Can a Mississippi county pay each employee a $1,000 ARPA bonus for staying on the job during the pandemic?
Plain-English summary
Issaquena County wanted to thank its employees for staying on the job during the pandemic by giving each of them a $1,000 bonus from American Rescue Plan Act (ARPA) money the county had received. The board's president asked the AG whether that was legal.
The AG said no, and the analysis is short and structural.
The opinion makes two upfront limits clear. First, the AG does not interpret federal law. ARPA's federal rules govern federal eligibility, but the AG's office cannot decide whether a particular county expenditure satisfies those rules. Second, once ARPA funds are deposited in the state's or county's treasury, Mississippi state-law rules also apply. So the question gets analyzed under state law, and the federal-law half is left for federal authorities.
On the state-law side, the answer comes from two provisions of the Mississippi Constitution. Article 4 § 66 prohibits laws granting "a donation or gratuity in favor of any person or object" except by a two-thirds legislative vote. Article 4 § 96 prohibits granting "extra compensation, fee, or allowance, to any public officer, agent, servant, or contractor, after service rendered or contract made."
Mississippi has applied those prohibitions to retroactive bonuses for years. The AG's prior opinions are unanimous: a public entity cannot pay employees extra compensation or bonus payments for past services because doing so would equate to an unlawful donation. The Eleuteris (2013) opinion said it directly. The Adams (2003) opinion said teachers under contract for the school year could not get extra pay for services already rendered. The Chiles (2020) opinion was the closest precedent: "A county may only expend county funds for incentive pay, including 'hazard pay,' when such incentives are contracted for prior to the date when services are to be performed."
Issaquena's proposal was for past service. The employees stayed on the job during the pandemic. Their employment contracts already governed that work. A new $1,000 payment would be added compensation for services already covered by contract. That is exactly what §§ 66 and 96 prohibit.
The opinion does not address whether Mississippi could lawfully pay premium or hazard pay for future service. The answer to that, based on Chiles and longstanding doctrine, is yes, if it is contracted for in advance.
What this means for you
If you serve on a Mississippi county board of supervisors and want to use ARPA funds for employee compensation
Backward-looking bonuses are off the table under Mississippi law. Forward-looking premium pay or hazard pay is permitted, but only if you commit to it before the work happens. The clean structure is: the board adopts a resolution describing the pay, the conditions, and the period during which it applies; employees who do the qualifying work during that period receive the pay. Get the resolution on the minutes before the work. Document the underlying ARPA-eligibility analysis under federal Treasury rules separately.
If you are a Mississippi county employee hoping for a pandemic bonus
If your employer has not already paid you, and the work is in the past, this opinion forecloses a Mississippi state-law path to a retroactive bonus paid from county funds (whether the source is ARPA money or any other county funds). Federal law has a wider range of options for premium pay, but the AG opinion is firm that once the money enters the county's coffers, state law decides who can be paid.
If you are a city official considering a similar bonus
The same constitutional provisions that bind counties bind municipalities. The Adams (2003), Eleuteris (2013), and Chiles (2020) opinions cited by the AG involve different public employers, and the principle generalizes. A city wanting to use ARPA money for employee pay needs the same prospective-contract structure.
If you are advising a public employer on ARPA spending
Bifurcate the analysis: federal eligibility (Treasury's Coronavirus State and Local Fiscal Recovery Funds rules and the Final Rule, applied to your specific use case) and state-law authority. Mississippi's state-law answer is captured in §§ 66 and 96 and the Chiles line of opinions: prospective contracted incentives only. ARPA's permissibility under federal rules does not override Mississippi's prohibition on retroactive bonuses.
If you are a state auditor or compliance officer
Issaquena's proposal would have been an audit finding even though the source was federal money. The fact that the funds are designated as ARPA funds does not insulate the expenditure from state constitutional limits once the funds are in the county treasury. Watch for backdated resolutions or memoranda that try to cure the timing problem retroactively; the prohibition is on extra compensation "after service rendered or contract made," and a backdated authorization does not solve that.
Common questions
Q: Can a Mississippi county ever pay a bonus to its employees from ARPA funds?
A: Yes, if the bonus is structured as forward-looking incentive or premium pay. Adopt the resolution before the work; tie payment to specific qualifying work in a defined future period; pay only employees who do that work. The Chiles (2020) opinion is the model: incentive pay (including hazard pay) for prospective service is allowed.
Q: Why doesn't the federal source of the money override state law?
A: It does not, because ARPA does not preempt state-law constraints on how a recipient government spends its own funds once received. Federal law sets eligibility for using ARPA money on certain categories (premium pay being one of them), but the state's rules on how the recipient government may compensate employees still apply. The AG opinion is explicit: once turned over to the state, state rules also apply.
Q: What about a bonus paid under a federal "premium pay" structure?
A: ARPA's premium-pay category at the federal level allows retroactive payments for "essential workers" under specified conditions. Mississippi's constitutional prohibition cuts the other way at the state level: even if Treasury allows the use, §§ 66 and 96 prohibit the county from paying extra compensation for services already performed under an existing contract. The federal allowance does not override the state prohibition.
Q: What if the employee is a contractor, not a county employee?
A: §§ 66 and 96 reach contractors too. § 96 specifically lists "contractor" along with "public officer, agent, servant." Retroactive payment to a contractor for services already rendered under a contract is the same problem as retroactive payment to an employee.
Q: Could the county pay premium pay to employees who volunteered for new pandemic-related duties going forward?
A: Yes, if structured prospectively. A resolution that defines new qualifying duties (e.g., contact tracing, vaccine clinic staffing, mass-feeding distribution) for a future period, with premium pay attached to those duties, fits within the Chiles framework. Document the resolution before the work begins.
Q: Does this opinion address ARPA expenditures other than employee compensation?
A: No. The opinion is limited to the donation-and-extra-compensation question. Other ARPA categories (broadband infrastructure, water and sewer projects, public health expenditures) are evaluated separately under their own state-law authorities.
Background and statutory framework
Mississippi's prohibition on donations and retroactive extra compensation is rooted in the 1890 state constitution. Article 4 § 66 was designed to prevent the legislature from passing laws that gave public funds to particular individuals or entities without legislative supermajority. Article 4 § 96 was designed to prevent legislative end-runs around fixed-salary structures and to prevent retroactive raises or bonuses to public servants and contractors. The Mississippi Supreme Court and the AG have long applied both provisions to local governments as well as the legislature.
The doctrine has produced a consistent line of opinions: any extra payment for past services is a "donation" because the public received nothing for it that it had not already received. The pandemic context did not change the analysis. The Chiles (2020) opinion was issued during the COVID-19 emergency and addressed the same issue Holcomb later raised, holding that hazard pay must be contracted for before the work.
The American Rescue Plan Act, passed by Congress in March 2021, distributed approximately $350 billion to state and local governments through the Coronavirus State and Local Fiscal Recovery Funds. Treasury's Final Rule (issued January 2022) detailed eligible uses, including premium pay for essential workers. Federal eligibility is one analytical step; state-law authority to spend the funds in a particular way is a second, separate step.
Citations
- Miss. Const. Art. 4, § 66 (prohibition on donations)
- Miss. Const. Art. 4, § 96 (prohibition on extra compensation after service rendered or contract made)
- MS AG Op., Snell (Mar. 16, 2018) (AG does not interpret federal law)
- MS AG Op., Adams (Jan. 10, 2003) (state spending rules apply to federal funds in state treasury; retroactive teacher bonuses prohibited)
- MS AG Op., Eleuteris (Nov. 1, 2013) (extra compensation for past services equates to unlawful donation)
- MS AG Op., Chiles (Nov. 10, 2020) (incentive pay, including hazard pay, must be contracted for before service)
Source
- Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
- Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2022/09/W.Holcomb-September-7-2022-Donation-of-ARPA-Funds-to-County-Employees.pdf
Original opinion text
September 7, 2022
William E. Holcomb, III
President, Issaquena County Board of Supervisors
Post Office Box 27
Mayersville, Mississippi 39113
Re:
Donation of ARPA Funds to County Employees
Dear Mr. Holcomb:
The Office of the Attorney General has received your request for an official opinion.
Question Presented
Is it legal for the Issaquena Board of Supervisors to donate one thousand dollars ($1,000.00) each
from American Rescue Plan Act funds deposited into the county treasury to county employees that
stayed on the job during the pandemic and are still employed by the county?
Brief Response
Sections 66 and 96 of the Mississippi Constitution prohibit the Issaquena Board of Supervisors
from granting additional compensation for services already rendered and included in a previously
agreed upon contract.
Applicable Law and Discussion
As an initial matter, we are aware that the federal government has issued rules and regulations
governing the expenditure of American Rescue Plan Act ("ARPA") funds, and note, for
informational purposes, that any expenditure of ARPA funds by the county must comply with any
applicable federal rules and regulations governing the same. However, this office is not authorized
to interpret or opine on federal laws or regulations by official opinion. See, e.g., MS AG Op., Snell
at 2 (Mar. 16, 2018). Thus, we must decline to respond by way of an official opinion regarding
the legality of using federal funds in a specific manner in accordance with federal laws and
regulations. Once turned over to the state, the rules for expenditure of state funds also apply. MS
AG Op., Adams at 1 (Jan. 10, 2003). Therefore, we offer the following opinion limited to the
authority of a county board of supervisors to use county funds for donations to employees.
Article IV, Section 66 of the Mississippi Constitution provides, "[n]o law granting a donation or
gratuity in favor of any person or object shall be enacted except by the concurrence of two-thirds
of the members elect of each branch of the Legislature, nor by any vote for a sectarian purpose or
use." Further, Article IV, Section 96 provides, in relevant part, "[t]he Legislature shall never grant
extra compensation, fee, or allowance, to any public officer, agent, servant, or contractor, after
service rendered or contract made, nor authorize payment, or part payment, of any claim under
any contract not authorized by law…."
We have previously said that Sections 66 and 96 prohibit a public entity from paying employees
extra compensation or bonus payments for past services because doing so would equate to an
unlawful donation. MS AG Op., Eleuteris at 1 (Nov. 1, 2013). See also MS AG Op., Adams at
1 (Jan. 10, 2003) (teachers who were currently under contract to perform services during school
year could not be given extra compensation for services already rendered and covered by contract);
MS AG Op., Chiles at *1 (Nov. 10, 2020) ("A county may only expend county funds for incentive
pay, including 'hazard pay,' when such incentives are contracted for prior to the date when
services are to be performed.") Therefore, the board of supervisors could not legally donate funds
from the county treasury to county employees for services already rendered because those services
were performed pursuant to a previously agreed upon contract. Such use of the funds would be in
direct violation of both Sections 66 and 96.
If this office may be of any further assistance to you, please do not hesitate to contact us.
Sincerely,
LYNN FITCH, ATTORNEY GENERAL
By:
/s/ Abigail C. Overby
Abigail C. Overby
Special Assistant Attorney General