The American Rescue Plan gives Georgia leaders a key opportunity to bring bold change to our state and put people first. With the state government now set to receive $4.7 billion in federal relief funds, this is a crucial moment to support communities statewide that have been harmed by the pandemic.
Amid COVID-19, Georgia has seen unprecedented levels of unemployment claims, high demand for safety net assistance, increased food insecurity and more. The state cut funding for school systems, child care centers, programs that support families with low incomes and other key programs last year. Although the federal funding has been recognized in ongoing budget negotiations, it is unclear exactly how these funds will be used.
With $4.7 billion in aid and up to $1.7 billion available in the state’s rainy day fund, Georgia leaders cannot waste this opportunity to end the persistent underfunding of state programs and services. They should support measures that would jumpstart recovery from COVID-19 and advance prosperity indefinitely. That means approving people-first priorities like ensuring our schools and health care programs are adequately funded, providing additional support for students living in poverty, increasing financial aid for college students who cannot afford tuition and finally approving full Medicaid expansion.
Georgia lawmakers have long refused Medicaid expansion, passing up billions of dollars that would provide greater health care access in every county, stabilize rural hospital systems and combat increasing uninsured rates. The American Rescue Plan now makes Medicaid expansion an even better deal for Georgia, as it would provide an additional $1.4 billion to $1.9 billion over the first two years of full expansion that could be used to increase support for mental health services, school counselors and more.
Last year the state approved a partial Medicaid expansion plan known as a “waiver.” Changes at the federal level may make this waiver plan cost far more than expected, and it would still cover fewer Georgians than full expansion. Medicaid expansion is both the healthy and fiscally responsible choice for our state.
The American Rescue Plan also includes several provisions that Georgia lawmakers should not ignore. One provision dictates that states cannot enact tax cuts using this federal relief, a critical measure to ensure that dollars are flowing to communities and Georgians who need it. Unfortunately, Georgia lawmakers have passed or are still considering several tax measures that could put these vital funds at risk.
Lawmakers should take advantage of the fact that the American Rescue Plan allows the state to use incoming federal aid to send direct payments to Georgians. By passing House Bill 593, which raises the standard deduction for tax filers and provides a maximum benefit of $63 to married couples, they have shown a willingness to put money back in the pockets of working families. However, this measure will likely require Georgia to return to the federal government up to $199 million over the next two fiscal years. To deliver more meaningful results for Georgia families, payments modeled after the federal Earned Income Tax Credit could give an income boost of up to $500 to 3.5 million Georgians, including the families of two million children without risking federal funds.
Lawmakers must also keep in mind that federal funding can’t jumpstart recovery on its own. The truth is, Georgia was not adequately investing in our people before the pandemic. This funding is meant to be a temporary measure to deliver relief, but long-term recovery will require more funds generated by increasing state revenues, such as lifting the tobacco tax or evaluating and them trimming back those special-interest tax breaks that do not deliver on their promise.
The American Rescue Plan is designed to deliver immediate relief and support communities that are struggling in the wake of COVID-19. Georgia lawmakers must maximize the potential of this plan and invest these relief funds in people-first solutions to ensure we not only recover but also thrive as we emerge from this pandemic.