Income

Austin approves pilot program to provide guaranteed income to low-income families

The Austin City Council has approved a taxpayer-funded pilot program to give select families and individuals $1,000 a month for an entire year — with no strings attached.

The city is partnering with California-based nonprofit UpTogether to distribute more than $1.18 million to 85 families and individuals struggling to make ends meet. The goal of the guaranteed income program would be to help with utility payments, rent, childcare, or other out-of-reach necessities.

The city’s Equity Office and the Urban Institute, a DC-based think tank, will study the program’s effectiveness. After the one-year pilot project, the city could repeat the program.

A vote on the measure was postponed until late last month after legal and financial concerns were raised. Opponents argued that the program’s lack of clarity about what participants could spend was tax-debatable — and not legal under state law.

So the board went back to the drawing board.

The Equity Office this week proposed some safeguards for the program, namely reducing who would qualify. Recipients would have had to show they were at risk of eviction, struggling to pay their utility bills, or qualifying for supportive housing for people exiting homelessness.

Prior to the vote, Austin Mayor Steve Adler pushed back against the claim that the program was a “gift,” arguing instead that Austinians should view it as “an investment.”

He also said the program would focus more directly on preventing homelessness, citing skyrocketing housing costs in Austin and ongoing affordability issues. He said the program would give households more flexibility than other social service programs with stricter spending rules.

Adler also pushed back against arguments that the lack of spending guidelines could result in the misuse of taxpayers’ money.

“I’m put off by the rhetoric that this is a giveaway,” he said. “I just think it’s so misleading and so wrong and demonstrates a lack of understanding.”

Although the measure passed, District 10 council member Alison Alter expressed some opposition. She said she understands the need for the program, but the city should focus on basic living wages. Austin is currently locked in tense labor negotiations with first responders and struggling to staff lifeguard positions.

“It’s not a decision I take lightly,” she said. “I believe we need to invest in people and their basic needs, but I’m not sure that’s the right way today, given the current situation.”

District 6 council member Mackenzie Kelly, who expressed reservations about the program last month and lobbied to delay its approval, was not present at Thursday’s meeting; Neither does District 7’s Leslie Pool.

UpTogether recently concluded a similar privately funded Guaranteed Income pilot project. It was also used to administer the city’s COVID relief program.

At a press conference ahead of the vote, Ivanna Neri, partnership director for UpTogether, said preliminary results from the privately-funded pilot show that all 125 participants had spent their allowances on necessities.

“Each person used the money to pay for their basic needs, including rent, mortgage, groceries, clothes, gas — things we all need,” she said. .

Neri added that the program also allows people to save and pay off debt. More than half of the 125 participants were able to repay three-quarters of their debt, she said, while a third fully repaid their debt.