With Americans unlikely to receive any more stimulus checks from the federal government, people continue to look up to the states for relief from high prices. The after-effects of the COVID-19 pandemic continue to be felt as wages are still down when adjusted for inflation. Stimulus checks became a major source of sustenance after successive governments approved three rounds of stimulus checks to avert a major humanitarian and economic crisis in the country.
The payment started immediately after the pandemic first struck in the first quarter of 2020. It was not limited to the three rounds of federal stimulus checks and went much beyond that. But all forms of stimulus checks stopped immediately after 2021.
The federal support totally stopped in 2022. But the end of federal support marked the beginning of state support. Inflation relief poured in as states used stimulus check amounts received under the American Rescue Plan Act. A limited economic boom in the last two quarters of 2021 also helped the states fall back on the budget reserves to help out residents affected by record-high prices.
Nearly half of the American states sent out some form of stimulus check either as tax rebates, debit cards, direct transfers to banks, or paper stimulus checks. The inflation relief stimulus checks were widely given to residents with some states sending out the payments to around 65% of the total population.
But the payments have since dried out by the turn of the year. Even at the state level, the payments have been restricted to a few states. The criteria for availing the stimulus checks have also been strengthened. Only low and moderate-income residents can now avail of the payments. The decision to discontinue the payments has been prompted by an improvement in the economy as the employment rate has improved as compared to the scenario in 2020-2021.
In the present scenario, only three American states are putting forth some extra cash for their residents. Residents of Montana, Alaska, and New Mexico are in line to receive a stimulus check in 2023. The Alaska Senate has approved a new formula for the annual Permanent Fund dividend. But it will be some time before a new stimulus check is on.
Alaska Fund Is The Closest That Comes To A Universal Basic Income For Residents
Alaska has long been rich in its abundant supply of natural resources. These resources have a long history of supplying revenue for the state. Ten years after Alaska achieved statehood, oil and gas were discovered in the state. It brought in close to a billion dollars in revenue.
There was a considerable amount of debate about the use of the proceeds of the sale. Ultimately, the money was used to support social programs and infrastructure. A part of the expected revenues was placed in a permanent fund. It was independent of government spending and was designed to generate income into perpetuity. The constitution of the state was amended through a majority vote and by a huge margin the permanent fund was approved. The Alaska Fund is the closest that comes to a universal basic income.
Around a quarter of sale proceeds that include royalties, rentals, bonuses, federal part of shared payments, and sale proceedings are included in the permanent fund. The principal is used only for income-producing investments that have been set by law as being eligible for permanent fund investments.
Income from the permanent fund is added to the fund as per law. The fund has been giving out stimulus checks through annual dividends to all residents for over four decades ever since it was set up in 1977.
For all these years residents have been getting dividends that are usually over $1,000 from the $76.6 billion Alaska Permanent Fund. Recently, the fund was also the largest source of money available for the state government.
The received size of the fund is huge. Its value stands at $14.3 billion with a large part tied up in investments. Governor Mike Dunleavy has called the Legislature to amend the Alaska Constitution. It calls to consider a long-term plan to bring revenue and state spending into balance. The governor has called for a new level of Permanent Fund dividends while proposing measures to protect the earning reserves.
There has been recent erosion in earning reserves while the non-spendable principal is being buffeted by the record inflation that has ravaged the American economy for the past year and a half. The principal is currently valued at $62 billion with $1.4 billion appropriated from the earnings reserve by the state legislature. But that amount is way less than what the fund would require to grow to keep pace with the present inflation that crossed the 9% mark at one stage in June 2022.
Montana State Stimulus Check Details
The Montana tax rebate stimulus checks are being sent this month. The tax relief bill was passed recently in March. The income tax rebate of up to $2,500 will be the upper limit and the actual amount that residents will receive depends on the details of their income tax returns for 2021. Gov. Greg Gianforte announced the legislation and said that it was a historic tax relief package that will provide Montanans with the largest tax cut in the history of the state.
Only residents of Montana who have filed for 2021 as full-year residents will receive the stimulus check. They must also file a part or full-year state tax return for 2020. The tax rebate bill also details other criteria for qualifying.
Filers must have filed their return for 2020 and 2021 by the deadline. There is a waiver only for those who have filed for an extension. Individuals who have been claimed as a dependent on a federal or state income tax return for 2021 are not eligible for the state stimulus check. Further, the amount that has been recorded on Line 20 of Montana Form 2 must be more than zero for a filer to receive an income tax rebate payment.