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No immediate savings in MHDD reform, DHS head warns

Steve Gravelle – The Gazette, Cedar Rapids, Iowa –

Even as the state moves away from a county-based system of providing services to mentally handicapped and developmentally disabled (MHDD) Iowans, it’s going to need counties’ participation, especially financially, Department of Human Services Director Chuck Palmer said today.

“It’s all about services to people, and we need to start there,” Palmer told about 100 people at a forum at Johnson County Human Services.

“Now is not the time” to cut counties’ MHDD budgets, Palmer said. “Let’s get this system up and running, let’s get it stablized.”

After months of planning and development, Palmer introduced a bill Thursday to answer legislation passed last year requiring the changes. He said some legislators assumed the changes will allow counties to drop their share – about $125 million statewide – of the system’s cost.

“We’re not at a point in time where we can afford not to have those dollars in the system,” Palmer said. “You’ve already got an underfunded system.”

Palmer said savings will come in the future, as a more efficient system does a better job at controlling costs. But the reform effort, including a shift from county departments to regionally-organized administration, will cost every bit of the present $1.3 billion a year – about 76 percent of it from the federal Medicaid program.

Like many counties, Linn levies the maximum – $8 million – allowed for MHDD services under a formula dating to 1997.

Losing the county money would cause “a huge hole,” Palmer said. “There’s no doubt there’s a lot of interest in property tax reform, (especially) on the commercial side. In this arena (MHDD), I don’t see that right now.”

But keeping that money in the system will require reversing what state lawmakers did last year when they passed legislation ending counties’ ability to levy for MHDD services on July 1, 2013.

“I think we went to far,” said state Sen. Joe Bolkcom, D-Iowa City.

The levy-ending legislation was an attempt to kick-start MHDD reform, Bolkcom said. It was rolled into a major end-of-session tax package that passed the Senate 49-0 and the House 97-0.

Bolkcom said legislative leaders recognize the importance of reversing course. If they don’t, county supervisors a year from now will be trying to write their budget for the 2014 fiscal year without the ability to levy for MHDD services.

“That’ll be chaos,” he said.

Instead of immediate savings, reform’s goal should be to provide services consistently across the state. Residents of larger urban counties – Linn and Johnson, for example – now have access to services unavailable in smaller rural counties, Palmer said.

“But don’t take away the services in the counties that have them,” he said.

It’s likely to be a politically sensitive process that will require counties’ support. The current system “has been built on the hard work of 99 counties,” Palmer said.

“I think we can get there inside our halls of the Legislature,” Senate Majority Leader Mike Gronstal, D-Council Bluffs, said Thursday. Getting the buy-in at the local level, that’s the challenge….the hurdle is connecting state government with local governments, and they have to be part of that discussion.”

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