Changes in Iowa's mental health system are improving services but putting pressure on Scott County's budget.

That was the message the Scott County Board of Supervisors heard earlier this week as Lori Elam, community services director, discussed the county's proposed mental health budget and some new crisis services on the horizon. 

Scott County's fiscal year 2020 budget proposes spending $5.39 million for mental health services — an increase of $901,890 over the current fiscal year. In addition, the county wants to raise its mental health tax levy rate to the maximum allowed by the state. That increase contributes to the county's proposal to increase its property tax rate for the first time in a decade. 

"There were a lot of legislative impacts which resulted in financial impacts for our region," said Elam, who also serves as CEO of the Eastern Iowa Mental Health/Disabilities Services Region.

Scott County is part of a five-county mental health region — the fifth largest in the state — that also includes Muscatine, Clinton, Cedar and Jackson counties.   

During a budget work session earlier this week with supervisors, Elam said one of the unintended consequences of the state legislature's changes has been "bouncing county tax levies."

David Farmer, the county's budget and administrative services director, said Scott County was able to fund an additional $900,000 in mental health costs this year without a tax levy increase. "But the growth this year in all the budget items (across the county) necessitates an increase in the mental health levy," he said Thursday. 

Under the proposed budget, the county would increase its mental health levy 11 cents to 58 cents per $1,000 of taxable evaluation. That is part of a 19-cent increase the county is proposing in its urban levy rate this year.

The urban levy rate would increase to $6.01 per $1,000 valuation from $5.82. That would mean an additional $27.70 in county property taxes for the owner of a $150,000 home. 

In an interview Thursday, Elam said in 2017 Iowa Senate File 504 changed the levy authority, which meant four counties in the Eastern Iowa region had to reduce their mental health levy to $30.78 per capita while Scott County was allowed to increase its levy from $19.30 to $30.78. She said the county chose not to raise it to that level then because it had $13.9 million in the region's fund balance.

But another requirement of the legislation mandated counties and regions spend down their mental health fund balance to 20 percent of their mental health expenditures, she said. 

"Now, as we look at fiscal 2020, it appears all five counties will be at $30.78 per capita because we spent our savings down," she said, adding that could lead to huge swings in property taxes. 

For example, Elam said region member Cedar County is considering raising its mental health levy from zero to $30.78 per capita. 

But even if all five counties levy at the maximum, it would generate $9.243 million — or about $5 million less than the region's budget last year. 

"To make up the difference, we're eating away at our fund balance," she said. "That is not good business practice. That is one-time funding. It's like a savings account. It doesn't regenerate itself." 

At the same time, the region faces new expenditures to expand and add new mental health services as mandated such as Access Centers, intensive residential services and Assertive Community Treatment, or ACT, teams.

Beginning April 1, she said Scott County also will launch a new mobile crisis team, peer drop-in center and a new five-bed residential crisis stabilization center operated by Vera French. Another new service will be a "bridge prescriber" program that would allow a patient to see a telehealth professional to receive a 30- or 60-day prescription until they can see their local medical provider. 

"All of our services have improved significantly, but it's all done at a cost," Elam said.

Elam said the legislature needs to consider increasing the $30.78 levy cap, which is based on a formula using the expenditures in fiscal 2015 — a year after the region began and before the launch of many of its new services.

She said the situation is making it difficult to sustain and begin new services. "Our providers are hesitant to start something new if they don't think there is going to be long-term funding," she told supervisors.

Farmer said Scott County's mental health budget includes $1.2 million in transfer dollars to the region's fund balance for the county's portion of the region-wide crisis services and administrative costs.

He added all five counties are budgeting transfer dollars because "the region's budget does not work unless it gets the influx of funds into its fund balance." 

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