The city of Mountain View is looking to give low-income families $500 monthly checks with no strings attached, joining a growing number of cities across the country testing out a guaranteed basic income program.
The plan is to use $1 million in federal stimulus funds to launch a financial assistance pilot in the mold of Universal Basic Income (UBI), which has gained popularity in recent years as a means to help families in need. In sharp contrast to more rigid financial aid programs, the monthly cash can be spent however the recipient sees fit.
Dozens of cities across the country are considering similar programs, creating an "income floor" for residents to have more financial stability while paying for basic needs like housing and food. Though UBI was once a fringe idea, several recent studies have found promising results showing that a guaranteed income can improve employment and reduce financial dependence on friends and family.
City officials are proposing that Mountain View's guaranteed income pilot provide $500 monthly payments to extremely low-income families who are making less than 30% of the county's median income, along with custodial caregivers of children under 18 years old. Participation will be around 166 families for one year, which the city could extend to two years if it can find more money to pay for the program.
Census data shows there are roughly 6,500 families that would meet the program's income eligibility, currently capped at $49,700 for a family of four, as well as 1,000 households with children that are receiving cash-based public assistance including Supplemental Security Income. These families are more likely to reside in census tracts where the Latino population is higher and where COVID-19 cases have proliferated.
Most basic income programs rolling out in higher-cost areas are offering $1,000 a month to participating families, twice as much as what's being proposed in Mountain View. Last year, Santa Clara County launched a basic income program for young adults aging out of the foster youth system, providing $1,000 in monthly checks to 72 participants. The results have been positive enough that county supervisors voted in June to extend the program past its one-year life.
"The funding was critical intervention to prevent youth from destabilizing," said Jimenez Perez, the pilot's program manager, in a statement at the time. "It allowed many to stay in housing or stay in school. Now, the focus of the extra time granted by the extension is for them to really come up with a plan for long-term stability. This is a tremendous and important junction in their lives."
One participant in the county program said she was exiting the foster youth system around the time she needed to move out of her college dorm due to the pandemic. She said the extra cash from the basic income program helped her find a room and stay in the area to finish her degree.
Mountain View Councilwoman Margaret Abe-Koga proposed bringing a guaranteed basic income pilot to the city in April, suggesting that $1 million in American Rescue Plan Act (ARPA) funds go toward paying for the program. The City Council has approved earmarking the funds, and are scheduled to weigh in on the details of a basic income program at the Tuesday, Sept. 28, council meeting.
At the time, Abe-Koga said the funds could be a direct route to stabilizing families in need of pandemic relief, and that it could also be a long-term solution to helping those who are struggling to pay for housing. She said she has been interested in the benefits of a UBI program since former presidential candidate Andrew Yang made it a part of his 2020 campaign platform.
Yang spoke at a rally in Mountain View on Saturday, Sept. 25, to promote basic income programs and highlight Mountain View's proposal. He pointed to the groundswell of support for UBI -- which surveys show a majority of U.S. voters now back -- and growing evidence that the money is largely spent on necessities like housing, food and gas.
Though $1 million was earmarked for the program, the total cost is expected to be much higher.
City officials say the goal is to help residents pay for their basic needs and give them the financial flexibility they need to find full-time jobs, but it's also an opportunity to study how much of a difference the $500 checks can make. The proposal to be discussed Tuesday calls for spending an extra $250,000 to hire a firm that will research the results, surveying 110 participants as well as 132 nonparticipants as a control group.
City staffers believe another $150,000 will be needed to help nonprofits administer the pilot, and that up to $200,000 should be set aside to pay for a loss of safety net services. Participants who rely on public benefits such as CalWorks and Social Security may suddenly become ineligible with an extra $6,000 in annual income, and most cities testing basic income programs have a special fund to help offset those losses.
The total additional costs to launch the pilot are estimated to be between $500,000 and $650,000. The city is expected to seek out philanthropic funds to offset the costs of the program, and could ultimately tap into future stimulus money or the general fund to pay for it.