How Close Are You To A State Stimulus Check: High Inflation And Price Rise Force States To Consider Additional Relief Measures

stimulus check
stimulus check

The Economic Impact Payment has turned out to be the last of the federal stimulus checks, at least for now. But people continue to suffer due to the economic downturn that was initially triggered by the pandemic. The last quarter of 2021 saw the beginning of a drastic rise in the inflation rate that affected the price of gas, other essential commodities, rent, and utilities.

Inflation crossed the 8.5% mark, the highest in over 4 decades riding on multiple factors including the war in Europe. While the opposition Republicans have tried to blame the high inflation totally on the third stimulus checks, analysts have pointed out that the effect of the Economic Impact Payment was too minuscule and for too short a period to have any significant impact on the price rise.

Gas prices have doubled over the past two years and have proved to be onerous for Americans, totally dependent on a personal mode of transportation. Prices have kept rising and crossed the $5 a gallon mark.

States Decide To Go It Alone With Stimulus Checks For Residents Buoyed By ARPA Funds

The $1.9T American Rescue Plan act signed by President Joe Biden in March 2021was the last of the federal stimulus check bill in aid of the recovery of the American economy and to support public health following the downturn caused by the pandemic. Included in the plan was a $350 billion emergency fund to support local, tribal, territorial, and state governments under the Coronavirus State and Local Fiscal Recovery Funds.

State governments and the Dist. of Columbia received a total of $195.3 billion as the share of states from the recovery funds disbursed in two tranches. Territories received a total of $4.5 billion through a single installment. The states and territories must obligate the fund by end-2024 and spend them by end-2026. Otherwise, the funds will revert to the federal administration.

The funds were granted for a variety of funds with states having the discretion to spend them as they see fit. The categories under which the funds could be spent include economic development endeavors, and non-profit and small business assistance initiatives.

States are also allowed to spend the funds on workforce development efforts, which include, among other categories, public job programs, combined education, and work training. There are also funds for people returning to the workforce.

Funds have also been allocated for efforts at public health response, mitigation, and prevention undertakings. This includes vaccination initiatives, testing, public communication efforts, and allocation even for mental health services.

There are also funds allowed for education, general infrastructure, housing, human services, and the enhancement of art, culture, and tourism.

States Stimulus Check Initiatives With Support From Arpa Funds And Revenue Surplus

With states still holding on to surplus funds from COVID-19 federal support programs, several states comprising both Democratic and Republican administrations have gone in for measures that will mitigate a part of the effect of the high inflation on the residents. They have also been buoyed by surplus revenues generated by a strong collection in 2021.

California was among the first states to go in for stimulus check payments to support its residents. Democrat Governor Gavin Newsom signed the Golden State Stimulus Check I and II that gave wither $600 or $1,200 under the first installment and between $600 and $1,100 under the second.

Additionally, the governor has proposed a gas card worth $400 for each car registered in the state with each family capable of picking up a stimulus check for two cars maximum. The governor has also proposed transit cards for families and individuals who do not own cars.

Democrat Gov. David Ige of Hawaii proposed a $100 stimulus check which was later enhanced to $300 for families earning below $100,000 and $100 for the rest.

Georgia, a Republican-controlled state, has announced a one-off tax credit for 2020 and 2021. The revenue department of the state will credit the refunds automatically as tax filers send in their returns for 2021. The Georgia stimulus check comes to $250 for individual filers, $375 for heads of households, and $500 for married couples filing jointly.

Idaho’s Republican Gov. Brad Little has pushed through a measure to send tax rebates that comes to $75 for each taxpayer and dependent or 12% of the taxes paid for 2020, whichever is higher. To avail of the stimulus check, taxpayers have to be residents of the state for both 2020 and 2021 and have filed their tax returns for both years.

Maine Gov. Janet Mills, a Democrat, has pushed through legislation that will send an $850 direct stimulus check to tax filers. It is one of the most generous among state stimulus checks and had bipartisan support in the legislature.

New Mexico, controlled by the Democrats, moved legislative measures that include a child tax credit that is worth $175 a child, plus a one-off tax rebate of $50 for single filers and doubles that for married couples filing jointly.

Colorado has proposed a state stimulus check worth $400 to resident’s and Governor Jared Polis signed the bill in May. The exact amount will hinge on the total revenue earned by the state.

Delaware will also begin sending out stimulus checks worth $300 to residents who have filed their returns for 2020. Married couples filing jointly will receive $300 each.

Frontline workers in Minnesota will receive a one-off stimulus check worth $750. The bill has been signed already by Governor Tim Walz in the first week of May. Residents could also receive a $500 stimulus check out of the $9.25B budget surplus.

Maryland, Georgia, and Connecticut have directly addressed the rising gas prices by cutting back on state gas taxes. The amount varies in each of the states. Other states too are mulling cutting down on gas tax including New Jersey, New York, California, and Ohio. Gas tax charged by the state comes to around $0.39 a gallon, according to data released by the American Petroleum Association.

There have also been demands to cancel the federal gas tax. But lawmakers on both sides have argued that it would not come too much and would hamper development work.

Several states are also considering cutting back on state income tax rates to curtail rising inflation. Georgia, South Carolina, and Colorado are among the states that are in advanced stages of discussion on this issue.

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