Here's What You Need to Remember: In California, Gov. Gavin Newsom (D) and state legislators sent eligible residents $600 payments to families that earned less than $30,000 last year and received California’s earned income tax credit for 2020.
The U.S. Department of Treasury released new spending rules Monday that offers state and local governments flexibility with their coronavirus recovery funds, including the option to send residents cash assistance to help with the economic crisis caused by the pandemic.
The rules provide guidance on the State and Local Coronavirus Fiscal Recovery Fund, a portion of the broader American Rescue Plan, and sets aside $350 billion in direct aid to states, counties, cities and tribal governments with populations over 50,000.
In the bill’s Interim Final Rule, Treasury noted that further cash assistance could mirror or be closely linked to the stimulus payments sent out by the federal government. Congress has approved of direct cash that ranged between $600 and $1,400, so any figure grossly exceeding that realm “would be outside the scope of eligible uses under [the ARPA law] and could be subject to recoupment,” according to the guidance.
But when state and local governments decide the exact value of the additional stimulus payments, Treasury said they “must be reasonably proportional to the negative economic impact they are intended to address.”
Treasury also said that those eligible could be anyone who has seen “a negative economic impact from the pandemic,” adding that it could be those who have “experienced unemployment or increased food or housing insecurity or is low- or moderate-income experienced negative economic impacts resulting from the pandemic.”
The funding could also be used for food assistance; rent, mortgage, or utility assistance; counseling and legal aid to prevent eviction or homelessness; emergency assistance for burials, home repairs or weatherization; internet access or digital literacy; or job training.
Some states have already issued their own stimulus payments.
In California, Gov. Gavin Newsom (D) and state legislators sent eligible residents $600 payments to families that earned less than $30,000 last year and received California’s earned income tax credit for 2020. Also seeing the direct payment are households with individual tax identification numbers and an income below $75,000, households in the CalWORKs program—a program that provides cash aid and services to eligible families with children—recipients of Supplemental Security Income/State Supplementary Payment (SSI/SSP) and recipients of aid through the Cash Assistance Program for Immigrants.
Newsom has proposed a second round of $600 stimulus checks with expanded eligibility.
Maryland also issued direct payments of $300 per individual or $500 per family, and nearly 425,000 residents in the state were eligible for the aid.
Colorado and New Mexico have also pumped out state-level direct payments to certain taxpayers.
Other states could also start seeing additional stimulus payments in 2021. And if not, Democrats have been pushing for a fourth direct payment to be included in President Joe Biden’s upcoming legislative agenda. While it’s unlikely that the measure would pass in a bipartisan effort, Democrats could resort to budget reconciliation to squeeze through the additional direct relief, which would only require a simple majority.
Rachel Bucchino is a reporter at the National Interest. Her work has appeared in The Washington Post, U.S. News & World Report and The Hill. This article first appeared earlier this year.