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Gunn’s Gambit Risks Rescue Act Aid For Hospitals, Jackson Water System, Lt. Gov Warns

a photo of Speaker Gunn looking at Delbert Hosemann
Mississippi Lt. Gov. Delbert Hosemann, left, is warning that House Speaker Philip Gunn, right, is endangering $1.8 billion in American Rescue Act Plan funds by demanding that the Senate agree to eliminate the state income tax before the appropriation of any federal funds. AP Photo/Rogelio V. Solis

“The clock is ticking” on spending federal funds that would provide Mississippi with economic relief, alleviate hospital shortages and repair ailing infrastructure and more, Lt. Gov. Delbert Hosemann warned in an MFP Voices piece today.

Last year, the federal government sent Mississippi $1.8 billion in aid through the American Rescue Plan Act, but the Magnolia State is one of just four states that has not spent a significant amount of those funds.

Earlier this month, Mississippi House Speaker Philip Gunn said he wanted the Senate to join the House’s effort to eliminate the state income tax “before we spend a dime” of the federal ARPA funds, which the Mississippi Free Press reported on March 3.

The Senate, with Hosemann as its president, passed a tax-cut plan in February, but the lieutenant governor has resisted eliminating the income tax completely, citing revenue and funding concerns. The two chamber leaders are both Republicans.

‘The Opportunity Of A Lifetime’

Today, Hosemann said that “failing to appropriate the one-time $1.8 billion in federal American Rescue Plan Act (APRA) funds for infrastructure and recovery projects is not a rational option for our state.” 

“Yet, last week members of the state House of Representatives made public comments hinging the allocation of these one-time dollars on the passage of unrelated legislation. Meanwhile, the citizens and communities who elected us are in limbo, waiting for this critical funding to increase the number of available hospital ICU beds, extend broadband service to rural areas, support child protective services, and boost our economy through workforce development and tourism,” Hosemann said.

Philip Gunn and Tate Reeves stand amid a group of lawmakers
Mississippi Gov. Tate Reeves, right, called a decision by House Speaker Philip Gunn, left, to withhold federal ARPA funds unless the Mississippi Senate agrees to his income tax elimination plan “a smart move.” Photo by Ashton Pittman

“As importantly, our cities, counties, and rural water associations are depending on millions of ARPA funds to rehabilitate our aged water and sewer systems across the state—a healthcare, economic development, and quality of life issue. A water catastrophe which must be addressed looms over Jackson, but serious problems stretch much further than the Capital City.”

He noted that “a dozen water systems in Mississippi have been cited for maximum contaminant levels, the highest-level EPA violation.”

Mississippi Gov. Tate Reeves has praised Gunn’s tactics in threatening to withhold ARPA funds until the Senate agrees to eliminate the income tax.

“Impressive commitment and a smart move,” Reeves tweeted on March 7. “The taxpayers should be the first to benefit when we have this much money. Let’s eliminate the income tax!”

Last week, Mississippi Today reported that House Ways and Means Chairman Trey Lamar echoed Gunn’s threats from earlier in the month, saying the Senate must “get right on this” and “negotiate in good faith” or else ARPA funds could go unspent. Gunn last week called eliminating the income tax “the opportunity of a lifetime” and one “we will never have again in our lifetimes.”

‘Mississippi Does Not Have Time To Wait’

The House passed its income-tax elimination plan in January with support from both Republicans and Democrats. Gunn is the immediate past chairman and current board member of the American Legislative Exchange Council, a conservative organization that provides template legislation to statehouses across the U.S. ALEC has long supported eliminating state income taxes across the country, including in Mississippi

The effort has raised concerns that doing so could eliminate key public funds, such as for education, with potential disastrous results like Kansas experienced when that state repealed its state income tax before reversing course.

Overhead view of OB Curtis Water Plant
“A water catastrophe which must be addressed looms over Jackson, but serious problems stretch much further than the Capital City,” said Mississippi Lt. Gov. Delbert Hosemann. Photo courtesy City of Jackson

Under current law, Mississippi has until Dec. 31, 2024, to spend the ARPA funds. In his statement today, though, Hosemann noted that the U.S. House of Representatives included a provision in a draft appropriation bill this month “to claw back unallocated ARPA funds” before removing it.

“The language was taken out in a later draft but should serve as a cautionary tale not to drag our feet,” Hosemann said.

The lieutenant governor also noted that rising inflation rates mean that, the longer the state waits to appropriate the funds, the more the cost of construction projects rises and the value of the ARPA money decreases. The other states that have yet to appropriate significant amounts of ARPA funds are Idaho, Nebraska and Oklahoma.

“If we wait another year to appropriate ARPA, we have less time to complete the jobs and fewer available contractors, subcontractors and civil engineers. All states will be competing for the same labor pool and we will be the last to start,” Hosemann said. 

“The Senate hit the ground running in January, having already met with stakeholders, held public hearings, and developed an initial ARPA plan before the session started. … Mississippi does not have time to wait.”

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