Stimulus checks had big impact locally

WILKES-BARRE — Teri Ooms, executive director of the Institute of Public Policy and Economic Development at Wilkes University, said the organization determined the economic impact the first round of stimulus checks had in Luzerne County.

“We built an economic model to assess the ripple effect of the estimated stimulus money resident’s received” Ooms said. “Assuming most people paid their bills and bought necessities — food, health care, paid rent, etc. — the roughly $316.7 million generated an additional $321.5 million in other sectors of our economy and support 2,658 other jobs this year.”

Ooms said Lackawanna County saw similar impact of the $207 million stimulus — there was additional ripple effect in the economy amounting to over $200 million in total output and 1,710 jobs were supported.

On March 27, the CARES Act was signed into law, which included a $2.9 trillion stimulus package. The stimulus for households includes up to $1,200 for single filers earning up to $75,000 per year and $2,400 for couples filing jointly earning up to $150,000 per year, plus $500 per dependent child.

Individuals who make more than $75,000, but under $98,990, would obtain a partial payment which decreases as income increases.

Those who make over $98,990 would not receive a stimulus payment.

Similarly, individuals who file jointly and make over $150,010 but less than $197,990 would also get a reduced payment and those who earn over that threshold would not collect a check.

These reductions also apply to the additional dependent payment. People who file as head of household are able to receive $1,200 up until $112,500, with a ceiling of $136,000 per year for any payment.

“This research brief, which first appeared in condensed form in The Institute’s Quarterly Economy Tracker, seeks to quantify the economic impact of this one-time stimulus on the region,” said Andrew Chew, The Institute Senior Research & Policy Analyst. “Household tax return data from the IRS was used to estimate the proportion of stimulus funding that households in Pennsylvania and Lackawanna and Luzerne counties will be entitled to, based on 2017 tax return data.“

Pennsylvania as a whole was estimated to receive an estimated 4.1 percent of the total funding allocation based on 2017 IRS data on households. Of the federal $290 billion allocation for CARES stimulus funding, this amounts to $11.8 billion. This averages out to about $919 for each Pennsylvanian.

“Lackawanna County residents will collect about $984 per person or $207.4 million, and Luzerne County residents will get a little more at $997 per person or $316.7 million,” Chew said. “The higher share per resident in the region is due to the smaller share of very high-income households in the two counties compared with the Commonwealth as a whole. Thus, a larger share of households qualify for the full stimulus payment.”

The nearly $525 million estimated to have been received by households in the two counties has likely been impactful in stabilizing the region’s economy and keeping some families out of poverty during the initial phases of the pandemic.

However, there could be a need for further financial support should the rise of cases (as of November 2020) necessitates further mitigation measures that disrupt income, especially as several pandemic safety nets are set to expire without Congressional action.

Institute Insights on COVID-19

According to Ooms, “The Institute realizes regional leaders will need reliable information, unbiased fact-based analysis, and real-time data to make the tough decisions necessary for a successful economic recovery. These decisions will need to be data-driven — and The Institute is answering the call.

Ooms said our region needs a well-defined path forward and she said she strongly believes that a comprehensive COVID-19 data and research initiative will be critical in this process.

Studies include research on the economy, workforce, business and industry, local government, education, housing, social services, health, and emergency planning are posted or in process.

The Greater Scranton Chamber of Commerce, Sordoni Family Foundation, and UGI Utilities along with the Luzerne County COVID-19 Emergency Response Fund of The Luzerne Foundation, Scranton Area Foundation’s NEPA COVID-19 Fund and Wells Fargo Foundation are the initial sponsors of this research.

The Times Leader will present several Institute studies over the course of the next few weeks. The original and complete Institute Insights on COVID 19 can be found here — https://institutepa.org/covid.php.

Additional information can be found on The Institute’s You Tube channel.