Gov. Tate Reeves offers his own plan for spending $1.2 billion in federal funds

by Bobby Harrison, Mississippi Today
November 15, 2021

After Gov. Tate Reeves spent portions of a Monday news conference criticizing federal policies that he said are holding back the state, he still announced his proposal to spend $1.2 billion in federal funds in the budget plan he hopes the Legislature will consider during the upcoming 2022 session.

Ahead of the 2022 legislative session, Reeves announced on Monday his proposal on how to spend state funds and his partial recommendation on spending $1.8 billion in federal funds the state is receiving to deal with COVID-19 and its aftermath.

The governor said he would announce additional plans later how to spend the rest of the federal funds, which must be appropriated by the end of 2024.

READ MORE: Our full “Follow the Money” coverage of Mississippi’s federal spending.

As far as the spending of state funds, the governor said because of the strong growth in state revenue he has retooled his plan to eliminate the state income tax to say it could be done in five years opposed to the longer time period he had recommended in the past.

In addition, Reeves included in his budget the commitment he made this summer at the Neshoba County Fair to provide a $1,300 pay raise for teachers during the upcoming fiscal year beginning July 1, followed by two years of $1,000 pay bumps.

“We seek to eliminate tax burdens and make a bold move: to attract high-paying jobs to the state of Mississippi,” Reeves said of his plan.

Reeves proposes spending $1.2 billion of the $1.8 billion in federal American Rescue Plan funds the state is receiving to deal with the COVID-19 pandemic on a litany of items, ranging from:

• $130 million administered by the newly created Office of Workforce Development, commonly known as Accelerate Mississippi, to provide grants to community colleges and senior colleges for training “for the higher-income jobs and careers of the future.”
• $200 million for the further expansion of high-speed internet. This would be in addition to recent broadband expansion efforts the state has made thanks, in part, to past federal COVID-19 relief legislation.
• $300 million to improve 911 access in Mississippi, calling the state’s current system “an embarrassment.”
• $200 million to restore some of the losses the health insurance plan for state workers and teachers absorbed because of COVID-19.
• $5 million presumably for bonuses to recruit to Mississippi law enforcement personnel who Reeves said has been “mistreated” in “blue” or Democratic jurisdictions.
• $200 million to further replenish the state’s unemployment trust fund. During 2020 when the state shutdown during the start of the pandemic, a record number of Mississippi workers were able to draw unemployment compensation, reducing the size of the trust fund. Under federal law, Reeves has said a tax will be imposed on Mississippi businesses to replenish the fund if other sources of revenue are not used for that effort.
• $50 million for downtown Jackson revitalizing efforts.
• $100 million for water and sewer grant projects in local municipalities. This would presumably be used to match local efforts to improve water and sewer with the separate American Rescue Plan funds they received.

When it was pointed out to the governor that officials for the city of Jackson have said repairs for their antiquated water and sewer system could cost as much as $2 billion, Reeves did not seem to rule out the possibility of using some of the additional American Rescue Plan funds for such an effort in Jackson and other cities. But he said the city of Jackson and the county of Hinds, which is where the capital city is located, have about $85 million in American Rescue Plan funds that also could be used for water and sewer issues.

The governor did not mention or commit any American Rescue Plan funds for salary supplements to help retain and recruit health care providers, particularly nurses, who have been retiring and leaving the state for better paying jobs in the midst of combatting the coronavirus. Both Lt. Gov. Delbert Hosemann, who presides over the Senate, and House Speaker Philip Gunn have endorsed such a proposal.

Rep. Robert Johnson, D-Natchez, who is the House minority leader, has said some of the American Rescue Plan funds should be used to provide salary supplements for “essential” workers, both those in the public and private sector, including for such jobs as grocery store employees.

“These are people on the front lines whose jobs are becoming increasingly more high pressure involved,” Johnson said.

Reeves called the economic growth and strong revenue collections as the best in state history. He said that growth came despite “to a certain extent some of the policies in Washington.” He later reluctantly acknowledged some of the massive federal spending might have helped spur the state economy as numerous economists have said.

Reeves’ traditional budget plan, excluding the American Rescue Plan, is $6.49 billion or 1.7% less than what the Legislature spent in the 2021 session for education, law enforcement, health care and other areas.

Part of that reduction would be to start the process of eliminating the personal income tax.

“Eliminating the individual income tax will further help us fuel Mississippi’s economic engine for the next 100 years,” Reeves wrote in his budget narrative.

The income tax accounts for about one-third of state general fund revenue.

The governor proposes using a large portion of the revenue growth the state has experienced to speed up the elimination of the state income tax. An analysis by Mississippi Today indicates state revenue growth that could be available during the 2022 session could be as much as $2 billion.

Reeves did not miss the chance to incorporate many of his conservative principles and Republican talking points into his budget. He proposes withholding state funding to school districts that teach critical race theory, which is an effort to explain the impact of racism on the country. He could not cite an example of any school in Mississippi teaching critical race theory.

He also proposed $3 million for the teaching of positive or patriotic American history.

And the governor endorsed a plan that died during the 2020 session to require removing from election voter rolls people who do not respond to a mail-out or have not voted once in the past four years.

The governor did propose more spending in some other areas, such as for math and computer science and for the Department of Corrections.

RULES: How can Mississippi, local governments spend billions in COVID-19 stimulus?

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.