Capitol Notebook: Iowa lawmakers reach agreement on property taxes

DES MOINES — The amount of increases in property tax revenue that local governments are able to spend would be limited under legislation that is destined to become state law soon.

Republican leaders in the Iowa Senate and House on Monday announced their agreement on property tax legislation. The compromise legislation includes provisions from the separate bills that the two chambers had been advancing.

The legislation advanced Monday through the Senate's committee on tax policy. The bill's manager in the Senate, Sen. Dan Dawson, R-Council Bluffs, said he expected it to be passed out of both chambers of the Iowa Legislature soon, potentially as early as Tuesday.

The compromise bill includes the Senate's proposal to combine myriad city tax levies and to address increases in property assessments and any corresponding increases in property tax revenue to local governments.

The new bill — which is an amended version of the House's bill, House File 718 — also includes the House's proposal to require any votes to approve local bonding be held on general election ballots in November of even numbered years. It would also require transparency measures for taxpayers.

That means the Cedar Rapids Community School District's planned $312 million bond referendum would have to wait until the November 2024 election.

Dawson said the bill is designed to "rebuild the foundation" of Iowa's complicated property tax system.

"We have to start to consolidate levies," Dawson told reporters after the committee meeting on the new bill. "We have to make sure there's some type of soft cap revenue limitation out there, because if not the property taxpayer will always have the worst seat at the table."

New nursing home moratorium

Iowa lawmakers gave final approval Monday to a bill that would place a three-year moratorium on constructing new nursing home facilities in the state.

Many Iowa nursing homes have closed over the course of the pandemic, citing Medicaid reimbursement rates not keeping up with rising costs of business and inflation.

House File 685 also implements a 2.5 percent tax on managed care organization premiums received and taxable. The tax revenue would be deposited into a fund for the Department of Health and Human Services to use as matching funds to access additional federal dollars to support Iowa's Medicaid program, the state-federal program that provides health coverage for hundreds of thousands of low-income Iowans and people with disabilities, including children.

The new tax would be reimbursed to MCOs — the private insurance companies contracted to manage Iowa's Medicaid program — through the capitation rate-setting process. In that process, the state pays a fixed rate periodically to the MCO to cover the predicted cost of health care services for Medicaid recipients.

Once fully implemented, the tax and reimbursement process is expected to provide $103.9 million annually in net premium revenue to the Medicaid program in fiscal year 2026 and beyond.

The legislation also establishes new application requirements when a licensed nursing home facility changes ownership, including information on the operator's financial suitability, regulatory history and ownership structure.

In addition to the moratorium, the bill would require Iowa HHS create a public dashboard showing available nursing home beds and changes to availability by county, as well as quality ratings at care centers.

Four nursing facilities and two assisted living facilities were placed in receivership with the State of Iowa Department of Inspections and Appeals earlier this year after Blue Care Homes LLC notified the department that it would not be able to meet the needs of its residents at the six care facilities.

Disruptive students

Lawmakers also gave final approval to a bill setting guidelines for disciplining disruptive and violent students in public K-12 schools.

House File 604 requires and sets up a process for educators and school districts to report threats and incidents of classroom violence and damage to school property to the State Ombudsman for investigation. The bill requires a teacher to report any threat or assault by a student to a principal or administrator within 24 hours. It also requires the parents or guardians of students involved in the incident to be notified within 24 hours. The Ombudsman is required to maintain secrecy of the identities of the complainants.

School boards and charter schools would be required to adopt policies for different grade level for how the district will discipline disruptive and violent student. Such policies must provide escalating levels of discipline each time the student makes a threat or becomes violent, and allow for the suspension, expulsion, permanent removal from a particular class or placement of a student in an alternative learning environment, including a therapeutic classroom, when appropriate.

Policies must also provide students access to counseling session or mental health care services, when appropriate, which would require prior written consent from the student's parent or guardian.

School districts and charter schools would be required to publish and distribute a student handbook each school year that includes information related to the expectations of students in each grade level, including information related to academics, attendance, discipline, health and safety, and daily schedules.

The bill also requires the Iowa Department of Education to develop and distribute a list of all professional development programs and other training programs in which school district employees are required to participate pursuant to federal or state law.

Regents reporting requirements

A bill headed to Iowa Gov. Kim Reynolds' desk expands the reporting requirements for Iowa's public universities.

House File 135 requires the Iowa Board of Regents to develop and annually publish online:

- The percentage of students who have completed a master's or doctoral degree after completing a baccalaureate degree program

- Median annual income of students 1 year, 5 years, and 10 years after completing a baccalaureate degree program

- Median student loan debt of students with loan debt

- The ratio of debt to annual gross income of students with loan debt

- The amount of student loan payment as a percentage of monthly gross income of students with loan debt

The House voted unanimously to concur with a Senate amendment to the bill.