With federal stimulus checks drying up just before the highest inflation in 40 decades, states have stepped in to support residents who continue to be severely affected by the economic downturn following the pandemic.
The Fed responded immediately after the first wave of the pandemic struck in the first quarter of 2020. The all-powerful central bankers responded to the COVID-19 pandemic and unleashed a series of stimulus checks that helped citizens avert the economic crisis.
The intervention empowered the federal administration to follow a path of sustained financial largesse without worrying about the debt issue. The Fed kept picking up government bonds as fast as the Treasury issued them. It created a period of spending but without taxation issues.
Federal Treasury Exhausted By Successive Payments
The successive stimulus checks, followed by the enhanced Child Tax Credit payments, exhausted the federal treasury. The economy saw an admirable recovery in the last two quarters of 2021, and the GDP was higher than even before the pandemic. The economy recovered faster than after the 2008 economic crash. But it would contribute partially to the high inflation in the first quarter of 2022.
The federal was not quite willing to intervene again when high inflation struck in 2022. It was left to the states to come up with solutions to back their residents as prices of gasoline and other essentials hit the roof. The inflation rate climbed to 8.5% in March, the highest in 40 years, and has stayed above 8% for the past two months.
State Stimulus Checks Funded By American Rescue Plan And State Surplus Funds
Several states have stepped in and some have even passed legislative measures though the extent of support and the form has varied from state to state. California was the first off the mark with successive stimulus checks under the Golden State stimulus scheme. But with gasoline prices the highest in the nation, a new proposal by Governor Gavin Newsom will see the state administration ease the pain of drivers with a gas subsidy of $400 per vehicle through a gas card, subject to a maximum of 2 gas cards per family.
Now income limits have been set for the gas cards, unlike the stimulus checks. There are also plans to halt a proposed hike of 3% on the tax on gasoline in California, that was scheduled for July 2022. There is also a plan for free public transit for state residents who do not own cars. It will offset the rising cost of transportation post-inflation.
Residents of Delaware will also receive a stimulus check from the state administration. The 2022 Delaware Relief Rebate Program, passed on April 14, has been signed into law by Governor John Carney. Under this relief program, a $300 one-off stimulus check is being sent out to residents.
The payment will go out to all residents who have filed their income tax returns for 2020, and the stimulus checks are in the process of being mailed and residents should be receiving them in June. The amount is the same for all and even high-income groups have not been exempted from the scheme.
The governor said that the Delaware relief stimulus checks are intended to help residents face high prices at gas pumps and grocery stores. He said that Delaware was trying to issue the $300 stimulus checks to the qualifying taxpayers as early as possible. The plan had bipartisan support in the legislature.
Residents who have filed their 2020 income tax returns do not have to take any additional measures. All stimulus checks will be sent through the US Postal Service and will be sent to the address in the tax records of residents. The Delaware dept. of finance can be contacted at [email protected] or 302-577-8200 if any resident does not receive their stimulus check.
Thousands of residents in Chicago have applied for a chance to receive stimulus checks intended for low-income residents to help them cope with fuel prices. The Chicago stimulus checks will be in the form of pre-paid gas cards and transit cards. Eligible residents will receive either a $50 transit card or a $150 prepaid gas card.
This initiative is under the Chicago Moves program and was approved by the City Council on April 27 by a thin margin of 26-23. This financial assistance program will provide $2.5M in transportation relief to residents in dire need. 75% of the cards will go to low-income communities or residents resident in areas facing mobility issues. The remaining will go to residents across the city.
The gas cards will be used at gas stations within city limits. The transit cards are usable at Ventra vending machines in CTA stations, on the Ventra website, mobile app, and in retail locations.
Under Mayor Lori Lightfoot’s initiative, the city will issue 100,000 prepaid transit cards and 50,000 prepaid gas cards.
In May, Delaware started sending relief rebate payments of $300 to taxpayers who have filed their 2020 state tax returns. Their one-off payment is possible due to a surplus in the budget. Taxpayers will receive the stimulus check by mail by the end of May. For those married couples who file their returns jointly, they will receive a total of $600.
People who have filed their 2020 income tax returns will receive the stimulus check immediately. But no instructions to claim the rebate have been released for residents who are yet to file their 2020 tax returns.
Under Ithaca’s Guaranteed Income Program in New York, payments worth $450 are expected to be made to residents for 12 months. These payments will go out to caregivers, including parents. The payments will start rolling out this month through prepaid cards.
Caregivers have been defined as adults who devote significant time to caring for aging and disabled children without any payment. This could be both at home and outside and includes people who care for their parents and also parents who look after their kids. It goes beyond families and includes partners, neighbors, guardians, friends, and many more.
To avail of this stimulus check, residents of this region must have an income that is below 80% of the median income of the area, which ranges from $5,200 for an individual to $97,650 for a household comprising eight members. Payments will be dispatched starting in June through prepaid cards. Liddy Bargar of the Human Services Coalition in Tompkins County said that the program is a research pilot and different from traditional stimulus payments.