Although the coronavirus pandemic and possible economic fallout is not yet over, some areas of the country are reporting unexpected budget surpluses due to the handful of stimulus bills passed over the course of the last year, according to ABC News.
One such example is the city of Alexandria, Virginia, which received approximately $30 million in stimulus spending from the federal government. The city recently passed its own spending plan using some of those funds to invest in infrastructure, food assistance, and a temporary universal basic income plan to give $500 checks to approximately 150 families.
Richard Auxier, a spokesperson for the Tax Policy Center, said that “we are seeing a lot of states [that] talked about how they were going to have to raise all sorts of taxes and cut all sorts of spending, and it didn’t happen,” although he noted that the economic troubles facing the country are not over yet.
Despite a recent report confirming that the recession caused by the pandemic in February of 2020 actually ended in April of last year, there have been significant negative effects as a result of the most recent stimulus bill, the American Rescue Plan Act, which spent $1.9 trillion and has caused a spike in inflation and prices, as well as a trend of out-of-work Americans refusing to go back to work, since they would rather continue collecting unemployment benefits.
Nevertheless, the surprising number of budget surpluses is being attributed to the four major stimulus bills that have been passed since the pandemic first began: The CARES Act, the Paycheck Protection Program and Health Care Enhancement Act, the Consolidated Appropriations Act, and the American Rescue Plan Act. All except the American Rescue Plan were signed into law by President Donald Trump, and the four laws combined spent a total of nearly $7 trillion on relief efforts, including bailouts to certain jurisdictions as well as increased funding of hospitals and medical care.
And even then, there are still concerns that not all of the federal funds are going where they should be. Maryland Comptroller Peter Franchot (D-Md.) has started a working group to investigate where the money has been spent, claiming that, while “some of it will be well spent, a lot of it probably won’t be. That’s the nature of having a fire hydrant of cash come into the state suddenly.”