three children sitting on grass
It was late 2020 and the pandemic was in full swing. Ingrid Sullivan was still navigating the consequences of her divorce when she caught COVID-19 and lost her job. The mother of four needed a hand.
Sullivan applied for financial aid from the city of San Antonio and received about $5,000 over two years. She used the money to fill her gas tank and pay her car insurance. Sullivan said the funds allowed her to land a higher-paying job and move from an apartment into a house.
“I just ran with the help I had and stabilized my family, and now we are in a very stable position in life,” she said.
The city didn’t ask Sullivan for anything in return. The aid was part of San Antonio’s Two-Year Fund, a so-called guaranteed income program that gave money to low-income households with no strings attached. The pandemic relief program ran from 2020 to 2023.
Guaranteed income programs have become more popular since the pandemic as dozens of cities across the country launched pilot programs using federal COVID-19 relief funds. Whereas other welfare funds like food stamps and housing vouchers provide assistance for specific expenses, guaranteed income programs allow recipients to decide how they spend the money. Researchers have found them to be an effective way to combat poverty.
In recent years, a handful of Texas cities and counties have piloted their own guaranteed income programs for low-income households. Financed by a combination of federal, local and philanthropic funds, Austin, San Antonio and El Paso County have collectively issued about $9 million in payments to roughly 1,500 households since 2020.
But the notion is facing stiff opposition from conservatives who say these programs are a bad use of taxpayers’ money and amount to government overreach. Attorney General Ken Paxton recently sued Harris County to block its guaranteed income program, Uplift Harris. The Texas Supreme Court indefinitely paused the pilot while the case goes to trial. Financed by funds from the American Rescue Plan Act, the program would have provided almost 2,000 households in the area’s poorest neighborhoods with $500 a month for 18 months.
Proponents say the “no strings attached” aspect of guaranteed income programs makes them particularly effective. Recipients are allowed to prioritize what they want to spend the funds on, which could include costs that other welfare programs do not cover. The Urban Institute found that people who participated in Austin’s pilot program, which ran from 2022 to 2023, spent 58% of the money on rent and the rest mostly on basic needs and utilities.
Anti-poverty initiatives traditionally have specific objectives, such as increasing house ownership or providing workforce development, but guaranteed income programs enable households to decide what’s the best way for them to build wealth, said Jesús Gerena, CEO of UpTogether. UpTogether is a California-based nonprofit that plans guaranteed income funds across the country and has helped organize four in Texas so far.
“We need to stop thinking that we have to come up with an answer [for] people, but that people have the ability to [come up with answers] themselves,” Gerena said. “We've been able to demonstrate that over and over and over again.”
When evaluating the guaranteed income programs, policymakers are often concerned there is not a strong relationship between giving people funds and an increase in employment, according to Mary Bogle, a researcher at the Urban Institute who analyzed Austin’s pilot program.
Bogle instead emphasized the almost guaranteed positive effect that direct cash programs have on the children in participating families. For example, she said the federal Child Tax Credit, which acts like an annual guaranteed income payment, cut child poverty in the United States by 43% in 2021. Bogle pointed to research that shows increases in household income improve future employment opportunities for children, which helps break the cycle of welfare.
“Researchers and I often say to one another, ‘Why are we still studying this? It’s a settled case,’” she said. “It is the most evidence-based thing you can do to improve outcomes for individuals and families.”
Across the country, several states have moved to pass laws that restrict local governments from implementing guaranteed income programs. In Paxton’s suit against Harris County, the attorney general argues its guaranteed income program would give recipients money without any accountability and that there is no “reasonable expectation of a general benefit from the program.”
Paxton accused Harris County of violating a state law that says governments cannot use public money for private purposes. To qualify as a public purpose, a program must demonstrate that the funding is used to meet specific goals for the good of the public and not for the benefit of private parties, among other requirements, said Randy Erben, adjunct professor at the University Texas School of Law.
Opponents also criticize guaranteed income programs for excessively expanding government spending, a traditional conservative concern. Guaranteed income programs increase government involvement, which raises the burden on taxpayers, according to James Quintero, policy director at the Texas Public Policy Foundation. Quintero argued local governments should focus on providing core services like public safety and transportation infrastructure.
“Every dollar that those recipients spent was taken away from somebody else,” Quintero said. “It's not an appropriate role for government to simply be a redistributed mechanism that takes from some and gives to others for no good reason.”
Discussion in Texas over guaranteed income programs could intensify next year, as Lt. Gov. Dan Patrick included the use of federal funds by local governments in his list of priorities for next year’s legislative session.
Sullivan said these kinds of programs can be effective in helping people who, like her, had a brush with poverty due to unforeseen events, not from a lack of determination.
“A lot of legislation believes you’re given a handout, but really it’s a hand up for the person that already has a plan,” Sullivan said. “I’ve always had a life plan. I didn’t plan for divorce. I’m college educated. I just was in poverty due to my circumstances.”
Disclosure: Texas Public Policy Foundation has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.
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This article originally appeared in The Texas Tribune at https://www.texastribune.org/2024/06/10/texas-guaranteed-income-programs/.
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