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Sunday, November 27, 2022

State Stimulus Checks Continue Into September: Some Major Payments

The flow of state stimulus checks continues into the last part of 2022. And in the absence of any form of federal stimulus, this was the only support in any form in the absence of federal stimulus check. Most state stimulus checks are being supported by funds from the American Rescue Plan Act signed by President Biden immediately after it came to power at the beginning of 2021.

The states sending out the stimulus checks have also been aided by a booming economy in the last two quarters of 2021. It has led to a healthy budget surplus, the highest in many years. And interestingly, it is not only the Democrats who have come up with stimulus checks.

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Even the Republicans, who have vehemently opposed stimulus check payments for low and moderate-income and predictably supported billions of dollars in tax waivers for billionaires have for once moved into this unknown territory and begun supporting people hit hard by the inflation.  

The federal funds have died out even as the record inflation rate continues to assail Americans. The political gridlock in Washington has ensured that no more stimulus checks are forthcoming at least till the midterm results are out. And it could get worse after that as the republicans are poised to take over both the Houses if poll predictions are anything to go by.

American Rescue Plan Act State And Local Body Funds Assume Significance In Absence Of Further Federal Stimulus Checks

The number of states sending out inflation relief stimulus checks has swelled to 21. What started as a trickle has grown into a multi-billion-dollar relief measure. The states have been enabled by fund support on two fronts.

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The American Rescue Plan Act signed by President Biden c couple of months after he assumed power in January 2021 gave out comprehensive relief coverage to citizens. The State and Local Fiscal Recovery Fund (SLFRF), a component of the ARPA, impacted local and state governments. A significant amount was allocated to the SLFRF.  The funds were for use by the governments over several years.

The funds are for use to cover qualifying costs obligated between March 3, 2021, through the end of 2024. The funds are to be expended by end-2026.

Stimulus Check
Stimulus Check

The funds were originally intended to respond to a public health emergency and its negative impact on the economy. It was also to assist households with job training, affordable housing, and childcare. The funds also provided support to non-profits, small and micro businesses, and aid to industries that were severely impacted during the pandemic including hospitality, travel, and tourism.

The funds also were stipulated for emergency workers and government services most affected during the pandemic. the necessary investment was also allowable in broadband infrastructure, water, and sewer. 

States Rely On Rescue Plan Funds To Give Out Stimulus Checks

Many states are using their portion of the Rescue Plan funds to support certain groups of frontline workers as a one-off bonus payment. Initially, the states planned on using part of the funds for supporting frontline and essential workers who worked throughout the peak period of the pandemic.

But recently states have been using unutilized ARPA funds for sending out stimulus checks to residents affected by the record inflation that threatens to undo much of the progress made since the economic downturn brought about by the pandemic.

The initial number of states was a handful including Maine and New Mexico. But it soon swelled to 16 and finally to 21 states that are in various stages of supporting their residents with inflation relief stimulus checks.

Numerous states have already implemented some form of stimulus programs in place of federal support to give stimulus checks to their residents. California and Florida are two of the latest in the long list of states that have been in the process of implementing their stimulus programs.

California residents were among the most affected people as gas prices in the state continue to remain among the highest in America. But Governor Gavin Newsom has signed legislation to give out a generous relief for residents.

The initial plan to give out a $400 gas card to car owners across the state and also transit cards has given way to direct stimulus checks. Around 23 million residents or around 60% of the population will benefit from the support.

The direct payments for the low and middle-income class work to a maximum of $350 for individual filers earning $75,000 or less. One more dependent is eligible for the same amount. For joint filers earning $150,000 or less, the stimulus checks could work out to $,1050 at $350 for each filer plus another $350 for a dependent.

Stimulus Check
Stimulus Check

Even residents earning $500,000 as joint filers are eligible for a state stimulus check though the amount has been curtailed to $00 for each filer plus another $200 for a dependent.

Florida is a surprise entrant to the list. Some Florida families with kids will get $450 inflation relief stimulus checks. The payments are being given to offset the continual impact of inflation, especially on low and middle-income groups, and to help them afford supplies for the coming school year.

Around 59,000 families are expected to benefit from the one-off stimulus checks. To be eligible families must meet one of the following qualifications on July 1 as revealed by the Dept. of Children and Families.

They must be either a foster parent or a caregiver. Both relative and non-relative caregivers are entitled to the payment. Families on welfare under the cash assistance Temporary Assistance for Needy Families scheme and participants under the Guardianship Assistance Program also qualify for the stimulus check.

The payments are being wholly funded from funds under the Rescue Plan Act. Republican Gov. Ron DeSantis, who vehemently opposed the stimulus check initially said that the funds would have instead reverted to the federal administration if not allocated by the end-2024.

Around 667,000 frontline workers in Minnesota including medical workers, first responders, grocery clerks, and meat packers are in line for a $750 bonus check expected in September. The bonus payments will be given to employees who have worked 120 hours or more between March 15, 2020, and June 30, 2021. They must not have received unemployment benefits for over 20 weeks, according to the state website.

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