A longstanding effort by Iowa Senate Republicans to reduce the number of Iowans receiving various forms of public assistance got a quiet boost last week from Governor Kim Reynolds.

For the first time, the governor’s draft human services budget included provisions that would create asset tests for federal food assistance and require the Iowa Department of Human Services to establish a new “eligibility verification system” for Medicaid and several other public assistance programs.

State Senator Jason Schultz has pushed similar legislation for several years running. Each session, Senate Republicans have approved the bills, which died in the House Human Resources Committee (see here and here).

A “DEAD” BILL FINDS NEW LIFE

The governor’s proposed spending bills are an obscure piece of the Iowa legislature’s budgeting process. The House and Senate Appropriations committees never advance those bills, but the drafts signal to the majority party what the governor wants to see in the legislation that will eventually reach her desk.

This year, the governor’s office introduced most of its spending bills in early March. They are linked near the bottom of this page, with numbers beginning SSB.

The last of the governor’s spending proposals, making appropriations for health and human services and veterans programs, appeared on the legislative website much later, on April 13. Senate Study Bill 1266 quickly set off alarm bells because of Division XVI on “public assistance program oversight,” beginning on page 110. It repeats most of the text of Senate File 389, which senators approved along party lines in February. (The Iowa Senate passed a nearly identical proposal in 2020.)

Three parts of the bill would be particularly impactful. First, the state would create a new asset test for the federal Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps). Assets counted toward determining eligibility would include all bank accounts other than retirement accounts, and “personal property excluding personal belongings, household goods, and one vehicle.” That is, if two people living together each owned a car to drive to work, the second car would count toward assets that might exclude someone from benefits.

Second, eligibility for food assistance would be tied to whether a person was cooperating with the Iowa DHS child support recovery unit. The concept is to remove “deadbeat dads” from the rolls, but advocates for vulnerable Iowans have expressed concern that the measure would make more households food insecure. CORRECTION: This portion of Senate File 389 was not included in the governor’s proposed budget.

In addition, DHS would be required by July 1, 2022 to design a new system or contract with a third-party vendor to verify eligibility for programs including SNAP, Medicaid, the Family Investment Program providing financial support for low-income households with children, and the Children’s Health Insurance Program, known in Iowa as HAWK-I.

The House Human Resources Committee did not act on Senate File 389 before the legislature’s second “funnel” deadline early this month. But most of the bill’s provisions (aside from tying food assistance to child support payments) are now in the governor’s budget proposal, as well as the Senate Republican human services appropriations bill (Senate Study Bill 1267), which was introduced on April 15 (see Division XIII starting on page 67). The governor’s and Senate GOP’s budget bills would move the deadline for designing a new verification system or contracting with a third-party vendor from July 2022 to July 2023.

BILL WOULD HURT THOUSANDS OF IOWANS ON PUBLIC ASSISTANCE

Every year, Schultz’s bills arouse a broad coalition of opponents. More than 30 organizations lobbied against Senate File 389, representing medical associations, public health advocates, religious entities, and vulnerable Iowans. The full list is enclosed below as Appendix 1.

In contrast, only four entities lobbied for these changes to public assistance programs. Two are conservative organizations that generally favor reducing government help for the needy: Americans for Prosperity and Iowans for Tax Relief. The other two could potentially profit from a DHS contract: the Opportunity Solutions Project (which has pushed for similar bills in other states) and Equifax.

Andy Conlin, who now lobbies for the Opportunity Solutions Project, was a senior Iowa Senate Republican caucus staff member a few years ago. During the subcommittee hearing on Senate File 389 in February, Conlin yielded his speaking time to the vendor he was representing. That’s an unusual practice, according to State Senator Liz Mathis, the Democrat appointed to that subcommittee.

A fiscal note prepared by the nonpartisan Legislative Services Agency (enclosed below as Appendix 2) estimated that about 1 percent of Iowans receiving benefits would have those canceled if the law went into effect. Those removed from the rolls would include 5,999 Medicaid recipients, 793 people in the Children’s Health Insurance Program, 68 recipients of the Family Improvement Program, and 1,466 Iowans on SNAP.

When the Senate debated this bill in February (video here), Democratic State Senator Rob Hogg offered an amendment to remove the sections on food assistance. He noted that when the chamber approved the same concept in 2020, that was before the COVID-19 pandemic doubled the number of Iowans on food assistance and tripled the number of Iowa children living in households receiving food assistance. He also observed that removing otherwise eligible Iowans from food assistance would save the state zero dollars, because SNAP is fully federally funded.

More important, Hogg noted that advocates for the bill have much “greater ambitions” than reducing the SNAP rolls by 1,466, as the Legislative Services Agency estimated. He quoted someone from the Opportunity Solutions Project as predicting that Iowa enrollment in food assistance would decline by a little more than 50,000. That would be approximately one in six Iowans on SNAP. The way the bill is structured, a third-party vendor would have incentive to maximize savings for the state by removing as many people from benefit programs for any reason.

Speaking in support of Hogg’s amendment, State Senator Sarah Trone Garriott pointed out that asset limits have been shown to discourage eligible people from applying for SNAP. Iowa households with more than one vehicle would be at risk of losing eligibility. The bill would also discourage families from saving for emergencies. Even children’s savings accounts would count toward a household’s total asset limit. “If a family falls on a hard time, are we really going to make them burn through every asset to get temporary help?” Trone Garriott asked, adding, “most people are on SNAP for a short period of time.”

The child support provision would result in taking food assistance away from children because of challenges involving their parents, who may not be current on child support for many reasons, Trone Garriott argued. She also highlighted the economic impact of kicking 50,000 Iowans off SNAP. With monthly benefits averaging around $206, some $10 million each month would not be spent in Iowa grocery stores.

Republican senators voted down Hogg’s amendment on party lines. They did the same with an amendment Mathis offered to let the DHS proceed with plans to acquire an improved verification system through a national clearinghouse. During the Senate debate, Mathis pointed out that the new system will come to Iowa for free via the U.S. Department of Agriculture. She described DHS Director Kelly Garcia as “excellent,” saying she’s addressing any verification issues “in a very strategic way.” In contrast, taking Schultz’s approach would cost the state money for a computer system and for new full-time employees DHS would need to hire, Mathis said.

Mathis told Bleeding Heartland during an April 15 telephone interview that at the subcommittee meeting on Schultz’s bill, a DHS official explained the process the agency was going through to acquire a new verification system, at no cost.

Asked about the governor’s apparent endorsement of this plan to remove Iowans from public assistance, Hogg commented via email that the policy issue boils down to this:

Iowa should not spend state dollars for private, out-of-state contractors to take away food assistance from otherwise eligible Iowans.

Food assistance is good for Iowa’s families, farmers, and community grocery stores, and our economy.

Taking away food assistance during an ongoing public health emergency is cruel.

WHAT HAPPENS NEXT

Senate Republicans will move their health and human services budget bill through the Appropriations Committee and the full Senate, where it will likely pass along party lines. The bill will then go to the House, which could strip out provisions on public assistance program eligibility.

Republican State Representatives Ann Meyer (current chair of the House Human Resources Committee) and Joel Fry (chair of the Human Resources budget subcommittee) have not supported Schultz’s legislation in the past. But that doesn’t guarantee they will hold the line against including such language in the budget for the next fiscal year. House and Senate leaders don’t have consensus yet on the budget, and this public assistance plan could become part of a larger backroom deal. With the governor’s office now on record supporting these changes, the Senate’s bargaining position could be strengthened.

The governor’s spokesperson Pat Garrett did not respond to Bleeding Heartland’s inquiries about how language from Schultz’s bill got into Reynolds’ budget proposal. Did the governor’s staff work with Schultz, or mainly with lobbyists supporting the bill? Did they consult with DHS leaders while drafting this portion of the spending plan?

Staff for DHS have not replied to questions regarding the agency’s stance on Schultz’s proposal and whether Director Garcia has discussed with the governor plans to acquire a new verification system through a national clearinghouse. I’ll update this post as needed if further information becomes available.

UPDATE: The Senate Appropriations Committee approved the bill on April 20, and renumbered it Senate File 606. O.Kay Henderson reported on the hearing for Radio Iowa,

Tom Chapman, director of the Iowa Catholic Conference, told senators the proposed asset limit is very low.

“It also says that households with more than one vehicle would be at risk of losing their eligibility for food stamps,” Chapman said. “Just the fact of owning two cars, especially in rural Iowa, doesn’t mean that people don’t need help to get food.”

In an email newsletter distributed on April 23, Schultz wrote,

The Dept. of Human Services has resisted this change since the beginning. But they aren’t alone. For the last three years the House has refused to consider this language as a stand-alone bill. Our local representatives had nothing to do with this and I expect they support the policy. But this year the governor’s staff reached out to learn more about the proposal and Governor Reynolds liked it. This crucial support helped revive the language and I hope to see this adopted by the end of the session.

The only outside opposition I’m hearing is from progressive activists who either knowingly or unknowingly lie that a private sector company will be able to kick recipients off the program, or fake news in the cities who knowingly or unknowingly repeat the falsehood on radio, print, or tv. Then again, to many progressives, the truth does not matter. Whatever lies it takes to advance their Marxist policies are justified in their minds.

This policy does not place a private company over our Dept. of Human Services. We are telling Iowa DHS to use proven technology and lower the error rate. Iowa Workforce Development already uses vendors to provide this service. So does the Iowa Dept. of Transportation.

Republican State Senator Zach Whiting wrote in his April 23 legislative newsletter, “The prospect of someone arriving at a grocery store with a smartphone and paying for their groceries with the money hardworking Iowans pay in taxes is affront to taxpayers. It is an insult to the people truly in need of public assistance and this policy should easily be supported.” He is apparently not aware that many Iowans receiving food assistance already work full time, and that many low-income people own smartphones. A federal government program subsidizes smartphones for low-income consumers because the devices are essential for many jobs and educational opportunities.

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Appendix 1: Full list of entities that lobbied for or against Senate File 389

Supporting the bill:

• Iowans for Tax Relief
• Opportunity Solutions Project (which has pushed for similar bills in other states)
• Equifax
• Americans for Properity

Against the bill:

• Des Moines Area Religious Council (operates a large central Iowa food pantry)
• Iowa Food Bank Association
• Iowa Coalition Against Domestic Violence
• Iowa Mental Health Advocacy
• Lutheran Services in Iowa
• Iowa Psychological Association
• Iowa Primary Care Association
• Iowa Nurses Association
• Iowa Coalition Against Sexual Assault
• Iowa Behavioral Health Association
• Iowa Association of Rural Health Clinics
• Iowa Association of Area Agencies on Aging
• National Alliance on Mental Illness–Iowa
• Iowa Catholic Conference
• Episcopal Diocese of Iowa
• Iowa Citizens for Community Improvement Action Fund
• CHAIN (Community HIV/AIDS Advocates in Iowa Network)
• Iowa Mental Health Counselors Association
• Epilepsy Foundation Iowa
• Iowa Mental Health Planning Council
• Common Good Iowa
• Blank Children’s Hospital
• American Heart Association
• Iowa ACEs 360
• Iowa Conference of United Methodist Church
• Genesis Health System
• Iowa Community Action Association
• Association of Early Childhood Iowa Area Boards and Advocates
• EveryStep
• Easter Seals Iowa
• Brain Injury Alliance of Iowa
• Iowa Federation of Labor, AFL-CIO

Appendix 2: Fiscal note from the nonpartisan Legislative Services Agency on Senate File 389

Top image: Governor Kim Reynolds and State Senator Jason Schultz.