More than a dozen states have already or are considering delivering one-time relief payments to their residents as inflation rises to 7.9 percent and consumer prices are the highest in 40 years.
These record-high food and gas prices have prompted some state lawmakers to propose tax cuts, income or property tax reductions, and the abolition of gas taxes.
Most states are experiencing an increase in tax revenue and a cushion for federal pandemic relief funding at this time, which lends credence to these stories of generosity. Large state surpluses and optimistic economic recovery are encouraging many governors to open their purses and support those who have been hard-struck financially by the pandemic.
In most circumstances, tax relief and rebate checks are the only short-term solutions. Critics argue these checks won’t help cover mounting costs and that tax suspensions divert money away from where it’s needed. As a matter of fact, most state governments are likely to favor short-term assistance over long-term tax reform.
Most, if not all, states will eventually provide limited aid to alleviate the increasing price shocks seen most acutely at petrol pumps and supermarket checkout lines.
The national average for unleaded gasoline hit $4.33 a gallon on March 11, according to AAA, while the Consumer Price Index shows that gasoline prices rose 6.6 percent in February 2022, up 38 percent from a year earlier. Due to the rise in petrol prices, the average family is likely to incur an additional $2,000 in costs this year.
Over the past year, the cost of food has risen by a whopping 7.9 percent. Foodservice prices are expected to climb 5.5% to 6.5% in 2019, which is a greater increase than expected in 2020 and 2021, and historically higher than normal. The price of groceries (food for consumption at home) is predicted to climb by 3 to 4 percent.
It’s still a work in progress for many state spending plans to be finalized. As far as rebates go, several states are suggesting the following:
The state of California, Gov. Gavin Newsom, has proposed a $400 per vehicle direct payment to California households in the light of the state’s extraordinarily high gas prices (two vehicles maximum). By July, if the bill is signed into law, the payments will come.
Georgia’s: ” Gov. Brian Kemp recently signed a bill allowing taxpayers who filed forms for both 2020 and 2021 to receive $250 (for single filers), $375 (for household heads), or $500 in rebate checks (married joint filers).
Hawaii: Governor David Ige recommended in January that all taxpayers and their dependents receive $100 rebates. It is hoped that by reimbursing residents, the state’s economy will grow by $110 million.
Idaho: Gov. Brad Little signed a tax refund measure into law in February. Taxpayers in Idaho will receive either $75 or 12% of their 2020 income tax refunds.
Indiana: Taxpayers in Indiana will earn $125 each when they file their 2002 taxes, according to the Indianapolis Star.
The state of Maine: Gov. Janet Mills claims that Maine people would spend $560 more this year than they did last year, thus she wants residents to receive $850 as part of the state’s budget.
Minnesota: When it comes to spending Minnesota’s budget surplus, Gov. Tim Walz has proposed distributing $1,000 per couple in income tax rebates.
New Jersey: About one million New Jersey families received cash grants of up to $500 each when Gov. Phil Murphy was running for re-election last year.
The State of New Mexico – All individuals will get $250 refund cheques ($500 for married couples) following the signing of legislation by Governor Michelle Lujan Grisham in March.
As with federal stimulus funds, there are income restrictions on these rebates. To be eligible, single taxpayers must earn no more than $75,000, and married couples must earn no more than $150,000.
New York: Gov. Kathy Hochul proposes a $970 average benefit for homeowners outside of New York City through a $1 billion property tax rebate scheme.
Virginia: However, according to Wavy.com, it is projected that each individual will receive a rebate check tax relief of $250 to $300 (or $500 to $600 for a married pair).