The American bailout is an important opportunity for the leaders of Georgia to courageously change our state and put the people first. Given the state government is now set to receive $ 4.7 billion in federal aid, this is a pivotal moment to support communities across the state that have been hurt by the pandemic.
In the midst of COVID-19, Georgia has seen unprecedented jobless claims, high demand for safety net help, increased food insecurity and much more. The state last year cut funding for school systems, daycare, programs to support low-income families, and other key programs. Although the federal funds have been recognized in ongoing budget negotiations, it is unclear exactly how those funds will be used.
With $ 4.7 billion in relief supplies and up to $ 1.7 billion available in the state’s Rainy Day Fund, Georgia leaders cannot miss this opportunity to address ongoing underfunding of government programs and terminate services. You should support measures that will accelerate the recovery from COVID-19 and promote prosperity indefinitely. This means approving people’s priorities like ensuring adequate funding for our schools and health programs, providing additional support for students living in poverty, increasing financial support for students who cannot afford tuition, and finally, full expansion Approved by Medicaid.
Georgian lawmakers have long opposed Medicaid’s expansion, spending billions of dollars that would enable better access to health care in every county, stabilize rural hospital systems, and combat rising uninsured rates. The US bailout now makes Medicaid’s expansion for Georgia even better business as it would allocate an additional $ 1.4 billion to $ 1.9 billion to support mental health services, school counselors in the first two years of full expansion and more to increase.
Last year the state approved a partial plan for Medicaid’s expansion known as a “waiver.” Changes at the federal level can result in this waiver plan costing far more than expected, and it would still cover fewer Georgians than the full expansion. Medicaid’s expansion is both the healthy and fiscally responsible choice for our state.
The American bailout plan also contains several provisions that Georgian lawmakers should not ignore. A provision stipulates that states cannot take tax cuts with this federal relief, an important measure to ensure that dollars flow to communities and Georgians who need them. Unfortunately, Georgian lawmakers have passed or are considering several tax measures that could jeopardize these vital resources.
Legislators should take advantage of the fact that the American bailout plan allows the state to use incoming federal aid to send direct payments to Georgians. With the passage of House Bill 593, which increases the standard allowance for taxpayers and gives married couples a maximum benefit of $ 63, they have shown their willingness to put money back in the pockets of working families. However, that move will likely require Georgia to return up to $ 199 million to the federal government over the next two fiscal years. To produce more meaningful results for families in Georgia, payments modeled on the federal Earned Income Tax Credit could lead to an income boost of up to 500-3.5 million Georgians, including families of two million children, without the risk of federal funds enter into.
Legislators must also keep in mind that federal funding cannot accelerate the recovery on its own. The truth is, Georgia did not invest adequately in our people before the pandemic. This funding is intended to be a temporary measure to provide relief. Long-term recovery, however, will require more funds, generated by increasing government revenues such as tobacco tax hikes or valuation, and cutting tax breaks on special interest rates that are not paid on their pledges.
The American rescue plan is designed to provide immediate relief and support communities struggling after COVID-19. Georgian lawmakers need to maximize the potential of this plan and put that aid money into people-first solutions to ensure that we not only recover but also thrive as we emerge from this pandemic.
Taifa Smith Butler is the CEO and President of the Georgia Budget and Policy Institute.