Americans have been hit hard by continued inflation, even as some prices have begun to decline. However, in some states, they still potentially get a reprieve possibly before the holiday season closes in the form of a new incentive check.
With states flush with cash thanks to budget surpluses, many have sent or plan to send payments to residents struggling with rising costs from inflation. Others have offered relief in the form of tax cuts and tax breaks to try to help ease the burden. The amount of cash they have due to surplus cash from the COVID-19 relief funds and higher tax revenues may allow some to be extremely generous to their residents.
“This allows the states to play Santa Claus,” Richard Auxier, senior policy fellow at the Tax Policy Center, told The New York Times.
Amounts vary by state, depending on the surplus and the number of individual residents. States like New Mexico offered residents up to $1,500, while some in California were eligible for a payment ranging from $200 to $1,050. In Massachusetts, a payment was legally required due to a law that requires tax revenue in excess of the state’s annual cap to be returned to taxpayers. Exact amounts vary, as the refunds represent about 14% of residents’ 2021 tax bills. Other refunds have been given or are in the works in Colorado, Connecticut, Florida, Hawaii, Idaho, Illinois, Indiana , Maine, New Jersey, New York, Oregon, Pennsylvania, Rhode Island and Virginia.
Additional relief is also coming soon in Minnesota (up to $1,000) and Delaware, where checks worth up to $300 could come.
Of course, relief still comes with some trepidation. Experts fear that more stimulus controls would exacerbate the inflation problem, as more money in Americans’ pockets would increase demand in an already choked supply chain, forcing prices to continue rising.
However, inflation seems to be showing some signs of easing now. Mortgage rates, which have been on the rise due to the Fed’s efforts to curb inflation, posted their biggest weekly drop in four decades last week, falling to an average of 6.61% from 7.08%. Price inflation also slowed in October in both the Consumer Price Index and the Producer Price Index, with the Producer Price Index rising just 0.2% compared to September.
Gas prices also continued to fall, with AAA showing an average of $3.68 per gallon as of Saturday. This number is lower than the averages of one day, one week and one month ago. That’s still $0.27 higher than the average price of $3.41 a year ago.