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Wednesday, July 24, 2024 | Back issues
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California Lawmakers Approve Nation’s 1st Basic Income Plan

If approved by Gov. Newsom, California will be the first state to send unconditional monthly checks to residents. The $35-million plan will target former foster care children and pregnant Californians.

SACRAMENTO, Calif. (CN) — California will send monthly checks to adults exiting the state’s foster care system under a first-of-its-kind guaranteed income plan approved Thursday by lawmakers.  

The taxpayer-funded program will allow qualifying pregnant residents and those aging out of the foster care system —regardless of how much time they spent in the system — to spend the cash assistance freely. Monthly payments could range up to $1,000 and the multi-year pilot program carries a $35 million price tag.  

Modeled after similar guaranteed income programs implemented in Santa Clara County as well as the cities of Stockton and Oakland, the pilot could extend relief to approximately 2,500 former foster youth between the ages of 21-24.

Less than 24 hours after the bill landed on his desk, Newsom approved Assembly Bill 153 without a signing message.

State Senator Dave Cortese, whose guaranteed income proposal was folded into the budget bill approved Thursday, said the plan stands to lift Californians out of poverty.

“I’d like to thank my colleagues for partnering with me on this important work and investing in this concept that will uplift the lives of so many,” said Cortese, a democrat from San Jose. “I’m excited that 40 million Californians will now get a chance to see how guaranteed income works in their own communities”

Proponents on both sides of the aisle argued the funding will help a vulnerable subset of the population obtain jobs or housing by “empowering” those transitioning from foster care into adulthood to make their own financial decisions for the first time. They point to studies showing the no-strings-attached payments included in underlying programs have generated positive results.

For example, a recent review of a two-year guaranteed income pilot that provided randomly selected low-income city of Stockton residents with $500 monthly unconditional payments, found many recipients were able to find full-time work and showed less signs of stress or anxiety.

“The guaranteed income alleviated financial scarcity creating new opportunities for self-determination, choice, goal-setting and risk-taking,” states the analysis of the Stockton Economic Empowerment Demonstration.     

The lone bit of criticism came from the state’s minority party.

Republican Assemblyman Vince Fong said he was worried the program could cause recipients to forgo job opportunities due to the government support.

“This measure however includes a universal income pilot program, a concept that could undermine incentives to work,” said Fong, a Republican from Bakersfield. “We should be pushing policies that encourage the value of work.”

Former Stockton Mayor Michael Tubbs, who helped enact the program, applauded lawmakers for trying to take the monthly relief statewide.

“The Golden State will continue to lead the way,” Tubbs said on Twitter.  

Guaranteed income policies are gaining in popularity with politicians and mayors outside of California as well, with pilot programs recently approved in places like Tacoma, Washington, and New Orleans. According to Stanford University’s Basic Income Lab,  basic income programs have also either been proposed or are underway in Denver, Columbia, South Carolina, Gary, Indiana and Richmond, Virginia.

“The growth of income and wealth inequalities, the precariousness of labor, and the persistence of abject poverty have all been important drivers of renewed interest in universal basic income in the U.S.,” the university concludes.

Meanwhile the pandemic has spurred Congress and the Biden administration to agree on $100 billion in expanded child tax credits that started flowing to American families also on Thursday.

Currently in California, foster youth “age out” of the system on their 21st birthday and lose eligibility for a range of social services. Experts note the so-called “transition stage” often leads to high rates of homelessness among those fresh out of the foster system.

State Sen. Cortese’s plan mirrors a program enacted within his district in Santa Clara County which provides former foster youth between the ages of 21-24 with monthly payments of $1,000. The county issues prepaid debit cards which not only allow recipients without bank accounts to spend the money but give administrators a chance to study spending habits.  

Under the statewide model, the California Department of Social Services will administer the funds to municipalities in an “equitable manner” for both rural and urban applicants. The funding set aside in AB 153 expires in June 2026 and the department is required to issue a subsequent program analysis to the Legislature.  

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Categories / Financial, Government

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