Lawmakers still need to make decisions about how best to spend the $1.8-billion in federal money the legislature will receive as part of the American Rescue Plan Act. Some lawmakers–including Senator Daniel Sparks–believe they need to act now.
“The inflationary issues right now are my biggest concern with all legislation that deals with money,” Sparks told SuperTalk Thursday. “We have $1.8-billion of ARPA money, $900-million of which is in an account for the state of Mississippi. The other $900-million will come in May of 2022 I believe. There’s something people need to understand. First of all, we cannot collect interest on that. The interest that we earn has to be sent back to the federal government. So the money sitting idle is not doing us any good. And if money is sitting in an account, and inflation is going up, and you cannot make interest on it, that money buys less product.”
The money doesn’t have to be appropriated until 2024 and the Senate wants to obligate the funds as soon as possible so that cities and counties can start work on the projects they’ve submitted to legislators. Lt. Governor Delbert Hosemann has expressed concerns about this getting held up in the last couple of weeks in the legislative session.
Back in February, House Speaker Philip Gunn told SuperTalk he didn’t want to spend money until lawmakers give taxpayers some tax relief. “So, I am of the belief that if we can’t get this tax elimination done in the next couple of weeks, then the governor…should call a special session to eliminate the income tax before we spend a dime of any other money.”
The House and Senate remain at odds on phasing out the state income tax, and it’s not looking like a compromise will be reached anytime soon. Both chambers have offered new versions of tax relief legislation, but it’s pretty obvious Speaker Gunn doesn’t think the Senate bill goes far enough.
Rep. Kevin Felsher is confident legislators will work things out. “Failure is not an option. We have a fiduciary responsibility to the citizens of this state to appropriate and allocate that $1.8-billion and I think leadership will do that.”
Mississippi is one of only four states that have yet to allocate substantial amounts of this federal stimulus money.