Over 100 basic-income pilots have run in US cities. Now states are getting creative to fund no-strings-attached cash payments

Over 100 basic-income pilots have run in US cities. Now states are getting creative to fund no-strings-attached cash payments
Over 100 basic-income pilots have run in US cities. Now states are getting creative to fund no-strings-attached cash payments

By Allie Kelly

See original post here.

Michael Tubbs wants to turn basic-income pilot programs into long-term policy — and the movement may be making progress.

The 2019 pilot Tubbs launched as the mayor of Stockton, California, at the time offered 125 people $500 a month for two years. It’s often credited as part of the first of a wave of over 100 guaranteed basic income pilots that have launched across the US since then in cities from Durham, North Carolina, to Birmingham and the Bay Area.

“It was every single thing that I prayed for,” a Chicago participant, who used her GBI money to secure housing, told Business Insider.

Basic income has become a trending strategy to combat poverty in cities nationwide. The pilots typically offer participants cash payments of $100 to $2,000 for one to five years. They differ from traditional social services like SNAPMedicaid, or rental assistance because the programs place no requirements on how participants spend their money. Instead, families have the agency to choose what they need most.

Participants in programs like Stockton’s have reported using their cash payments to pay rent, buy groceries, afford prescriptions, drop second jobs, pay off debt, or support their children’s education.

“My life was always just a couple hundred dollars short,” a San Antonio participant recently told BI. “For the first time, I can breathe.”

Tubbs — who has since become the founder and chair of Mayors for a Guaranteed Income, a network of local leaders that advocate for GBI — said cities have “piloted themselves to a conclusion:” basic income works.

Now, he is looking toward the future.

“We have the data set, now it’s about political will,” Tubbs told BI.

Indeed, politics is one of the biggest threats to more widespread GBI, along with budget concerns. But, amid skyrocketing costs of living, nearly half of Americans are struggling paycheck to paycheck. Basic-income pilots in San Antonio, Denver, Seattle, and more have shown that GBI is a way to help low-income families build a stronger financial future — even if the aid is temporary.

Following a wave of city-level programs, community leaders and state legislatures are gearing up to take the movement to the next level.

“This is about yourself and your neighbors,” Tubbs said. “And this is a way to make sure that we live in a civilized place where everyone has a floor.”

It may also be possible to implement basic income-inspired policies beyond local programs. In fact, states like California and New Mexico are already trying. State-level policies could help ensure sustainable program funding and allow basic income to reach even more families.

These policies are likely to face barriers in state legislatures and budgets, but experts across the country are working on solutions.

New Mexico and California are case studies in state-level basic income

New Mexico and California are leading state-level basic income efforts and provide insight into potential longer-term policies.

In New Mexico, 330 low-income immigrant families across the state were given $500 a month for a year beginning in February 2022. Fifty randomly selected families had their cash payments extended for an additional six months. Results from the program show participants, who had mixed household citizenship status, used the money to pay for housing, and their children saw improved educational outcomes.

Marcela Díaz, executive director of Somos Un Pueblo Unido — the economic justice organization that administered the pilot — said the program allowed basic income to reach mixed-status immigrant families who are often left out of government assistance programs because of their citizenship status. The state-level scope of the program also helped more families in rural areas see benefits, she said.

“We thought: ‘let’s put together a pilot and see how it how these folks that are often excluded from all of these other cash benefits systems — that the rest of us are not excluded from — use that funding. How does it help stabilize their families?'” Díaz told BI.

California, too, has continued to be a national leader in basic-income research. In 2021, the state pledged $35 million for more GBI pilots over five years. This follows a series of basic-income programs directed toward low-income families, students, foster youth, and people experiencing homelessness that have already been piloted across the state in the wake of Stockton’s success.

“The lessons from those pilots are infusing the whole ecosystem of support,” she said. “People are really seeing the power of those pilots, and the power of giving people money and trusting them,” Teri Olle, director for Economic Security California, told BI.

The success of these programs is leading to legislation. A state-funded pilot cash program for people enrolled in workforce training programs passed in the New Mexico House in February.

A bill is also being heard in the California Senate that would provide guaranteed income for students experiencing homelessness beginning in August 2025.

Olle said there is much more “momentum” for basic income than there was five years ago. Even if future aid programs differ from direct cash assistance, she said lawmakers can learn a lot from GBI’s success.

“This is why putting pen to paper, and moving from pilot to policy, is such important work,” Olle said.

Budget limitations and Republican opposition to basic-income programs

Basic income is being challenged across the US by Republican lawmakers, who have called the programs “socialist” and say cash payments could make participants too reliant on government assistance.

The Arizona legislature is hearing a bill that could ban GBI, and South Dakota Republicans are hoping to prohibit all local governments from offering basic income. Iowa lawmakers banned GBI across the state in April.

“Is money a birthright now?” John Gillette, a representative in Arizona, previously told BI. “Because I think the Founding Fathers would say that is very contrary to our capitalist system and encouraging people to work.”

In Harris County, Texas, a GBI program was challenged by state Attorney General Ken Paxton, who called it “unconstitutional.” Although participants were scheduled to receive their first payments on April 24, Paxton’s lawsuit placed a temporary block on the program until it undergoes further review by the state Supreme Court.

Limited budgets could also hinder future basic-income programs. Most current GBI programs are funded through a combination of philanthropy, state tax dollars, and federal programs like the 2021 American Rescue Plan Act (ARPA) that is allocated to cities and states for post-pandemic economic recovery.

ARPA funds have been used to partially or fully fund most US basic-income pilots so far, but funds are set to expire. States and local governments must obligate all funds by the end of December 2024 and spend the money by December 2026.

According to Pew Charitable Trusts, budget deficits are growing in many states, which could make additional GBI funding difficult to approve. While philanthropy and nonprofit work have been central to basic-income pilots, they are not always a long-term or large-scale funding solution.

GBI can target the neediest populations, but it also has a ‘community effect’

Basic-income programs are already getting creative about how to make the biggest impact with limited funding. More GBI programs are electing to focus on specific groups of participants, like low-income parents with children and foster youth. By focusing on these specific groups of participants, programs can direct money that already exists in state and federal budgets toward basic income.

Tubbs also said this focused cash assistance allows municipalities to address other issues, like infant and maternal mortality rates or childhood poverty.

In Flint, Michigan, for example, the Rx Kids program is offering pregnant mothers a $1,500 lump sum payment in addition to $500 monthly during their baby’s first year. The program is funded through the Temporary Aid to Needy Families Program (TANF), an existing federal cash assistance program for low-income families. The cash payments are available to all new mothers in the city, no strings attached.

“It’s super efficient — you can administer it really effectively,” US Country Director for GiveDirectly Dustin Palmer said. A nonprofit, GiveDirectly has helped administer many US basic-income pilots.

While the child tax credit is not a GBI program, Palmer also called it a “compliment” to other cash assistance families might receive. The credit offers families thousands of dollars in tax breaks if they have dependent children. An expanded version of the credit passed in the House of Representatives in January, but is still stalled in the Senate.

Flexible funding programs like COVID stimulus checks, ARPA, and child tax credits let states innovate new programs that address poverty, Shafeka Hashash, associate director of Guaranteed Income at the Economic Security Project, told BI. There’s a reason basic income has “spread like wildfire,” she said.

“It opened the door for states to be able to demonstrate guaranteed income’s effectiveness, and for the federal government to take notice,” Hashash added.

Hashah said every community and family’s circumstances are different. However, guaranteed income has already been shown to have “far-reaching” impacts, helping families improve their housing situations, educational outcomes, job security, and quality of life.

“I wish that more people understood that guaranteed income has so much more than just an effect on one particular family, but it really has a community effect,” Hashah said.

GBI has offered insight into what economic help American families need most — and it should be applied to policy — whether it’s at the local, state, or federal level, Palmer said. He said the research on cash assistance programs shows the “tremendous upside” of giving low-income families the freedom to choose what’s best for them.

“This is a way of thinking about how we support families, children, all sorts of folks in a way that meets them where they are,” Palmer said.

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