hotel worker in protective suit disinfecting lobby hallway

Pennsylvania’s new CHIRP grants are available for hotels, bars, restaurants and other hospitality businesses that suffered revenue losses during the pandemic.

State COVID Stimulus Plans Boost Relief Efforts

By Emily Maher | March 16, 2021 | State Legislatures News

It’s been a year since the pandemic dramatically altered American life, and states are still reeling from the economic fallout. But as fiscal conditions improve, some states are taking action by funding stimulus packages of their own. In tandem with federal efforts, including the American Rescue Plan Act of 2021, these state plans are designed to accelerate economic recovery by providing direct immediate relief to small businesses, individuals and communities.

Uncertainty over the Coronavirus Relief Fund (CRF) spending deadline, coupled with dwindling available funds, led some states to act on stimulus packages toward the end of 2020. Other states took advantage of an improved revenue outlook to pass relief during 2021 legislative sessions.

Injecting Direct Aid

California lawmakers focused their efforts last fall on a new $500 million Small Business COVID-19 Relief Grant program, low-interest loans for businesses with less access to traditional banking institutions, and temporary tax relief. They stamped their commitment to state-funded relief again in February with a comprehensive relief package. The package bolstered the small-business grant program by $2.1 billion, including $50 million targeted to nonprofit cultural institutions. It also included license renewal fee waivers for certain businesses and emergency financial aid to community college students. Lastly, the state created its own $5.7 million direct stimulus payment program, called the Golden State Stimulus Plan, for low-income Californians. Eligible residents received $600 in one-time relief.

California was not the only state providing direct aid to residents. Washington, D.C., sent payments of $1,200 to those receiving federal Pandemic Unemployment Assistance. And, in Colorado, an executive order from the governor in October 2020 authorized direct payments of $375 to about 435,000 residents. Anyone qualified to receive weekly unemployment benefits ranging from $25 to $500 between mid-March and October 2020 was eligible for direct payments.

Colorado’s direct aid to individuals was just part of a larger $300 million stimulus package, passed in special session in December 2020. That package included $57.1 million for local businesses, arts and cultural organizations, and minority-owned business. Lawmakers also included housing and utility assistance, food pantry assistance, restrictions on food delivery, tax and fee breaks for businesses, child care support, and grants to improve broadband access.

Maryland’s RELIEF Act of 2021 provided immediate payments of $500 and $300 for families and individuals who qualified for the earned income tax credit. The act also supported small businesses with $200 million in sales tax credits based on a sliding scale. The stimulus measure is expected to impact 400,000 Marylanders and more than 55,000 small businesses.

Relief for Businesses, Workers

New Mexico passed complementary bills to assistance businesses and workers. Senate Bill 1 provided a four-month tax holiday to restaurants and a $600 rebate to low-income workers. House Bill 11 provided a gross-receipt tax deduction for restaurants and $200 million from the state general fund for individual grants up to $100,000 for businesses that experienced declines in 2020.

Nevada and Pennsylvania concentrated on small-business assistance. Nevada Governor Steve Sisolak (D) signed AB 106, which provided $50 million for small businesses through the Pandemic Emergency Technical Support (PETS) Grant Program. PETS targets service-oriented businesses with funds covering expenses related to working capital, PPE, or protective retrofit due to the pandemic. The program also received funding from the CRF.

Pennsylvania established a new $145 million COVID-19 Hospitality Industry Recovery Program, providing grants to bars, restaurants, hotels and related businesses. Funds will go to the counties, which will award them to businesses that suffered revenue losses during the pandemic. All counties are eligible.

In addition to state-funded stimulus plans, states are gearing up to allocate $195 billion in aid from the federal American Rescue Plan Act of 2021, which was signed into law March 11. This additional state and local aid will bolster state efforts as the nation journeys down the long road to recovery.

Emily Maher is a policy associate in NCSL’s Fiscal Affairs Program.

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