State, local guaranteed income programs set the stage for federal action

As momentum for guaranteed income programs builds at the state and local level, experts say it could help move the needle toward more supportive programs at the federal level.

More than 100 cities across the U.S. have implemented or are implementing the no-strings-attached cash initiatives, through which participants temporarily receive regular cash payments to use at their own discretion. And the body of research showing that they work to address poverty and improve outcomes is growing.

In Shreveport, Louisiana, for example, a cash payment initiative helped participants reduce their food insecurity and stress, according to a study released last month by Mayors for a Guaranteed Income. Under the program,110 families led by single parents or guardians received $660 per month for a year from March 2022 to February 2023. The vast majority of participants were women of color with an average household income of $12,435.

Participants reported they had more time for self-care and were able to use the payments to better meet their children’s needs, like new school uniforms, haircuts and supplies.

Other studies have shown that the programs can help people obtain more stable housing, spend more money on health care, and better prepare their children to thrive later in life.

As more evidence indicates the effectiveness of basic income programs, said Michael Tubbs, founder of Mayors for a Guaranteed Income and former Mayor of Stockton, California, more states have created permanent funding for such programs.

California, for example, in 2021 became the first in the nation to approve state funds to support a guaranteed income program aimed at serving pregnant people and young adults who have aged out of foster care.

Tubbs also pointed to Minnesota, where beginning in 2023 families were eligible for a child tax credit of up to $1,750 per child, with no limit on the number of children claimed. Child tax credits, he said, operate similarly to guaranteed income programs.

This summer, Gov. Tim Walz announced the state’s child tax credit had helped put more than $545 million back into the pockets of more than 215,000 families. Beginning next year, the Minnesota Department of Revenue will allow taxpayers to receive advance payments throughout the year instead of waiting for a lump sum after filing their returns.

Walz is also the running mate of Vice President Kamala Harris, who has signaled her intention to expand and restore the federal child tax credit throughout her campaign. Last month, for example, the Democratic presidential candidate proposed a $6,000 tax credit for parents of newborns as well as restoring the pandemic-era child tax credit, which gave parents up to $3,000 for children older than six.  

While Republican candidate and former President Donald Trump has not announced a specific tax plan yet, his running mate Ohio Sen. JD Vance has floated the idea of expanding the federal tax child credit to $5,000 for all American families.

During the pandemic, however, Trump approved individual stimulus payments. While the payments weren’t exactly the same as guaranteed income programs, it suggested the former president was open to using cash distributions to help people in financial crises, said Ashley Burnside, senior policy analyst at the Center for Law and Social Policy.

“I do think it shows this increasing awareness of how beneficial providing cash can be to families,” she said, adding that federal lawmakers could look to state and local governments for successful models. 

In early 2024, for instance, U.S. Rep. Morgan McGarvey, D-Ky., introduced the Young Adult Tax Credit Act. Similar to the pilot program in New Orleans, the federal act would establish a nationwide monthly payment system for people aged 18 to 24 in an effort to help young adults start to build wealth and better afford necessities like housing.

“Young adults are often left out of existing anti-poverty program benefits, and they’re likelier to be working in jobs that pay low wages and to be facing poverty just because they're earlier on in their careers,” Burnside said. “They may not have the financial safety nets that people of older age brackets do.”

Burnside also pointed to the Guaranteed Income Pilot Program Act of 2023, sponsored by U.S. Rep. Bonnie Watson Coleman, D-N.J., last September. The act would create a three-year nationwide program to provide monthly payments—equal to the rent of a two-bedroom apartment in the recipient’s ZIP code—to 20,000 people aged 18 to 65 across the country. If passed, the act could also help create comprehensive, nationwide data on guaranteed income programs, she said.

A federal payment program would ensure that “throughout the nation, people have access to a [guaranteed income] program, regardless of what their state is doing,” Burnside said.

Some state lawmakers, for example, have moved to ban or restrict the local implementation of income pilot programs using public dollars. In 2024, Idaho, Iowa and South Dakota banned local governments from creating guaranteed income programs.   

“Congress has an exciting opportunity in the years ahead to … take lessons learned from the local and state guaranteed income pilots,” she said, “and think about how to implement them in a federal bill.”