Issue: Tax Reform

Funding boosts bring opportunity to invest in Alabama’s future

By Carol Gundlach

Alabama’s broken tax system usually starves our state of money to fund basic responsibilities adequately. But 2022 may be different. Record tax revenues and a surge of federal recovery dollars could allow lawmakers to address longstanding state needs and inequities – if they have the political courage.

State revenues that pay for our schools, including income taxes earmarked for teacher salaries, went up 16% in 2021, according to the Legislative Services Agency. Internet sales taxes and other revenues for non-education programs grew more than 11% in 2021. Alabama also has received federal funds under the American Rescue Plan Act (ARPA) to aid recovery from the COVID-19 recession. Alabama has $580 million remaining in 2021 ARPA funds, plus another $1.06 billion coming in 2022.

Coming fast behind ARPA are federal infrastructure dollars for roads, bridges and public transportation. And if the U.S. Senate passes it, the Build Back Better Act will include new funds for child care, health care and senior services.

Transformative changes for a better Alabama

Legislators already have begun talking about how to spend this money. Alabama Arise believes wise use of these funds can make Alabama a better place for generations to come. Many of our recommendations are in our statement of principles for spending recovery dollars. A few key Arise recommendations include:

  • Untax groceries. Tax cuts should help struggling Alabamians who already pay a disproportionate share of state taxes. Ending the state grocery tax is a good place to start.
  • Expand Medicaid. Federal recovery dollars can help free up state money for Medicaid expansion. This would save hundreds of lives and ensure affordable health coverage for more than 340,000 Alabamians every year.
  • Make the criminal justice system more just. Legislators just made a misguided decision to spend $400 million of ARPA money on new prison construction. They now should invest in meaningful policy changes like sentencing reform and other alternatives to incarceration.

Alabama lawmakers have a chance to make far-reaching and lasting changes in 2022. Arise and our members will work hard to ensure they seize this opportunity.

Good news for Alabama families: The expanded Child Tax Credit is here!

By Robyn Hyden

Monthly payments from the newly enhanced federal Child Tax Credit begin today, marking a historic breakthrough in fighting child poverty. The payments are part of the American Rescue Plan Act (ARPA), which will help reduce child poverty in the United States by more than 40%.

Child Tax Credit payments are coming to help! $300 per month for kids under 6. $250 per month for kids 6-17.

How does the expanded credit work?

ARPA boosted the maximum Child Tax Credit from $2,000 per child to $3,000 per child. It also increased the maximum for children under age 6 to $3,600 per child. And ARPA made the credit fully refundable. This means families will receive the full value of the tax credit even if they have little or no income.

About 94% of Alabama’s children ‒ more than 1 million kids across the state ‒ will benefit from improvements to the credit. By default, most households will receive half of the money in the form of monthly payments from July through December. Those payments will be up to $250 per child, or up to $300 per child under age 6.

Families will receive the other half of the money in a lump sum after filing 2021 income taxes next year. If households choose to opt out of monthly payments, they can receive a single lump-sum payment after filing 2021 taxes.

The expanded credit is a great start to boost economic security for Alabama families, but the improvements are only temporary. The expansion is due to expire next year unless Congress agrees to renew it. That’s why lawmakers urgently need to expand the credit permanently in the next federal COVID-19 relief plan.

What do you need to do to sign up for the expanded credit?

  • Most families are already signed up for Child Tax Credit payments. If you’ve filed tax returns for 2019 or 2020, or if you signed up with the Non-Filer tool last year to receive a stimulus check from the Internal Revenue Service, you will get the monthly Child Tax Credit payments automatically. You do not need to sign up or take any further action.
  • If you aren’t already signed up, you still can do so by clicking here. Even better, if you haven’t yet received any stimulus payments for which you are eligible, you can get those by signing up as well. Note: These payments do not count as income. Signing up won’t affect your eligibility for other federal benefits like the Supplemental Nutrition Assistance Program (SNAP) or WIC.
  • To opt out of monthly payments and get your refund as a lump sum after filing 2021 taxes, click here.

Who is eligible for the expanded credit?

ARPA increased the maximum Child Tax Credit from $2,000 per child to $3,000 per child for most kids. The maximum credit increased from $2,000 to $3,600 for children under age 6. The credit also now covers 17-year-olds.

All families will get the full credit if they make up to $150,000 a year for a couple or $112,500 a year for a family with a single head of household. Couples who make up to $440,000 a year or heads of household who make up to $240,000 are eligible for partial credits.

How can you help spread the word?

Make sure your family, friends and neighbors know about the expanded Child Tax Credit! You can send them this helpful two-minute video, courtesy of the Economic Security Project and the Groundwork Collaborative.

You also can share this flyer, courtesy of the Coalition on Human Needs, with people who may not have filed a federal income tax return recently because they did not make enough to owe income taxes.

42 Alabama groups urge Ivey to drive transformative change with federal COVID-19 relief funds

By Chris Sanders

To strengthen the common good: Six principles for allocating Alabama's American Rescue Plan Act funding

Alabama should build a more equitable and inclusive future by using federal COVID-19 relief money for transformational investments in public health and economic opportunity, according to a letter that 42 churches and organizations across the state sent to Gov. Kay Ivey this week. Alabama Arise is among the groups that co-signed the letter.

The American Rescue Plan Act (ARPA) will provide Alabama $2.3 billion of federal assistance for education and other vital services. Local governments across the state will receive another $1.7 billion.

Affordable housing, education, nutrition and public transportation are a few key areas of need identified in the letter. The letter urges Alabama to use ARPA funds to expand Medicaid, increase broadband internet access in underserved areas and increase funding for child care, early childhood education and mental health care, among other investments.

“New funding at this scale can be transformative for our state, but only if we take a transformative approach to how we spend it,” the letter says. “For too long, Alabama’s leaders … have settled for poor outcomes in health, education, community development and other measures of shared prosperity, because they thought we couldn’t tackle such deep problems. The pandemic is challenging us to reclaim – and redefine – the common good. ARPA funding gives us a rare opportunity to meet the challenge, if we’re willing.”

The full letter, “To Strengthen the Common Good: Six Principles for Allocating Alabama’s ARPA Funding,” is available here.

Principles for effective, transparent use of ARPA money

COVID-19 and its associated recession exacerbated preexisting racial, gender and regional disparities that prevent Alabama from reaching its full potential. Enduring recovery will require breaking away from a mindset of scarce resources and limited opportunities, the letter says.

The letter encourages state leaders to allocate ARPA funds using these six principles as a framework:

  1. Engage local communities at every step.
  2. Aim for equity in outcomes.
  3. Maximize well-being by addressing health in all policies.
  4. Invest in existing assets and capacities to help funds work faster, go further and avoid duplication.
  5. Think big and create a 21st-century infrastructure for the common good.
  6. Build public trust and engagement by following the highest standards of documentation, transparency and accessibility of information about funding awards and expenditures.

Investments to increase equity, expand economic opportunity in Alabama

ARPA funds offer the state an opportunity to lift communities toward better health and broadly shared prosperity. They also can help Alabama address chronic challenges in education, health care, housing and other quality-of-life measures. Among the letter’s key recommendations for allocation of ARPA funds:

  • Expand Medicaid to save lives and ensure health coverage for more than 340,000 Alabamians with low incomes.
  • Invest in mobile mental health crisis services and expand mental health crisis centers and school-based mental health services.
  • Increase funding for in-home early childhood education and in-home services for older adults and people with disabilities.
  • Provide funding for the state’s Housing Trust Fund and Public Transportation Trust Fund.
  • Promote equity in high-speed internet access by targeting earmarked broadband funding to help providers expand into underserved areas.
  • Invest in workforce development by creating subsidized apprenticeships, two-year scholarship programs and subsidized certificate programs for workers with low incomes.
  • Provide a grocery tax rebate and other cash assistance to households with low incomes.

“Recovery from COVID-19 will require Alabama to go beyond a return to an inadequate status quo,” Alabama Arise executive director Robyn Hyden said. “Our elected officials must make better policy choices now to build thriving communities in the future, and ARPA funds offer a powerful pathway to help make that vision a reality. We urge the governor to seize this opportunity to increase public trust and build a brighter, more equitable future for all Alabamians.”

To strengthen the common good: Six principles for allocating Alabama’s ARPA funding

By Alabama Arise

To strengthen the common good: Six principles for allocating Alabama's American Rescue Plan Act funding

Introduction

Dear Governor Ivey,

One of the darkest years in recent memory has put Alabama’s families, communities, health system, businesses – and our leaders at all levels – to the test. Thank you for all your efforts to keep Alabamians safe and secure during this unprecedented emergency. Now that a post-COVID world is dawning, the leadership test doesn’t end. Rather, it enters a critical new phase: Your vision and your actions will help determine what a post-COVID Alabama looks like, and history will record the results. Will the comfort of the familiar pull us back into “the way we’ve always done things”? Or will we count this ordeal as an awakening to bold new possibilities for our state?

For the organizations listed below, all signs point to the second option: The opportunity to address chronic problems that the pandemic has only worsened; a chance to inspire Alabamians with a recovery plan that lifts all communities toward a healthier, more prosperous future; and – most pragmatically – the power of $4 billion in new federal funding to turn vision into reality. We enclose for your consideration six principles that we believe can guide state and local leaders in the most productive, equitable and lasting use of these tax dollars.

The signers of this letter are advocates who work closely with the communities hit hardest by the COVID-19 health and economic crises. For these Alabamians, recovery from the pandemic must mean more than restoring the pre-COVID status quo. With courageous and creative leadership, community engagement across the state, and wise use of historic levels of funding, we have what we need to move Alabama forward and strengthen the common good.

We stand ready to answer any questions you may have about our recommendations.

Respectfully submitted,

The Undersigned Alabama Organizations

Signatories

The following organizations support a principled approach to American Rescue Plan Act funding that will strengthen Alabama’s common good:

ADAP
AIDS Alabama
Alabama Appleseed Center for Law and Justice
Alabama Arise
Alabama Coalition for Immigrant Justice
Alabama CURE
Alabama Possible
Alabama Solutions
Alabama State Conference of the NAACP
Bay Area Women Coalition, Inc.
Birmingham Society of Friends
BirthWell Partners Community Doula Project, Birmingham
Church & Society, Anniston First United Methodist Church
Community Enabler Developer, Inc.
Disabilities Leadership Coalition of Alabama
Disability Rights & Resources
The E.WE Foundation
Faith and Works Statewide Civic Engagement Collective
Grace Presbyterian Church (PCUSA), Tuscaloosa
Greater Birmingham Ministries
Hispanic Interest Coalition of Alabama
Hometown Action
Immanuel Presbyterian Church (PCUSA), Montgomery
Jobs to Move America
League of Women Voters of Alabama
Medical Advocacy & Outreach
The Nightingale Clinic, Birmingham
Nurse Practitioner Alliance of Alabama
Open Table United Church of Christ, Mobile
People First of Alabama
Project Hope to Abolish the Death Penalty
Restorative Strategies, LLC, Birmingham
Sisters of Mercy
Sisters of St. Joseph
The Sisters, Tuscaloosa
St. Luke’s Episcopal Church, Jacksonville
Unitarian Universalist Fellowship of Mobile
University of Montevallo Social Work Program
Volunteers of America Southeast
West Alabama Women’s Center
YMCA of Birmingham
YWCA of Central Alabama

Letter text

To Strengthen the Common Good: Six Principles for Allocating Alabama’s American Rescue Plan Act Funding

The COVID-19 crisis has created enormous new challenges for Alabama, while shining a harsh light on long-neglected ones. To strengthen and expedite recovery, the American Rescue Plan Act (ARPA), passed by Congress in March 2021, is pumping $4 billion into Alabama’s economy over the next three years. New funding at this scale can be transformative for our state, but only if we take a transformative approach to how we spend it.

The starting point is recognizing and breaking our old mindset of scarce resources, limited possibilities and patchwork policy solutions. For too long, Alabama’s leaders – and the voters who empower them – have settled for poor outcomes in health, education, community development and other measures of shared prosperity, because they thought we couldn’t tackle such deep problems. The pandemic is challenging us to reclaim – and redefine – the common good. ARPA funding gives us a rare opportunity to meet the challenge, if we’re willing. The undersigned organizations offer the following six principles as a framework for seizing this unprecedented opportunity to build a better Alabama for all.

  1. Engage local communities at every step.

    The COVID pandemic has hit people where they live, work, learn and play. The best use of ARPA funds will reflect the needs and goals identified by ordinary Alabamians through a process that solicits, accommodates and heeds public input.

Crucial question

How are local leaders, advocates and community members involved in identifying and prioritizing both needs and solutions?

Recommendations
  • Identify or create effective, inclusive, results-oriented, nonpartisan, community-based councils in each county or region to develop recommendations for local ARPA funding priorities. Potential lead organizations may include United Way, community foundation or Community Action Agency advisory bodies; children’s policy councils; university extension services; or community round tables convened by local governments. Make it a priority to engage segments of the community underserved by the status quo, such as Alabamians of color, people who work for low wages or have lost jobs, and those who lack adequate basic services.
  • Provide opportunities for broad public participation in developing and finalizing local, regional and state ARPA spending plans. State leaders should agree not to appropriate ARPA funds until the public engagement process is completed.
  • Review existing community and state needs assessments to identify common local concerns, as well as gaps in information and perspective.
  • Facilitate information-sharing and coordination among local, regional and state efforts to enhance efficiency, leverage capacity and avoid duplication.
  • Designate a statewide source of technical assistance, best practices and other aids to local and regional decision-making.

  1. Aim for equity in outcomes.

    Some regions, counties, municipalities and populations have suffered deeper blows than others from the pandemic because of chronic gaps in resources, infrastructure, services and opportunities. Rural Alabamians, people of color, people with disabilities, and women have faced disproportionate impacts from both the health and economic crises. Simply restoring the prior status quo is not transformation. ARPA funding decisions should take into account the un-level playing field of COVID recovery, targeting investment toward improving the basic standards of living for areas and people long left behind. Assistance to those most deeply impacted by COVID-19 should come with as little “red tape” and administrative delay as possible. Direct cash assistance to people with low incomes should be a priority.

Crucial question

How do proposed funding allocations contribute to the removal of historic barriers to individual, family and community well-being?

Recommendations
  • Within each jurisdiction (state, region, county, city), use socioeconomic indicators such as poverty, unemployment and workforce participation rates, and racial/ethnic health disparities to target strategic, expedited community investments.
  • Provide grants to minority- or women-owned small businesses, especially those that did not receive earlier federal business loan assistance.
  • Provide up to $13 per hour in bonus or “premium” pay – on top of their regular pay – to essential public and private workers, up to $25,000 per worker per year, as allowed under the Rescue Plan, for work performed during the public health emergency, awarding the largest bonuses to the lowest-paid workers.
  • Provide cash assistance to SNAP food assistance recipients with incomes below 50% of the Federal Poverty Level.
  • Provide a grocery tax rebate to households earning less than 200% of the federal poverty level.
  • Fund and train organizations that already help people access SNAP, Medicaid, tax credits and other supports as navigators for the full range of ARPA assistance, including the expanded federal Child Tax Credit.

  1. Maximize well-being by addressing health in all policies.

    What began as the COVID-19 health emergency quickly became an economic and social crisis. In turn, the toll the virus has taken on communities of color, people with disabilities and the uninsured revealed how deeply socioeconomic conditions are connected to health risks and outcomes. Nutrition, housing, transportation, education and other factors are widely recognized as social determinants of health, but Alabama has been slow to broaden our approach to health policy and funding. ARPA offers us the chance to apply the lessons of COVID-19 and design a recovery plan that puts eliminating health disparities and improving health at the center of investments in every sector.

Crucial question

How does this funding proposal advance the goal of a healthier Alabama?

Recommendations
  • Name it and claim it: There’s enough ARPA funding to achieve significant health improvement in Alabama if leaders set clear, ambitious goals and plan accordingly. 
  • Engage public health experts to incorporate health goals and strategies across the full span of ARPA allocation planning.
  • Increase professional staffing at county health departments.
  • Strengthen our workforce, families and communities by using the generous ARPA incentives (an estimated $720 million) to expand Medicaid and close the coverage gap for 340,000 Alabamians with low incomes.
  • Invest in mobile mental health crisis services and expand mental health crisis centers.
  • Expand school nurse programs and school-based mental health services.
  • Fund Healthy Food Financing grants for fresh food markets, including mobile markets, as well as local worker-owned food cooperatives to boost local economies, provide jobs and expand availability of fresh foods in food apartheid areas (where healthy food access is hindered by racially discriminatory economic or political factors) and food swamp neighborhoods (where food and beverage sources like fast food outlets, convenience stores and liquor stores crowd out healthier food options).

  1. Invest in existing assets and capacities to help funds work faster, go farther and avoid duplication.

    Over recent decades, budget cuts to education, public health and other essential services – and our failure to expand Medicaid – have left Alabama unprepared for a prolonged emergency like COVID-19. Similarly, charitable nonprofit organizations across the state have faced unprecedented demand for their services during the pandemic and risen to the challenge. By directing ARPA funds to restoring critical services and supporting experienced, trusted charitable nonprofits, state and local governments can strengthen community resources, meet needs efficiently, avoid reinventing the wheel, and multiply the economic benefit.

Crucial question

What programs and organizations are already working to meet the goals of this ARPA funding proposal, and how can a partnership approach improve outcomes?

Recommendations
  • Fund organizations that are well-positioned to reach people with significant barriers to accessing support, such as immigrants, people with disabilities and people of color with low incomes.
  • Expand community schools in neighborhoods where the pandemic has taken a particularly heavy toll.
  • Provide additional funding for existing in-home early childhood education services like HIPPY, Parents as Teachers and Nurse-Family Partnership programs.
  • Increase support for school-based social and health services, particularly in high-poverty neighborhoods and districts.
  • Help children catch up on unfinished learning by expanding the teacher workforce through pay increases and other supports for early childhood teachers, child care workers and special education teachers who work in at-risk communities and schools.
  • Expand existing in-home and community-based services for the elderly and people with disabilities.
  • Expand or develop local alternatives to incarceration such as specialized courts, community correction programs, re-entry programs and services for people at risk of offending.
  • Invest in workforce development by creating subsidized apprenticeships, two-year scholarship programs, and subsidized certificate programs for low-income workers.

  1. Think big and create a 21st-century infrastructure for the common good.

    Alabamians have long recognized the human cost of inferior and outdated public works and services like sanitation, health care, transportation and information technology systems. But the monetary cost has kept our leaders from modernizing them. COVID has revealed the deadly consequences of that neglect, and ARPA includes massive funding aimed at moving states forward on all of these fronts, including a large share for education (not addressed in these recommendations because of specific earmarking). The opportunity calls for bold leadership and vision. Our spending plan must seek to coordinate local, regional and statewide investments for fundamental and long-lasting impact.

Crucial question

How will today’s investments benefit future generations of Alabamians?

Recommendations
  • Modernize and align state agency computer systems to create a “no wrong door” approach to streamlined eligibility and enrollment across benefit programs.
  • Modernize and improve state unemployment insurance (UI) technological infrastructure, application and payment systems.
  • Upgrade water and sanitation systems, prioritizing communities with a history of unsafe water quality and waste-water disposal.
  • Provide critical infrastructure and equipment (such as trucks, refrigeration, trainers, lift gates, etc.,) to local food banks and food pantries to expand emergency food distribution.
  • Expand Alabama’s affordable housing capacity, stabilize families and communities and reduce homelessness by seeding the Affordable Housing Trust Fund with $25 million and providing grants for eligible new construction, renovation and maintenance.
  • Recognizing that lack of reliable transportation is a major hindrance to health care, economic activity and workforce development in many areas of the state, seed the Public Transportation Trust Fund with $20 million and provide state match for increased federal public transportation funding.
  • Promote equity in high-speed internet access by targeting earmarked broadband funding to help local service providers expand into underserved areas and by ensuring community oversight of access and quality standards.
  • Provide state technical assistance to localities in consolidating, evaluating and negotiating broadband contracts to minimize the danger of approving projects with little public benefit.

  1. Build public trust and engagement by following the highest standards of documentation, transparency and accessibility of information about funding awards and expenditures. 

    Spending taxpayer dollars is always a tremendous responsibility. When it comes to spending billions in a short time, the potential for slow uptake, poor decisions and misuse only increases. Alabama can ensure that the generous ARPA funds do their appointed job by establishing clear guidelines and full disclosure for the entire funding process, from eligibility of applicants to allocation decisions to project expenditures and results.

Crucial question

How will Alabamians be able to track the allocation, use and impact of their federal ARPA tax dollars in the state?

Recommendations
  • Create and maintain a public database of state and local ARPA funding allocations and expenditures, easily searchable and sortable by project or partner name, policy topic, service area, grant amount, award date, expenditure date and other key factors.
  • Adopt simple, accessible application and reporting requirements that allow grantees and recipients to establish their credibility and tell their story without jumping unnecessary bureaucratic hurdles.
  • Use local ARPA planning groups as conduits for ongoing reporting and feedback about plan implementation, obstacles, impact and sustainability. Build a robust outreach operation to help people access available federal, state and local aid.

Federal relief funds could transform Alabama’s future

By Carol Gundlach

How often have we gotten to say that it’s raining money in Alabama? That’s the image that comes to mind as the American Rescue Plan Act (ARPA), passed in March, begins to direct more than $4 billion in new federal funds into the state over the next three years.

The funding could help Alabama make historic progress in public health, education, family well-being and community viability if spent wisely and equitably. It also offers generous incentives that would more than offset the state’s initial cost to expand Medicaid. This new COVID-19 relief comes on top of $1.9 billion Alabama got under the CARES Act last year.

The state government will receive more than $2 billion under ARPA. Counties will get nearly $1 billion. Alabama’s 21 largest cities will receive more than $400 million, and other municipalities will get nearly $400 million as well. Both the state and localities may use funds to offset the pandemic’s strains on families, small businesses, public health and infrastructure like water and sewer systems and high-speed broadband networks.

Portions of ARPA money are earmarked for direct payments to local school districts. Other funds are dedicated to provide rental assistance and make child care more affordable and accessible.

The act also temporarily boosts the Child Tax Credit and Earned Income Tax Credit and temporarily increases food aid under the Supplemental Nutrition Assistance Program and WIC. In addition to these supports, ARPA also provides one-time cash payments ($1,400 each for most Americans). And it provides direct assistance for health care, funeral expenses and other essential needs.

Arise will continue to follow these funding streams with the goal of ensuring equitable distribution and transparency. And we will advocate to make the temporary improvements permanent in the next round of federal relief.

American Rescue Plan Act offers path to recovery

By Chris Sanders

As vaccinations continue across Alabama, COVID-19’s viselike grip on our lives is loosening. The pandemic has caused immense physical, emotional and economic suffering, and those aftereffects will not fade quickly. But the American Rescue Plan Act – the federal relief package that President Joe Biden signed March 11 – includes many important policies to begin the healing.

Some of the most crucial investments come in health care. The law increases subsidies for marketplace health coverage under the Affordable Care Act. It also creates new incentives that would more than offset the cost of Medicaid expansion. The incentives would remove Alabama’s last financial barrier to extending coverage to more than 340,000 adults with low incomes.

If Gov. Kay Ivey agrees to expand Medicaid, Alabama would receive between $740 million and $940 million over two years. That would result from a 5-percentage-point federal funding increase for traditional Medicaid coverage.

Alabama State Capitol in Montgomery

“Medicaid expansion is the single biggest step Alabama can take to recover from the pandemic,” Alabama Arise campaign director Jane Adams said.

“Congress did their job. Now it’s time for the governor and state lawmakers to do theirs.”

The act also slashes poverty by boosting unemployment insurance and nutrition assistance benefits and expanding the Child Tax Credit and Earned Income Tax Credit. It funds rental and mortgage assistance to help prevent evictions and foreclosures. And it provides Alabama’s state and local governments with $4 billion of federal assistance to help avoid cuts to education and other vital services.

Persistent disparities – and how to end them

The relief package provides opportunities to begin dismantling longtime structural barriers in Alabama. Arise offers many such policy recommendations in our recent report, The State of Working Alabama 2021, which details how COVID-19 cost hundreds of thousands of Alabamians their jobs and fueled a rapid surge of hunger and hardship across our state.

COVID-19’s toll has been especially heavy for women and people of color, the report finds. The pandemic exacerbated Alabama’s preexisting racial, gender and regional disparities in health care, housing, nutrition and economic opportunity. These inequities – the legacy of bad policy decisions – prevent Alabama from reaching its full potential.

“Alabama’s economic, racial and gender inequities are preventable and reversible,” Arise policy director Jim Carnes said. “By making better policy choices now and in the future, we can chart a path toward a more equitable economy.”

Arise legislative recap: March 19, 2021

By Alabama Arise

As the Alabama Legislature reaches the midpoint of this year’s regular session, Arise’s Celida Soto Garcia brings us up to date with the session so far. Lawmakers sadly have neglected many key needs while advancing numerous bills that would infringe on the civil rights of Alabamians. We need you to speak out for a better Alabama.

Two corrections reflected in the captions: The session will resume on Tuesday, March 30. And HB 285 is sponsored by Rep. Wes Allen.

Arise legislative recap: March 12, 2021

By Alabama Arise

Arise’s Carol Gundlach breaks down the American Rescue Plan and what it means for Alabama families including expansions to the Child Tax Credit and EITC helping to reduce poverty across Alabama.

Federal relief package will reduce Alabamians’ unmet health needs, hunger, housing instability and other hardships

By Chris Sanders

The American Rescue Plan Act of 2021 will reduce poverty while expanding health care, housing and nutrition protections across Alabama, according to analyses by Alabama Arise and other research organizations. President Joe Biden signed the new federal COVID-19 relief package into law Thursday.

The law will slash poverty by expanding tax credits to struggling households and boosting unemployment insurance (UI) benefits. It also will provide Alabama $2.3 billion of federal assistance to help avoid cuts to education and other vital services. Local governments in Alabama will receive another $1.7 billion in federal funding.

Some of the relief package’s most transformative investments will come in health care. The law will increase the affordability of health coverage through the marketplace created under the Affordable Care Act (ACA). And it will create new federal incentives that would more than offset the state’s cost to expand Medicaid, providing health coverage to hundreds of thousands of Alabama adults with low incomes.

“The American Rescue Plan Act throws Alabama’s struggling families a much needed lifeline,” Alabama Arise executive director Robyn Hyden said. “And it offers budgetary breathing room for policymakers to tackle chronic problems, address longstanding racial and gender inequities and build an economy that works for every Alabamian. Medicaid expansion should be at the very top of our legislators’ to-do list.”

A new pathway to Medicaid expansion in Alabama

The relief package could bring overdue peace of mind to some 300,000 Alabamians living in the health coverage gap. They earn too much to qualify for Medicaid under the state’s stringent income limit but too little to qualify for subsidized ACA marketplace plans.

Nearly seven in 10 Alabamians support expanding Medicaid to cover these adults, a statewide poll found last month. If Gov. Kay Ivey agrees to expansion, the law would give the state a 5-percentage-point increase in federal funding for its traditional Medicaid coverage for two years.

That would bring Alabama an additional $940 million over two years, the Center on Budget and Policy Priorities (CBPP) estimates. And it would remove any remaining financial barrier to Medicaid expansion, said Jane Adams, the Cover Alabama campaign director for Alabama Arise.

“This law is a much-needed step toward closing the health coverage gap in Alabama. We have no time to waste,” Adams said. “Tens of thousands of people have died in the South ‒ my home ‒ because they couldn’t afford to get the health care they needed.

“Medicaid expansion is the single biggest step Alabama can take to weather and recover from the COVID-19 pandemic and move our state forward. Congress did their job. Now it is time for Governor Ivey and our state lawmakers to do theirs and immediately expand Medicaid in Alabama.”

Enhancements to existing Medicaid, marketplace coverage

The relief package also makes multiple coverage improvements for tens of millions of Americans with Medicaid or ACA marketplace plans. Among other changes, the law:

  • Reduces or eliminates marketplace premiums through 2022. Subsidies will increase across the board, and no one will pay more than 8.5% of income for their health plan.
  • Eliminates COBRA premiums through September 2021.
  • Protects against tax liability on premium assistance because of income fluctuation.
  • Increases funding for COVID-19 testing and vaccine distribution.
  • Gives Alabama the option to increase the income limit and coverage period for postpartum Medicaid coverage.
  • Increases federal funding for home- and community-based Medicaid long-term care services.
  • Increases federal funding for substance abuse prevention and treatment and a broad spectrum of mental health services.

Child Tax Credit, EITC expansions will reduce poverty across Alabama

Poverty rates will fall nationwide thanks to tax credits and stimulus payments in the American Rescue Plan Act, studies predict. One of the greatest gains will result from a Child Tax Credit (CTC) expansion that could cut the U.S. child poverty rate in half, a Columbia University analysis found.

The relief package makes the full CTC available to children living in families with low or no earnings. It increases the credit’s maximum amount to $3,000 per child and $3,600 for children under age 6. And it extends the credit to 17-year-olds. This CTC expansion will help four in five Alabama children (or nearly 1.1 million), as well as nearly 1 million adults, the Institute on Taxation and Economic Policy (ITEP) estimates.

Direct payments and expanded tax credits will help Alabamians make ends meet as well. Among other changes, the law:

  • Provides a one-time payment of $1,400 per person for individuals making up to $75,000 and couples making up to $150,000. Individuals with incomes up to $80,000 and couples with incomes up to $160,000 are eligible for partial payments. These stimulus payments will benefit 91% of adults (3.1 million) and 92% of children in Alabama, ITEP estimates.
  • Raises the maximum Earned Income Tax Credit (EITC) for working adults without children from roughly $530 to roughly $1,500. The law also increases the income limit for these adults to qualify from about $16,000 to at least $21,000.
  • Expands the age range of EITC-eligible workers without children. Younger adults aged 19-24 who are not full-time students can qualify now, as can people 65 and over.
  • Helps more than 280,000 Alabamians with the EITC improvements mentioned above, CBPP estimates. The vast majority of the Alabamians who will benefit (205,200) have annual incomes below $20,400, according to ITEP.

Boosts to SNAP, unemployment, housing assistance to help Alabamians make ends meet

The American Rescue Plan Act includes additional provisions to keep more households fed and housed. Most urgently, it extends until Sept. 6 the supplemental $300 federal UI benefits that were set to expire this weekend. This extension more than doubles Alabama’s maximum total weekly benefit to $575, or roughly 60% of median household income.

The law also provides $37 billion nationwide in rental and mortgage assistance to help prevent evictions and foreclosures. For Alabama, this would mean an increase of more than 1,400% from 2020 Emergency Solutions Grant funding if states receive funding proportionate to their populations.

In addition, the package continues a 15% boost to food assistance under the Supplemental Nutrition Assistance Program (SNAP) through September. This increase will help nearly 800,000 Alabamians and bring $64 million in additional SNAP benefits into Alabama, CBPP finds.

The plan takes many other steps to alleviate hardship. Among other changes, the law:

  • Provides Alabama with $10 million in emergency pandemic Temporary Assistance for Needy Families (TANF) funding. This money is usable for one-time benefits like cash assistance, rental assistance or clothing allowances.
  • Allows states to continue Pandemic EBT (P-EBT) benefits through early September. P-EBT replaces the value of meals that children miss when schools are closed.
  • Increases the monthly allocation for fruits and vegetables in the Women, Infants and Children (WIC) program from $9 to $35 for four months.
  • Makes the first $10,200 of UI benefits non-taxable for households with incomes below $150,000.
  • Excludes discharged student loan amounts from taxable income calculation through 2026.

“Everyone should know the security of having food on the table and a roof overhead,” Hyden said. “The American Rescue Plan Act will help ease Alabamians’ suffering during the COVID-19 pandemic. And it will lay a foundation to build a stronger, more inclusive Alabama in its aftermath.”

Arise legislative recap: Feb. 16, 2021

By Matt Okarmus

Arise executive director Robyn Hyden breaks down the first two weeks in the Alabama Legislature’s 2021 regular session and outlines Arise’s goals for this session. Legislators have prioritized protecting corporations over workers so far this month, even as hundreds of thousands of Alabamians continue to struggle with hunger and hardship during the COVID-19 recession.