Despite legal threats to a similar program in Harris County, Austin City Council members voted Thursday to finalize a $1.3 million contract with a nonprofit to run a program doling out cash to poor families.
About 100 low-income Austin families will receive $1,000 a month for the next year, with no guardrails on how to spend that money. Often called guaranteed or basic income, Austin piloted this program in 2022. Last year, council members set aside funding to continue the cash allotments but had yet to identify an organization to operate the program.
Thursday’s vote comes the same day a state district judge ruled against Texas Attorney General Ken Paxton in a case challenging a guaranteed income program in Harris County. Paxton last week sued the county, trying to block it from operating its program. Over a year and a half, Harris County would give $500 a month to roughly 1,900 families. The county planned to start the cash payments later this month.
Paxton called the program “plainly unconstitutional.” In his lawsuit, he argued Harris County’s program violates sections of the state’s constitution that prohibit giving government funds to private citizens without a clear public purpose and another guaranteeing equal rights.
Paxton is expected to appeal Thursday's ruling.
A legal challenge to guaranteed income programs in the state had felt inevitable for months. In January, state Sen. Paul Bettencourt, a Republican from Houston, asked Paxton to consider the legality of such programs, where public funds are given to households with no strings attached.
At least a handful of municipalities across the country run or have run guaranteed income programs in recent years, including Ann Arbor, Michigan, Cambridge, Massachusetts, and California's Los Angeles County. Backers of these programs say it’s a way to start closing the gap between the country’s wealthiest residents and its poorest. The U.S. income gap recently narrowed after widening for more than a decade.
As housing prices across the country have risen in the last several years, many guaranteed income program participants have increasingly put the cash they receive toward rent and mortgage payments. Recipients of Austin’s first round of cash payments say they spent more than half of the money on housing.
The City of Austin’s legal department believes the city is on solid legal grounds in re-establishing its guaranteed income program. In an analysis obtained by KUT, the city’s law department told council members this week that as a home-rule city, and not a county, Austin has a broader range of rights to enact a program like this. They also argue that surveys of participants show the program accomplishes a clear public purpose.
“I’m just not a fan of governing by fear,” Council Member Zo Qadri told KUT when asked if he was worried about opening the city to a lawsuit by approving this program. “I think we need to govern by making sure we need to do right by the most vulnerable and what brings us progress.”
The City of Austin has not said when it will begin giving cash payments to families. It will prioritize families facing financial hardship, including struggling to afford rent, mortgage payments or job loss. Rather than use an open application system, the city will rely on community organizations to identify families who qualify.
