Dominick Tavella, President of Lebenthal Global Advisors, and Rebecca Walser, President of Wealth Management at Walser, discuss how stimulus checks will affect the economy and markets.
The massive $ 1.9 trillion Coronavirus Help package that President Biden The bill, signed Thursday afternoon, includes hundreds of billions in funding for state and local governments, with New York, Texas and California poised to receive more than a quarter of the total Help.
The US bailout plan provides unrestricted aid of $ 350 billion to state and local governments, with $ 195.3 billion earmarked for state governments and Washington, and $ 130.2 billion for local governments. Another $ 20 billion would go to recognized tribal governments, while $ 4.5 billion would go to U.S. territories.
States that had more unemployed citizens at the end of 2020 will receive more money than the general population, which has angered some states in the South and Midwest, which tend to have Republican governors and better unemployment rates. While many Democrat-led states put tight lockdown measures in place to contain the spread of the virus, some of their GOP counterparts took a laissez-faire approach that allowed companies to stay open to much of the pandemic.
For example, California, the most populous state, will get the most money, $ 42.3 billion – including $ 26.2 billion for its state government and $ 14.6 billion for all local governments. The second largest state, Texas, will receive the second largest amount of funding at $ 27.3 billion, according to the US government House Oversight Committee.
But New York would get the third highest amount at $ 23.5 billion, despite the fact that Florida is the third largest state by population by 2020 according to estimates by the US Census Bureau. Florida would receive $ 17.3 billion, the fourth highest amount among the states.
House Republicans criticized the Democrats for using unemployment to calculate aid distribution, not the population. They found that Florida, run by a Republican governor, would receive $ 1.2 billion less than if population size were the main criterion. Georgia, another GOP-led state, would raise $ 1.3 billion less under this formula. Still, not only would Republican states get less money: Democrat-led Virginia would also get about 14% less under the current formula.
State and local government funding emerged as one of the most controversial issues in the relief negotiations last year and continues to be hotly debated: Republicans have belittled it as a “blue state bailout” while Democrats have argued that the money is needed to avoid potentially devastating service cuts or layoffs as local governments cannot be deficient in the same capacity as the federal government.
While some state and local households have suffered a financial blow from the recession triggered by the pandemic, the majority of states actually generated almost as much revenue in 2020 as they did the previous year, according to a JPMorgan poll Released at the end of January. Government revenues in 2020 were “virtually unchanged” from 2019, declining only 0.12%, according to data based on the 47 states reporting monthly tax revenues.
In fact, the analysis shows that 21 countries recorded positive sales growth compared to the previous year.
The federal stimulus package – specifically the $ 600 weekly unemployment benefit – played a vital role in keeping states’ revenues alive and avoiding a recurrence of the 2008 financial crisis, when state revenues saw record declines and took years to to recover, which exacerbated the lingering effects of the downturn.
Here’s a closer look at how much money each state will receive from the auxiliary bill:
Alabama: $ 4.04 billionAlaska: $ 1.36 billionArizona: $ 7.63 billionArkansas: $ 2.81 billionCalifornia: $ 42.63 billionColorado: $ 6.07 billionConnecticut: $ 4.35 billionDelaware: $ 1.36 billionDistrict of Columbia: $ 1.62 billionFlorida: $ 17.62 billionGeorgia: $ 8.40 billionHawaii: $ 2.27 billionIdaho: $ 1.89 billionIllinois: $ 13.71 billionIndiana: $ 5.86 billionIowa: $ 2.69 billionKansas: $ 2.72 billionKentucky: $ 4.24 billionLouisiana: $ 5.19 billionMaine: $ 1.65 billionMaryland: $ 6.36 billionMassachusetts: $ 8.10 billionMichigan: $ 10.31 billionMinnesota: $ 4.88 billionMississippi: $ 2.90 billionMissouri: $ 5.48 billionMontana: $ 1.37 billionNebraska: $ 1.77 billionNevada: $ 4.12 billionNew Hampshire: $ 1.54 billionNew Jersey: $ 10.19 billionNew Mexico: $ 2.46 billionNew York: $ 23.80 billionNorth Carolina: $ 8.94 billionNorth Dakota: $ 1.36 billionOhio: $ 11.24 billionOklahoma: $ 3.65 billionOregon: $ 4.26 billionPennsylvania: $ 13.72 billionRhode Island: $ 1.78 billionSouth Carolina: $ 3.87 billionSouth Dakota: $ 1.37 billionTennessee: $ 6.31 billionTexas: $ 27.62 billionUtah: $ 2.74 billionVermont: $ 1.36 billionVirginia: $ 6.88 billionWashington: $ 7.10 billionWest Virginia: $ 2.06 billionWisconsin: $ 5.71 billionWyoming: $ 1.36 billion