The federal grant spending freeze, announced in January then rescinded by President Donald Trump and blocked by federal judges, could have catastrophic impact on federally dependent Mississippi, should it be re-enacted.
Magnolia State agencies, according to a report by its legislative watchdog agency, spent $10.9 billion in federal grant assistance in fiscal year 2023, covering everything from agriculture to solving violent crime and helping veterans. Nearly every state agency, from the Governor’s Office — which received $11.6 million for the period — on down spends federal grant money.
For scale, the entire annual state general fund budget is about $7 billion.
State Rep. Daryl Porter, D-Summit, requested the report from the legislative committee on Performance Evaluation and Expenditure Review and received the rundown on the fiscal impact of a freeze in federal funds.
Some highlights of the report include:
- Mississippi received $270 million for health programs, not including the $5.7 billion it received for Medicaid services or the $40 million for mental health programs.
- Mississippi received billions in U.S. Department of Agriculture aid, including $376.7 million for feeding school children, $70 million for Women, Infants and Children nutrition programs, nearly $2 million for inspecting meat and poultry, $5.9 million for soil and water conservation and $3 million for forestry assistance.
- The U.S. Department of Defense helped Mississippi’s National Guard and military operations with nearly $119 million. It helped the state’s veterans affairs efforts with nearly $52 million, including nursing home care for veterans.
- Mississippi’s economic development agency spent $44.6 million in federal grant money.
- Public safety in Mississippi received nearly $29 million in federal grants including $15 million for transportation safety and millions for fighting drug trafficking and homeland security programs.
- The U.S. Department of Transportation provided the state grants of nearly $751 million.
- Mississippi’s Wildlife, Fisheries and Parks received nearly $19 million.
A memorandum from the Office of Management and Budget (OMB) from the executive office of the president to heads of federal agencies announcing the freeze last week directed them to “temporarily pause all activities that may be implicated by the executive orders, including but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”
A follow-up memo said the previous one “is rescinded,” and, “If you have questions about implementing the president’s executive orders, please contact your agency general counsel.”
The freeze last week left those who rely on federal grants uncertain what to do, including those at Mississippi universities who perform research with federal grant dollars. A biology professor reportedly questioned whether researchers could purchase food for their live animals.
In a statement last week, Gov. Tate Reeves said, “We are closely monitoring the situation and are in communication with federal authorities to ensure that critical services for Mississippians continue without interruption. Our priority is to safeguard the well-being of our residents, especially those who rly on federally funded programs.”
On Wednesday, Mississippi U.S. Rep. Bennie Thompson, ranking member of the Homeland Security Committee, called for new Homeland Security Director Kristi Noem to provide assessment of how a federal freeze would impact homeland security programs, such as those “that, among many other things, support first responders, provide security funding to houses of worship, and provide grants for towns and cities to secure their networks.”
In a statement Thompson said: “Trump’s extreme funding freeze — straight out of Project 2025 — will not only take money from families and children to pay for tax cuts for billionaires, it will have disastrous consequences for our national security. Since the September 11 attacks, we have wisely invested — and continue to invest — in dozens of homeland security grant programs to keep all of our districts safe from terrorism and prepare for disasters.”
Mississippi is perennially among the top most-federally-dependent states, with more than 40% of its annual budget coming from federal dollars. The state receives a nearly 3-to-1 return for every dollar in federal taxes it pays, and annual federal per-capita payments to the state are nearly $7,000.
One recent study said Mississippi had nearly 18,400 people employed in federal jobs, nearly 5,000 more than in neighboring Arkansas, with a similar population.
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