The American Rescue Plan: Implementing Federal Relief and Ensuring a Just Recovery in Mississippi    

by Kyra Roby

The American Rescue Plan is providing Mississippi with a historic opportunity: State and local lawmakers can use this substantial federal aid to invest in a just economic recovery that could leave us all with a better economy and stronger communities. To ensure continued recovery efforts leave our communities better off than they were before, state and local lawmakers should think strategically about how to set up and sustain long-term change from these one-time investments.

Altogether, the American Rescue Plan provides Mississippi an estimated $6 billion in federal coronavirus relief and aid. Along with stimulus payments, tax credits for children, nutrition assistance, housing assistance, money for agriculture, money for healthcare, enhanced unemployment benefits, and other resources, the $1.9 trillion American Rescue Plan provides $350 billion to states, local governments, and tribal nations across the county. The estimated $6 billion set aside for Mississippi includes nearly $3 billion for state and local government, $1.6 billion for K-12 education, $429 million for colleges and universities, and $166 million for capital improvement projects.

First, when coupled with the incoming federal dollars, strong public investments in the services communities rely on, such as education and healthcare, are essential for Mississippi to respond to the current crisis and help state communities and the economy thrive. For instance, the American Rescue Plan provides a sizeable amount of aid for K-12 education and higher education.  State and local lawmakers can use the aid to address the state’s “digital divide,” support distance learning, assist with the implementation of public health and safety measures, and fund school nurses and mental health counselors.

But after years of underinvestment in the state’s education system, state and local lawmakers should also use this opportunity to invest in good-quality childcare and early education, fully fund education and invest in higher education in order to build opportunity for all children and promote equity across the state. It is past time to realize that schools are not just places where students go to class. They play vital roles in student health, nutrition, and safety―before, during, and after the school day.

Greater investment is also needed in public health. The American Rescue Plan increases Affordable Care Act (“ACA”) premium tax credits, expands the state option to cover COVID-19 testing for people who are uninsured, gives states the option to extend postpartum coverage to people receiving Medicaid pregnancy coverage for 12 months, and provides a 10-percentage-point increase in the federal share of states’ spending on home-and community-based services.

The American Rescue Plan also offers a strong incentive for Mississippi―one of the 14 states that have not yet implemented the ACA’s Medicaid expansion―to expand Medicaid. According to the Urban Institute, Medicaid expansion could provide affordable healthcare to approximately 207,000 Mississippians, the majority of whom are Black, Hispanic, and other people of color. The Medicaid expansion incentive provided in the American Rescue Plan increases the amount the federal government pays towards a state’s Medicaid expenditures from 90 percent of the cost of coverage to 95 percentage points for two years after a state expands. Altogether, if Mississippi were to expand Medicaid, the state would receive an additional $890 million in federal funding, according to the Center on Budget Policy and Priorities. As with education, after years of underinvestment in healthcare, lawmakers have as great an opportunity as ever to use federal resources to invest in the success of these services.

In addition to these needed investments, state and local lawmakers should target relief aid to those most in need, including essential workers, communities of color, people experiencing homelessness, households with low incomes, and others most affected by COVID-19 and the economic crisis. Lawmakers should supplement federal assistance by implementing a state-earned income tax credit and child tax credit. They should also provide additional support such as income assistance, housing assistance, and food assistance. Additionally, they should reform unemployment insurance, implement a state minimum wage, and further invest in workforce development. When lawmakers provide support to communities hardest hit by the pandemic, they help all Mississippians meet their needs and reach their potential.

Third and finally, state and local lawmakers should advance antiracist, equitable policies. Many of the policies that states adopted in the aftermath of the Great Recession worsened long-standing inequities based on race, ethnicity, and income. Lawmakers can use this opportunity to help tribal governments harmed by the pandemic, eliminate criminal legal fees and base fines on the ability to pay, and implement state-level emergency and permanent paid leave policies. Forward-looking, antiracist, equitable tax policies and public investments are essential to aid Mississippi in getting through this crisis, and the next one.

The truth is Mississippi went into the COVID pandemic without the infrastructure and tools we needed. Decades of tax cuts and underinvestment in critical public services resulted in weaker economies and growing inequities. We may not yet be done with COVID, but we can start rebuilding now.

When coupled with the incoming federal stimulus dollars, state lawmakers must make forward-thinking budget decisions, including raising the additional revenues required to make transformative investments of their own that can build on the foundation laid by this one-time federal stimulus.