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Guaranteed income pilot program likely moving forward today

Thursday, May 5, 2022 by Jo Clifton

Despite the misgivings of at least two City Council members, some members of the public and criticism from the Austin American-Statesman editorial board, Council seems poised to move forward today with a contract to set up a guaranteed basic income pilot program. Mayor Steve Adler and Council Member Vanessa Fuentes are the primary sponsors of the program, which is a 12-month experiment to help 85 recipients by providing them with $1,000 per month.

One of the major questions about the program has been whether it would run afoul of the Texas Constitution. According to a ruling from the Texas Supreme Court, the city must show that its payment must “accomplish a public purpose, not benefit a private party.” In addition, the court has said the city must “retain public control over the funds to ensure the public purpose is accomplished and the public’s investment is protected,” and the city “must ensure that it receives a return benefit.”

Adler is well aware of the requirements. He provided a motion sheet for his colleagues on Wednesday, adding direction to City Manager Spencer Cronk on how to implement the program. The motion sheet, which the mayor posted on the City Council Message Board, says, “The final contract should achieve a defined city public purpose, including but not limited to economic development under Chapter 380 of the Local Government Code; ensure financial controls are in place to achieve its public purpose; and ensure the city receives a benefit that is commensurate with the expenditure of public funds.”

Attorney Bill Aleshire, who criticized the proposal when it came out in April, said he thought the mayor’s motion sheet “helped improve the legal position for the city to proceed with the program because it does attempt to declare a public purpose.” He said someone still might challenge the legality of the funding, though he does not plan to do so.

The motion sheet directs city staff to build upon existing processes for identifying households at risk of eviction and homelessness and to leverage what the city learned from the distribution of federal and state funds under the RISE program (Relief in a State of Emergency).

A memo from Brion Oaks, the city’s chief equity officer, notes that during the pandemic, the city distributed tens of millions of dollars in RISE funds, “and over 90 percent of these households reported that these funds went to basic needs, helping to ensure they were able to endure the economic impacts of the pandemic.” In planning ahead, the city has “identified homelessness and displacement as top 10 indicators for the success of the city. A guaranteed income program has the potential to positively impact outcomes in both areas,” Oaks wrote.

According to the memo, Oaks’ office has been meeting with the vendor, UpTogether, since December to learn about the vendor’s experience working on guaranteed income programs. Oaks said staff members have identified possible community partners to help identify and enroll participants, he said. Oaks wrote that the pilot project will be evaluated by the Urban Institute and laid out a number of metrics the city is seeking to impact. For example, financial stability is measured by a family’s ability to cover a $400 emergency and pay bills on time.

Although the memo provided considerably more information than Council had when the item was postponed in April, Council Member Mackenzie Kelly told the Austin Monitor she is still not ready to vote for the program.

“I still have some serious questions related to it,” Kelly said. “I know that each year it’s getting more and more expensive to live in Austin …. My rent just went up $500 a month. I understand how hard it is and I know how much it’s hurting people … but I still have questions about whether this is the right role of government. I wonder if there are better ways to do this. … Why aren’t we providing housing vouchers and utility vouchers?” She said instead of giving 85 families $1,000 a month, the city could cut the monthly payment to $500 and help 170 people.

Council Member Leslie Pool has also indicated that she would not be in favor of the program, though she will not be at today’s meeting.

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