(The Center Square) – A $1.69 million guaranteed income pilot program will launch in Durham County later this year, but policy experts contend the program and others like it are unsustainable long term without significant taxpayer contributions.
The Durham County Board of Commissioners unanimously approved a DoCo Thrives pilot program last week. It provide 125 families with $750 a month, along with another $100 a month for completing surveys about the program. A control group of 125 will receive $100 monthly for completing surveys to study the outcomes.
The program, funded by American Rescue Plan Act federal pandemic relief, is limited to families with minor children and will run for two years, with applications starting later this year. While the program is modeled after a guaranteed income program in Stockton, California that launched with private funding in 2019, it’s one of numerous similar programs that have sprung up in places like Chicago, Baltimore, Richmond and New Orleans, many utilizing federal COVID-19 funds. Similar programs have been tried in Finland and Germany.
DoCo Thrives is the second guaranteed income program in Durham County, following another that offered $600 a month to more than 120 formerly incarcerated individuals in the city of Durham that concluded in February. City officials expect to continue that program with a $1 million appropriation in the city budget, and are studying the results of the first round.
Durham County commissioners cited a surge in families receiving federal food benefits, and pointed to a need for housing and food assistance for families struggling in the wake of the pandemic for launching DoCo Thrives.
Proponents of guaranteed income argue the money helps improve participants’ job prospects, financial stability, and overall well-being. A study by the Stockton Economic Empowerment Demonstration found the program started there by then-Mayor Michael Tubbs increased employment, productivity and well-being, while reducing stress and allowing participants to pay off debt.
“We have to advance health equity in a way that honors people’s dignity and acknowledges their inherent worth,” said Judy Belk, CEO of the California Wellness Foundation that funded the Stockton initiative. “The guaranteed basic income does that. No-strings-attached, direct cash aid works. It eradicates poverty, while respecting people’s autonomy and agency to make the best financial decisions for themselves and their families.”
Other studies from the Mercatus Center at George Mason University that looked at universal basic income, which is targeted more broadly beyond low-income residents, found the costs outweigh the benefits.
David McGarry, policy analyst with the Taxpayer Protection Alliance, says government run basic income programs often run into bureaucratic barriers and unforeseen roadblocks, while doing little to help participants long-term.
“There’s a very large question about how these programs continue … after that federal money runs out,” he said. “If localities want to continue this and continue on this scale, it’s going to be a big burden on taxpayers.”
The Alliance, he said, advocates instead for local governments to eliminate regulatory barriers that prevent residents from securing basic jobs, such as excessive occupational licensing requirements and regulations “that prevent people from running a business out of their own homes.”
“While they often sound good on paper, they create an incentive structure that doesn’t actually help people get out of poverty,” he said of guaranteed basic income programs. “There are a lot of things state and local governments can do with deregulation that will benefit people a lot more in the long term, and save taxpayers a lot of money.”
CATO state policy analyst Marc Joffe offered a similar take.
“This is being funded with American Rescue Plan Act money and that has to be spent by 2026,” he said, “so then what?”
Tying the income to work or training requirements would better help participants develop skills they can use to make a living once the money runs out, he said, because “these types of programs are ultimately unsustainable.”
“North Carolina has a very robust economy, so a lot of local governments can afford luxuries like this,” he said. “But taking on these programs makes it hard to right size government when tax revenues don’t perform as hoped.”
Urban Reform Institute President Charles Blain, from Houston, agrees “these programs are well-intentioned but are not sustainable long term” because federal relief funds or charitable donations funding them “are both finite resources.”
“At some point, officials who rolled these out and seek to keep their constituents happy will attempt to shift funding … to general revenue and all taxpayers will be more directly on the hook for them,” he said, adding that the shift will create competition with other important issues. “Local jurisdictions should be more focused on scaling back the scope of government, assessing development regulations that drive up the cost of housing, and creating an environment that allows for economic growth, all issues that help alleviate the burden of cost of living increases.
“These programs allow them to avoid doing the hard work,” Blain said.
The California Wellness Foundation and Silicon Valley Community Foundation, which have helped fund some of the programs, did not return messages seeking comment. Mayors for a Guaranteed Income, which helps to coordinate many of the U.S. based programs, responded to a request for comment but did not have anyone available.
