The end of the federal stimulus checks has meant that the state support measures to combat inflation have assumed importance. Around 21 states have already announced measures to help out residents, though most of it is backed by federal funds dispatched to states under the American Rescue Plan Act (ARPA), in March 2021 by President Joe Biden.
the negative effect of the pandemic on the economy was expected at some stage though it was delayed by the infusion of large sums by the federal administration. This infusion saved the economy from a massive recession that was expected after the unprecedented total shutdown that lasted for almost three months.
The sudden shutdown plunged millions of Americans into economic despair as most low and moderate-income Americans lived paycheck-to-paycheck. Many Americans faced the prospect of poverty, credit default, and homelessness as a result of a sudden halt in a form of income.
At the state, federal intervention saved such individuals and households from the prospect of penury. The CARES Act sent a $1,200 stimulus check to millions of citizens and it helped them tide over immediate needs including putting food on the table, paying their utility bills, clearing their pending home rent and mortgages, and helping with their medical bills.
But the prolonged pandemic and the delay in finding a cure for it led to the need for further measures as more variants of COVID-19 meant that the federal administration had to intervene again with a $00 stimulus check in December 2020.
With a change in guard in Washington, President Biden came up with a more comprehensive package that not only delivered the biggest ever stimulus check to millions of Americans, it also made provisions for every other aspect of the economy, making provisions to support it throughout the pandemic.
A significant percentage of the $5 trillion package included provisions that prevented businesses from shutting down and continuing to pay their employees. This helped when the economy came back to normal.
The economy reverted to normal immediately and the recession that followed the end of the shutdown period was brief, one of the shortest since World War II. This is even though there had never been a total shutdown before, not even during the war.
Businesses that continued to function despite the pandemic and paid their workers, even though curtailed, helped the economy recover way faster than it would have been possible if they had shut down during the pandemic.
Rescue Plan Funds Help States Give Inflation Relief Stimulus Checks
Allocation to other sectors also helped in the recovery of the economy. The support given to the state, local, and tribal governments helped in the local distribution of funds. And it is such allocations that are enabling close to half of the state governments to help out residents with inflation relief stimulus checks.
Around 21 states have already paid, announced payments or are in an advanced stage of processing the stimulus checks. Even as residents continue to be hurt due to rising prices, these states have stepped in with various measures. They include direct stimulus checks paid to bank accounts or through paper checks, income tax rebates, sales tax holidays, or pre-loaded debit cards.
Most states have given for one-time payments though some, like New Mexico, have spread out the payment over several months.
California and Florida are the latest among states to declare payments for their residents, though the amount and the coverage have varied greatly.
Maine was among the first states of the mark with relief checks worth up to $1,700 to families. Around 858,000 people benefitted from these stimulus checks.
As residents grappled with increased costs due to the pandemic-triggered inflation, Governor Janet Mills stepped in with resources to help deal with the rising costs. Every price raging from high energy costs to increased prices of essential goods touched record highs, with gasoline prices almost doubling in two years.
Gov. Mills proposed returning half the budget surplus to Maine taxpayers in the form of these direct stimulus checks which comes to $850 for individual taxpayers and double that for married couples filing jointly.
Residents who filed their income tax returns for 2021 and had a Federal Adjusted Gross Income (FAGI) of less than $100,000 for single filers, $150,000 for household heads, and $200,000 for couples filing jointly.
New Mexico Paid Inflation Relief Payments Over Three Months
In New Mexico, Around 2.4 million rebates were issued by August 15, with the rest expected to be completed by the end of the month. The relief was issued through two separate tax rebates that were issued over three months in three installments. The last round of payments went out in August. The first rebates were passed during the regular session of the legislature and the other was approved during a special session.
Together the two pieces of legislation provided $1,500 to eligible taxpayers. It was a crucial piece of relief and help marginalized communities including women, Blacks, Latinos, families with children, and families particularly affected by the pandemic and the resultant economic downturn.
The rebate went out to residents who filed their state returns for 2021 and also met other guidelines. $500 was paid to single taxpayers and married couples who filed separately and who had an AGI of $75,000 or less.
$500 went out to married couples filing jointly, household heads, and surviving spouses with an AGI of $150,000 or less. The rebates in July were the second of the three payments. The other payment was split into two with one being sent in either May or June and the other in August. This part of the rebate did not have income restrictions and has been issued as follows.
$1,000 to married couples filing jointly and also to surviving spouses and household heads. $500 went to single tax filers and married couples filing separately. Both these payments were split into two equal stimulus checks.
Residents of New Mexico did not have to apply for the payments. Those who had filed their returns received it either through bank transfers if they had entered the details in their deposit information, or through paper checks through the US Postal Service.
In a significant change, the payment went out to taxpayers who filed through either their Social Security number or an Individual Tax Identification Number (ITIN). This enables the sizable immigrant population of New Mexico eligible for the payment.