States Legislators Can Usher In an Antiracist, Equitable Recovery. Here’s How.

When state legislators are finalizing their budgets, they should follow tax and budget policies in line with three principlesfor an equitable and antiracist state response to the COVID-19 pandemic. To help states achieve long-term success and a stronger recovery, lawmakers must:

  1. Target aid to those most vulnerable to the pandemic or economic crises.
  2. Promote short-term and long-term antiracist policies and equitable policies to end economic inequalities experienced by non-dominant groups.
  3. To sustain long-term, transformative investments in Black, brown, Indigenous and low-income communities, as well as those with large immigrant populations, strengthen state revenue systems

U.S. states had $80 billion remaining in Coronavirus State and Local Fiscal Recovery Funds (FRF) as of December 2021. The remaining $80 billion in Coronavirus State Funds and Local Fiscal Recovery Funds (FRF) is available to Territories. These funds were provided under the American Rescue Plan. These three principles should be considered by states when deciding how to spend federal pandemic aid. This will help to alleviate the suffering of communities that have been affected by the pandemic. It also helps to address injustices like racism and poverty. States have the flexibility to determine how to allocate this aid. The way they spend these dollars can help to advance equitable, antiracist policies that promote economic recovery and long-term opportunities to all families and communities.

For example, funds can be used by states and territories, as well as cities or counties that received FRF.

  • Provide housing assistance. FRF can extend rental assistance programs that were originally funded by other sources, such as the Emergency Rental Assistance Program. These programs provide short-term assistance to help people pay for housing and utilities. They can also offer targeted support to those who have additional housing barriers, which could lead to homelessness. This includes people leaving prison or jail, people with substance abuse disorders, people with mental illnesses, and immigrants and their families. FRF can help create and preserve affordable housing in areas where there is limited housing supply.
  • Expand food assistance Black and Latinx households are more likely to experience this, especially if they have children. food hardship. FRF can provide food benefits and meal programs to those who need help now but whom existing programs don’t reach. States that plan well have the ability to use their own funds for these supports to promote long-term economic, racial and ethnic equity.
  • Invest in K-12 extended learning and tutoring. Historical discrimination can make it difficult for students of color or from low-income backgrounds to access educational opportunities. Many of these students lost months worth of learning during the pandemic, which set them back even more. FRF can be used by states to supplement existing initiatives to provide tutoring and extended learning time to students to help them recover what they have lost and to strengthen K-12 education for those who are low-income and children of color.

Some states have used FRF to direct their FRF to the most affected communities by the pandemic. They also used aid to create programs that promote workforce development and human services.

FRF has also been used by states to address racial and ethnic barriers and economic inequalities. This includes investing in programs and policies that support people with lower incomes or underrepresented groups.

  • Montana The company invested $2 million in it Individuals with Disabilities Employment Engagement ProgramTo support individuals with disabilities in obtaining employment and advancement, we expand the capacity of existing workforce programs so that more people can benefit.
  • New York CitySpend $3.7 million on community-driven strategy promote mental health services in parts of the city — often with large numbers of Black, Latinx, Asian, and/or other people of color — that have historically lacked access to these services.
  • Washington StateA new program to address food insecurity and support local farmers and food business owners was allocated $45 million. It procures local food by focusing on Black, Indigenous, and other minorities to distribute to hunger relief groups that serve communities and other marginalized populations.

To overcome racial inequalities, states will need to invest more in historically marginalized communities in the long-term. This will require more revenue that should be raised in ways to further advance equity. White supremacy and structural racism created — and perpetuate — disparities in power, resources, and opportunities, where the wealthiest 10 percent of white households hold nearly two-thirds of the nation’s wealth. Additionally, most state tax systems are upside-down. This means that those with the highest income can pay the least amount of income. Some states have begun updating their systems with new revenues to finance equity-promoting investments and broadening opportunities. Here are some examples:

  • Washington, D.C.Scaled back ineffective tax incentivefor technology companies, and used the savings for a wide range of critical programs like homelessness services or health care for undocumented persons. D.C. also implemented this program. tax increase on high-income residents to fund permanent housing for residents experiencing homelessness, raise salaries for workers in early childhood education, and increase financial assistance for workers with low earnings through D.C.’s earned income tax credit.
  • New York adopted higher income taxesMillionaires. The income tax rates for households earning over $1 million increased to 8.82 percent to 9.65%, to 10.3 percent for households earning between $5 million to $25 million, and 10.9 percent for those who make more than $25 million. New York plans to use this revenue to invest in education, and to create a program for small businesses that have been affected by the pandemic.
  • New MexicoActed a tax increaseThe Affordable Care Act Marketplace subsidies funding is projected to be raised by approximately $110 Million annually by health insurers. New Mexico also approved a new statewide refundable policy. Child Tax CreditThis will provide up to $175 per family to address food insecurity and child poverty.