Governor Kathy Hochul of New York has revealed a plan to distribute checks as high as $500 to taxpayers to help relieve the burden of living costs.

During her announcement on Monday, which served as a sneak peek for her upcoming State of the State address, Hochul described her “inflation refund” initiative. The proposal is expected to aid approximately 8.6 million residents and will provide $3 billion from the state budget, which Hochul will propose in January and finalize with lawmakers by about April 1.

Hochul characterized the payments as a reimbursement for the excess sales taxes that New Yorkers have incurred due to inflated consumer prices, which have consequently increased the state’s revenue. She emphasized that it is time for New York to give back some of that money “to aid millions of hardworking New Yorkers,” as stated in her announcement.

“It’s straightforward: the cost of living remains far too high, and New Yorkers deserve some relief,” she articulated.

Here’s what you should know about the proposed checks and how they compare to actions taken by other states in recent years.

Who is eligible for the payments and what are the amounts?

Under Hochul’s plan, individual taxpayers earning up to $150,000 annually would receive $300 checks. Meanwhile, couples filing jointly, with a combined income of up to $300,000, would get $500 checks.

When can recipients expect to receive the checks?

If lawmakers endorse the plan, Hochul indicated that check distributions would commence in the following fall. No additional information was provided regarding the specific start date or the duration of the mailing process.

New York’s proposed checks lag behind measures from other states

Since the pandemic began, over 22 other states have issued tax rebate checks, as noted by Jared Walczak, a state policy analyst at the Tax Foundation, a nonpartisan nonprofit focusing on tax policies. Additionally, New York implemented a homeowner tax rebate credit in 2023.

According to Walczak, Hochul’s recent proposal stands out because it has been introduced later than similar actions in other states.

Here are a few states that have enacted related programs:

• California – The 2022 state budget incorporated a “middle-class tax refund” with payments reaching up to $1,050 for qualifying taxpayers.
• Virginia – In November 2023, Virginia taxpayers received rebates of up to $200.
• Georgia – Special tax rebates have been issued in 2022, 2023, and 2024, distributing $250 to single filers and $375 to head-of-household filers.

Hochul’s proposal comes as inflation rates have significantly decreased since their peak in 2022, although consumers continue to express frustration regarding high grocery prices, which have risen over 25% since 2019.

“Most states have moved beyond temporary solutions for inflation,” Walczak shared with YSL News during an interview. “Their focus has shifted more toward long-term economic growth rather than just rebate checks.”

Local leaders critique the proposal for not tackling the broader issue

Walczak stated that for states with surplus revenue, returning funds to taxpayers might be more beneficial than spending them ineffectively.

“However, in general, rebate checks have minimal impact on economic growth since they are reactive,” he explained, suggesting that tax reductions could encourage consumers to budget for future spending instead.

He also pointed out that this money originally belongs to taxpayers, and noted that the IRS has determined that rebate checks in various states may be taxable.

“There could have been better, albeit less politically attractive, methods for utilizing this extra revenue,” Walczak added.

Hochul is anticipated to seek reelection in 2026, and current polling indicates she is not favored by voters. Since Democrats hold the majority in both chambers of the state legislature, they will likely determine the outcome of the “inflation refund” initiative. Critics, including Republicans and potential Democratic challengers, swiftly dismissed the proposal as merely a political strategy and an inadequate response to a significant issue.