Here’s how some Johnson County residents spent $1,400 pandemic assistance payments

Four years ago, Johnson County local government entities came together to fund one-time checks to low-income residents who’d been negatively impacted by the COVID-19 pandemic.

The results of a study undertaken by the University of Iowa show how the money was used by the 2,242 Johnson County residents who received the payments.

Background

In 2022, the Johnson County Board of Supervisors approved creation of a direct assistance program that used money from the American Rescue Plan Act to provide qualifying residents with a one-time check for $1,400.

The program had around $3.5 million available, enough for nearly 2,500 households, after Johnson County and the cities of Iowa City and Coralville pooled some of their federal pandemic aid.

The funding was advocated for by the Iowa City-based nonprofit Escucha Mi Voz, which argued that immigrant workers had been disproportionally impacted during the pandemic and direct cash assistance would help them with rent, utilities and groceries, among other expenses.

The Direct Assistance Program provided the payments to 2,242 households throughout 2022. To be eligible for the program residents had to live in Johnson County since March 1, 2020, meet certain income restrictions, and demonstrate a financial hardship related to the COVID-19 pandemic.

It was the first program of its kind in the state.

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What’s happened since

Iowa Social Science Research Center conducted a study, funded by the Johnson County Board of Supervisors, that examined how Direct Assistance Program recipients chose to use their $1,400 payments.

The study found that the majority of recipients spent the assistance program funds on debt payments, auto repairs or transportation costs, housing, food and other recurring bills. Only about 5 percent of those surveyed saved the money.

“I think basically what it shows is, or what it suggests is, that people have a wide variety of needs, they were able to spend the money in ways that most directly met those needs at the time,” said Dave Frisvold, an associate professor of economics at the University of Iowa. “I think realistically, that's what you'd expect would happen but there might be some people that were not sure as to how the resources would be spent.”

The survey was mailed to residents one to two months following the receipt of the assistance checks. Over 45 percent of recipients responded to the survey, with 823 surveys completed in English and 192 completed in Spanish. Frisvold said 45 percent is considered a high response rate for studies of this nature.

According to the survey responses, $1,400 was equivalent to about 84 percent of recipients’ total monthly income.

“It was a significant amount that for many recipients, would have basically provided the equivalent of more than one month's worth of rent,” said Frisvold.

Frisvold got involved in the study in part to examine different types of government assistance. Typically, government assistance programs such as SNAP or WIC are restricted in what recipients can use them for. Johnson County’s Direct Assistance program was different in that recipients could use the money for whatever they wanted.

“Generally, you would think, if it's individuals who can decide what's in their best interest that they might be best off just receiving a check rather than being restricted in how they can use the assistance,” said Frisvold. “But that's not necessarily the way things tend to be, that's not the primary form of systems in the U.S. And so I think there's been this ongoing question of is that maybe an alternative way that might be better for individuals.”

Comments: megan.woolard@thegazette.com

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