Local officials are attempting to distribute money to their constituents in every manner they can due to inflation concerns. According to a Yahoo Finance analysis, at least 20 states have already passed legislation allowing for the deposit of checks into citizens’ bank accounts.
The initiatives are made possible by state budgets, which are currently well funded and frequently marketed as a tool to assist people in coping with inflation that is at a 40-year high.
Most recently, California Governor Gavin Newsom passed a budget that contained a “Middle Class Tax Refund” that will start sending checks for up to $1,050 to eligible Golden State citizens in October. This was the most aggressive action in recent memory. According to Newsom, around 23 million Californians are eligible for the cash.
A focus on ‘working families and those who are struggling’
California is not the only state, though. The funds, which are frequently referred to as direct payments or one-time tax rebates, are distributed to their inhabitants by states across the political and geographic spectrum. Some people in Maine are receiving $850 payments, while over 5,000 miles away in Hawaii, some residents may soon receive a $300 tax rebate per person.
There are several programs, ranging from the $400 “Colorado Dividend” to the $300 “Relief Rebate” in Delaware to the $125 “automatic taxpayer refund” program in Indiana.
Though not solely, Democratic leaders are driving many of the changes. Gov. Phil Murphy, a Democrat from New Jersey, recently passed legislation authorizing the mailing of checks up to $500, while Gov. Henry McMaster, a Republican from South Carolina, promises to mail citizens of his state checks up to $800.
And it seems that no sum is too tiny. Illinois will offer $50 income tax refunds, whereas Idaho will have a $75 refund on the books.
Other targeted programs
While this was going on, some states implemented programs that were more specifically directed at certain populations.
There are initiatives in West Virginia and New York that send money to local homeowners. An estimated 2.5 million people in New York are anticipated to benefit from the program.
While Maryland followed up its 2021 check-out of a more traditional style with an offer of up to $2,000 in help in 2022, exclusively to households having trouble paying their water bills, Minnesota pays its frontline employees $750.
Afterward, Alaska is a given. Through the state’s “Permanent Fund,” which distributes energy money to individuals, the state has been directly paying its citizens for many years.
Since families “need support today with rampant inflation, record-high fuel expenses, and the economic damage caused by the epidemic,” Alaska Governor Mike Dunleavy vows that this year’s cheque will be the largest in state history.
Numerous other states, like Massachusetts, Kansas, and North Carolina, are still debating their own plans for various types of tax rebates, so there may be lots more programs in the works.
The programs have been mostly made possible by state budgets, which are exceptionally strong this year as a result of higher-than-anticipated tax receipts and leftover support from Washington, D.C. for the coronavirus.
The budget that Virginia Governor Glenn Youngkin (R-VA) just approved contains $250 one-time reimbursements for qualified taxpayers. Recently, he made an appearance on Yahoo Finance to praise the budget’s components, which also contain a plethora of tax cuts, and to claim that it was “an exceptional step to allow Virginians to keep their money.”
J.B. Pritzker, the governor of Illinois, said in a statement regarding his state’s plan: “In difficult times like these, it’s more crucial than ever to have a government whose first priority is for working families and those who are struggling.”
‘Massive checks really kicked off this big inflation problem’
The initiatives follow three rounds of stimulus payments from the federal government in recent years. The American Rescue Plan, which President Biden signed in March 2021, includes the most recent payments, for a total of $1,400. Some have questioned that bill and those checks in particular for possibly causing inflation.
However, some economists point out that such relief initiatives would not have much of an impact on inflation and might rather exacerbate the issue in some circumstances. According to Douglas Holtz-Eakin, president of the American Action Forum, “it really won’t do much to solve the problem.” What it does is cover up the inflation issue for a while in the hopes that the Fed and other initiatives can address it in the interim.
According to Holtz-Eakin, “I don’t think it’s too complex to explain that large checks actually kicked off this big inflation problem,” and “now the states are getting into the game,”
Washington, DC-based writer and producer Ben Werschkul works for Yahoo Finance.