Despite the multiple rounds of federal stimulus checks people continue to be hurt as the economic situation has failed to normalize ever since the pandemic created havoc. It is more than two years since the lockdown was declared and people received federal support at every stage, starting immediately after the country went into lockdown.
But the turn of the year saw a total close down of all forms of stimulus checks. A fourth round was blocked by the Republicans who started blaming the third round of stimulus checks for the creeping inflation rate which began its steady rise from the second quarter of 2021.
Even the extended unemployment payments and the enhanced Child Tax Credit stimulus checks were stopped. But inflation has continued to rise and has reached record levels in the second quarter of 2022, touching 9.1% year-on-year in June 2022, the highest since November 1981. It has eased a bit to around 8.5% in July, but it remains way above the normal sub-2% level which is normal for the American economy.
States Step In With Stimulus Checks Realizing The Emergency That Residents Are Facing
Around 20 states have stepped in to fill the gap created by the federal withdrawal from the stimulus picture. But the aid being offered is nowhere near the level that the federal government was able to muster given its resources.
But the states have been helped by two factors that have gone for them. The last two quarters of 2021 were a boom time for the economy and most states built up a healthy budget surplus. California for instance has built up a budget reserve of around $97 billion, more than most leading world economies.
Close to half the states have pulled in as much revenue, if not more than, they have managed in the last 12 months as they did in the year that led to the pandemic. These states that are rolling surpluses are providing financial relief to residents through reduced tax rates and cash payments.
The states have also been helped along by funds from the American Rescue Plan Act, which was signed by President Biden immediately after he assumed the American Presidency. The ARPA was signed on March 11, 2021, and within a week the third stimulus check, or the economic impact payments, began.
Most states are using this extra money, or plan to use it, in their budget to either send out stimulus checks, provide tax rebates, or provide relief in other forms to their residents, including gas and transportation cards. This is in sharp contrast to the situation a year ago when shutdowns led to fear among state leaders that they would run out of funds soon.
A Brief Economic Boom Helped States Shore Up Their Revenues
The stimulus checks were just one part of ARPA. It provided financial relief to businesses, local and state bodies, organizations like medical and educational institutions, and state governments. Most states are sitting on these state funds and are yet to use them.
States have a lot more than anticipated when they were fearing a deficit instead. While states that rely more on tourism like Nevada and Hawaii or states that depend on their natural resources like Alaska, Hawaii, and Texas have taken a hit during the pandemic, other states have reported a healthy surplus.
These states have moved in to help people who have struggled during the pandemic and continue to suffer as inflation has drained their resources and left them in the same situation they faced immediately after the onset of the pandemic.
California And Florida Move In To Provide Stimulus Checks To Residents
The list of states that have legislated on the issue of inflation relief stimulus checks or are in the process of doing so has crossed 20, with California and Florida among the latest to join the group. Other states that have moved ahead with stimulus checks include Alaska.
Alaska is providing a cash payment of $5,500 to its residents and the state Senate approved the stimulus checks with a 15-5 vote favoring the legislation.
The Colorado Cash Back Bill will enable eligible Colorado residents to receive a stimulus check of $750 for individuals and double for joint filers starting the last quarter of this year.
California is offering a stimulus check of up to $1,050 for joint filers earning $150,000 or less and reporting at least one dependent. Families reporting earnings of $250,000 will also receive a stimulus check though the amount will be less.
Delaware is granting a one-off stimulus check worth $300 to eligible residents. Florida is giving out a one-time check of $450 to families with children. But it is restricted to families that include foster parents, caregivers, or are on assisted programs.
Taxpayers in Georgia who are eligible will get a $250 stimulus check for individual filers and double that for married couples. Qualifying residents in Hawaii with get $300 if their income is below $100,000 and $100 otherwise.
Idaho’s residents who qualify can expect a tax rebate that is greater than 12% of their state tax or $75. Illinois residents are getting a 1% relief in sales tax on groceries and are also enjoying reduced sales tax that is between 1.25% and 6.25%. They will also get rebates on income tax between $50 and $100 depending on their filing status.
Eligible Indian residents will get a $125 stimulus check. Maine is among states who are giving out their highest stimulus check to residents. Qualifying residents will get $850 if filing individually and double that amount for married couples filing jointly.
New Jersey is giving out a $500 payment under the tax rebate scheme of the state while qualifying taxpayers in New Mexico will get a rebate spread out over three months that could be worth up to $1,000.
While South Carolina is offering an $800 rebate on taxes, Oregon is sending out one-time assistance that is worth around $600. Residents of Virginia could get up to $500 this fall.
Many states are also using the surplus funds to focus on improving their infrastructure, including water and sewer projects and broadband. A lot of public workers, around 1.2 million, were laid off during the pandemic and this will enable states to restore positions and services that were cut. This will lead to a lot of rehiring across sectors.