The American Rescue Plan & the Continued Need for State Investments

Arkansas lawmakers must spend relief where it’s most needed

The American Rescue Plan is providing Arkansas with a historic opportunity: State and local lawmakers can use this substantial federal aid to help communities hit hardest by the pandemic and address the long-term inequities that have kept too many people of color, women, and those paid the lowest wages from reaching their potential. To ensure these federal dollars strengthen Arkansas’s families and its economy, lawmakers should:

  1. Target aid to the essential workers, communities of color, households with low incomes, and others most affected by this crisis through investments in expanded TANF benefits, providing more generous unemployment benefits, and by smoothly implementing increased marketplace subsidies as quickly as possible.
  2. Advance long-term equitable policies, like state Earned Income Tax Credits that offset pay and tax inequities, universal access to quality early childhood care and education, expanded postpartum health care coverage, and improved substance abuse services with increased matches for home- and community-based services.
  3. Protect state finances for long-term economic growth and opportunity by closing corporate tax loopholes by implementing a combined-reporting requirement and reversing the recent personal income tax cuts that disproportionately benefited the wealthiest Arkansans.

Robust state investments must be sustained to mitigate the crisis and foster an inclusive recovery

It remains critical for Arkansas lawmakers to enact an equitable budget that strengthens programs that help families make ends meet, businesses reopen, and students return to classrooms. That means Arkansas’s current budget must include investments in early childhood education and care, expanded health care access for children and families, and policies that address our upside-down tax system that taxes the poor more than the rich as a share of their income. When coupled with the incoming federal stimulus dollars, these investments are essential for states to respond to the current crisis and set the stage for a more inclusive recovery.

It will take all of us to rebuild

A just recovery requires everyone to invest in our shared future. Federal lawmakers have already committed to historic investments in our recovery – now it is up to their state counterparts to enact their own investments in a better future. Similarly, essential workers and local businesses have made significant contributions throughout this crisis – now wealthy households and profitable corporations need to pay their fair share.

  • The American Rescue Plan is a significant step in the right direction, but because its provisions are temporary, state lawmakers still have essential roles to play today and in the years ahead. Now more than ever, Arkansas must make investments that strengthen schools in communities of color, repair often-neglected infrastructure, boost opportunity for those struggling to make ends meet, and build an economy that works for everyone.
  • To make transformative, forward-thinking investments, Arkansas lawmakers must ensure that wealthy households and profitable corporations – many of whom gained financially during the COVID-19 recession – pay their fair share. Raising taxes on high incomes, wealth, and highly profitable corporations will allow Arkansans to come together to help the hardest hit communities, especially communities of color.

The status quo won’t cut it – we must rebuild an inclusive economy that benefits all of us

The American Rescue Plan will allow us to address the state’s most pressing needs, but it will not undo the systemic issues and racist policies that made this crisis so much worse for Arkansans of color and Arkansans with low incomes. Barriers to economic stability and health existed before COVID-19 for Black, Brown, Indigenous, and immigrant communities. Arkansas lawmakers cannot rely on the federal government to make up for years of the state’s failure to invest in too many communities. Nor can these temporary federal dollars make up for all the resources drained from our communities to hand out tax cuts and tax breaks to the wealthiest households and most profitable corporations.

We can’t afford to make the same mistakes again

Arkansas has only recently recovered from the Great Recession of more than a decade ago. From that slow and difficult recovery, we learned that the best way to get the economy moving again is not through tax cuts for the wealthy or budget cuts to critical public services – it is through strong public investments in the services communities rely on and the people who are struggling to make ends meet. Raising revenues for investments that keep families in their homes, workers employed, students enrolled in college, and businesses open is like giving gas to the economy’s engine. Arkansas can speed up this recovery and build for our future by investing in and expanding programs that will help families achieve security, stability and healthy community.

Federal relief is already helping. When will Arkansans see their state lawmakers’ impact?

Just four weeks after its passage, the new federal relief package is already showing Arkansans what it looks like when the government invests in everyday people and their communities. Many Arkansans have already received their much-needed stimulus checks, and in the months ahead, more parents will see their children return to affordable child care and better-funded schools; more small business owners will receive the relief needed to reopen; and more people with low incomes will continue to receive assistance with rent and groceries. But because the federal relief provides only a short-term stimulus, Arkansas and local lawmakers must make and sustain their own investments – both as a response to COVID-19 and for the state’s long-term economic health.

Even with stronger than projected revenue, Arkansas must plan for the long term

The American Rescue Plan is a historic and much-needed response to a global pandemic and economic downturn that will shape America’s future for years to come. In the short term, the federal relief will help many Arkansas families recover from months of lost wages and overdue rent. It will help Arkansas’s students catch up and then gain new ground in their classrooms. And it will help Arkansas’s businesses reopen to their returning and new customers.

But this stimulus will run out, leaving the effects of the tax and budget choices that we make today in full view. Arkansas lawmakers cannot rely on federal relief alone to respond to this crisis. They must make their own long-term investments in our communities and infrastructure to ensure everyone – Black, Brown, and Indigenous people; immigrants; and others – recovers from this crisis together. What’s more, federal aid will help us out of the crisis, but it can’t reverse the harm done to our families and communities from decades of underinvestment in critical public services like early child care schools, health care, and higher education.

It’s time for Arkansas to invest in our hardest-hit communities

The American Rescue Plan was designed with guardrails that ensure states are investing the federal dollars in the families, businesses, communities, and infrastructure most impacted by the COVID-19 crisis. The federal law does not prevent Arkansas lawmakers from using our state dollars to pay for tax cuts; they’d merely have to return the equivalent amount of federal aid. Regardless, lawmakers who choose to cut taxes for the wealthy instead of making investments in our hardest-hit communities are not prioritizing our state’s recovery. Tax cuts for the few will require everyone else to pay more – especially those with the lowest incomes – and take away funding from critical public services like education and public health, despite their importance to Arkansas’s health and the economic recovery.