ATLANTA – Legislative Democrats and advocates for low-income Georgians say the state should spend its windfall from the latest federal COVID-19 relief bill on making a full economic recovery from the coronavirus pandemic.
But Republican leaders say it’s too soon to commit money the state doesn’t have.
“We got a promise, but we ain’t seen a check yet,” said Georgia Rep. Terry England, R-Auburn, chairman of the House Appropriations Committee. “Until you get the cash in the bank, you don’t get too far ahead in thinking what to do with it.”
The $1.9 trillion American Rescue Plan Act President Joe Biden signed into law March 11 includes $350 billion in aid to state and local governments affected by the pandemic. Of that amount, Georgia is due to receive $8.1 billion, with $4.7 billion going to the state and the rest to cities and counties.
With state tax revenues coming in stronger than expected despite the pandemic, the $27.2 billion fiscal 2022 budget the Georgia House of Representatives passed early this month would restore 60% of $2.2 billion in spending cuts the General Assembly imposed at the height of the pandemic last June.
That’s not enough, said Danny Kanso, a senior policy analyst at the Georgia Budget and Policy Institute.
“We’re in a once-in-a-lifetime pandemic,” he said. “We have to take advantage of that federal support and use these funds to [fully] restore those cuts.”
Democrats in the General Assembly say expanding Georgia’s Medicaid program is a particularly pressing need, a step they’ve been advocating for the last decade since Congress enacted the Affordable Care Act (ACA). Only 12 states, including Georgia, have declined to expand Medicaid coverage through the 2010 law.
Rejecting a full Medicaid expansion as too costly to the state, Gov. Brian Kemp instead is pursuing a Medicaid waiver that would cover more Georgians but not as many as a full expansion. The Biden administration has rejected the waiver because it is tied to work requirements, a decision the governor is appealing.
Unlike former President Donald Trump, Biden is a big supporter of the ACA and has sweetened the incentives for Medicaid expansion. The Biden administration has increased the federal match for the program from 57% to 72% for the next two years.
With 10 rural hospitals across Georgia closing their doors during the last decade, the state should take advantage of the new offer, said state Rep. Debbie Buckner, D-Junction City.
“The federal government is giving us another chance to provide health coverage through Medicaid,” she said. “We need to do something to help rural Georgia make sure health care is out there.”
But England said it would be unwise to use the COVID-19 relief money to expand Medicaid.
“You typically don’t want to use one-time funds for recurring expenses,” he said. “You might be good for 2½ years, but what do you do after that?”
Kyle Wingfield, president and CEO of the Georgia Public Policy Foundation, said Kemp and the General Assembly could choose to put the federal money toward a number of non-recurring costs.
Options include expanding rural broadband, paying down the debt to the federal government the state has incurred from the deluge of pandemic-driven unemployment claims or further building up Georgia’s “rainy-day” reserves, he said.
“We want to look at things we can make a single expenditure on, not take this money and put the state in worse fiscal shape down the road,” Wingfield said.
Kanso said the best way the state could bring immediate relief to Georgia families that have suffered financial losses from the pandemic would be to spend the federal money as soon as possible.
“This is an enormous opportunity in a moment of dire need,” he said.
To accomplish that, Kemp would have to raise his revenue estimate for fiscal 2022, and the legislature would have to incorporate that increase into the budget.
But England said he doesn’t see that happening. For one thing, he suspects the state Department of Revenue soon will have to send out a flurry of income tax refunds to Georgians whose unemployment benefits were taxed.
“We’re running $800 million ahead now,” England said. “But there’s a good chance $500 million to $600 million of that will go back out the door.”
Even if the General Assembly doesn’t spend the federal money now, lawmakers could come back early in next winter’s legislative session and add all or part of it to the fiscal 2022 mid-year budget, Wingfield said.
“No one really knows what the rules are yet for this money,” he said. “Let’s wait and see what the rules are before we start making decisions.”