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St. Louis could use pandemic relief funds to kickstart guaranteed basic income pilot program

A plan before the Board of Aldermen could spend $5 million in American Rescue Act Plan funds to dole out $500 monthly cash payments to parents living in poverty.

ST. LOUIS, Missouri — More than 400 parents living in poverty could soon see direct cash payments from the city of St. Louis for at least a year and a half under a new proposal under debate at the Board of Aldermen.

The program is slated to last for 18 months. If it succeeds, Mayor Tishaura Jones has suggested it could expand to become a broader part of the city's official policy to combat poverty.

Jones has signed on as one of dozens of "Mayors for a Guaranteed Income." Cities like Los Angeles, Chicago, Denver, San Francisco and New Orleans have already launched similar cash giveaway programs, some of them doling out as much as a thousand dollars a month in unconditional cash payments to qualifying residents. 

The advocacy group, which enjoys backing from billionaires like Michael Bloomberg and former Twitter CEO Jack Dorsey, calls those cities "laboratories of democracy," and encourages other cities to follow suit.

Over the years, a universal basic income has been proposed by Republicans like Richard Nixon, libertarian economists like Milton Friedman and independent politicians like Andrew Yang, in part as a method to create an off-ramp to help wean people in poverty off of other costly government programs. 

Census data shows nearly one in five people in St. Louis, or roughly 57,400 residents, live in poverty. That's nearly twice the national average. 

Several progressive members of the Board of Aldermen have signed onto Jones' proposal as a way to lift some people out of poverty. The proposal cleared an initial hurdle before the Board of Aldermen on Friday and faces a final vote on Tuesday morning. 

"An extra $500 in a family's hand every month will make the difference on how they take care of budgeting their bottom lines," Alderwoman Shameem Clark Hubbard told 5 On Your Side Sunday afternoon.

The $5 million plan is tucked inside Board Bill 116, a $52 million spending plan that carves up federal American Rescue Plan Act funds. 

Critics have raised concerns about a lack of transparency in how that money might ultimately be spent. 

"This is a $52 million bill and $47 million of the spending is pretty much completely agreed upon," Alderman Tom Oldenburg said. "It's this $5 million that we really want to give a little bit more scrutiny to."

Oldenburg voted against the measure on Friday and urged city leaders to explore other avenues to combat poverty. 

"We're just giving cash away with no parameters of what happens to it," he said. "We should at least measure the impact. I would argue $1 of federal tax dollars should be scrutinized. This is $5 million. And we have no idea where it's gonna go."

"Why have strings attached or something like this? There's strings attached on so many other programs," bill sponsor Clark Hubbard said. 

"I believe in a responsibility of the families making a choice of what they wanted to do with this money," she said. "Instead of negatively trying to maybe judge what a person would do with it, I think we should focus in on the possibility of what a family could do with an extra $500 in their bottom lines of budgeting every month."

Under the proposal, the funds would only be issued to qualifying parents with children under age 18 in households at or below 170% of the federal poverty line. That means a single parent earning less than $31,127 or a couple making less than $39,151 could qualify. The families would have to report the additional funds as income, according to Clark Hubbard. 

Oldenburg suggested a smarter policy would use those funds to build long-term wealth for families in a home or some other asset.

"We want to help the poorest in our city without a doubt," he said. "I happen to believe that that can be done more systematically through homeownership and not just a cash giveaway."

Clark Hubbard said a policy that includes no strings attached gives families flexibility, and could still have the same ultimate effect. 

"How do we not know that they will put their $500 towards homeownership?" she responded. "How do we not know that that $500 could take the relief off of something else could build them up to where they build their credit up to where they can apply for homeownership?"

The group "Mayors for a Guaranteed Income" call cities like LA, Chicago, Denver, San Francisco  "laboratories of democracy"

They've already launched similar cash giveaway programs, some of them doling out as much as a thousand dollars a month. 

Billionaires like Michael Bloomberg and Twitter founder Jack Dorsey are funding the initiatives. 

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