care in their homes to take care of 6 or fewer children without being registered, an increase from 5 or fewer. Increasing the number of kids in unregulated care encourages more homes to not register and de-prioritizes the health and safety of children in care.

Public health and voice

  • Passed a voter suppression bill that will make voting more difficult without enhancing election security, particularly by reducing time windows for mail-in voting and refusing to count mailed ballots arriving after election day even if postmarked in time, as has been the law.

  • Removed local authority to require face coverings in a pandemic.

The bad (needed actions not taken)

Child care

  • No increase in the Child Care Assistance family entrance eligibility level, currently at 145 percent of poverty and among the nation’s most restrictive. Parents, stretched, need support so they can go to work or school while their children attend quality child care. This will be among Common Good Iowa’s highest child care priorities for 2022.

Maternal health

  • No extended Medicaid eligibility for pregnant women. Extending coverage from 60 days to 12 months postpartum would assure continuity of care during an extremely vulnerable time and improve the health of new mothers. Legislation introduced this session did not survive the first funnel. However, the idea continues to gain traction among legislators, and we hope Iowa will join nearly one dozen other states in pursuing this policy opportunity.

Diversity, equity and inclusion

  • No racial equity impact analysis of proposed legislation. Analyzing how proposed legislation would affect communities of color is a way to hold lawmakers accountable for dismantling barriers and making sure our state offers every Iowan a path to opportunity. A bill introduced in the Iowa House was not assigned to a subcommittee. We will continue to work with and educate legislators on this important issue.

Solar tax credits

  • Blocked the extension of tax credits owed for residential solar projects. The yearly cap of $5 million on both residential and solar tax credits has been inadequate for years, creating a perpetual waitlist. There was already a nearly $7 million backlog at the beginning of 2021. Not only did lawmakers not expand the credit to meet economic demand, but their refusal to update the law due to federal changes effectively ends the state credit after this year. Individuals who counted on the credit to reduce their solar installation costs but still left in line will be without a benefit, and businesses’ benefits will be delayed.

Taxes and federal COVID recovery aid

  • No legislative direction on how Iowa should use the federal American Rescue Plan funding, and no inclusion of ARP funds in the new FY 22 budget.

  • No tax credit reform to assure taxpayer dollars are used for public priorities, not as giveaways to profitable companies for activities they would do anyway.

Worker protections and workplace safety

  • No increase in the minimum wage, which has been stalled at $7.25 per hour for over 13 years.

  • No expanded enforcement capacity to increase worker safety, particularly for essential workers most at risk from COVID, or crack down on wage theft. 

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