St. Paul Mayor Melvin Carter signed an executive order last week officially authorizing the creation of the “People’s Prosperity Pilot,” a guaranteed-income program.
Carter announced his intention to launch a guaranteed-income program during his August budget address, but didn’t provide any more details at the time.
According to a city press release issued Thursday, the program will provide up to 150 St. Paul families with $500 per month in guaranteed income for up to 18 months. The projected budget for the pilot program is $1.5 million, of which $1.35 million will be used for direct cash payments to participants.
Funding for the program will come from the city’s share of CARES Act funds and the Mayors for Guaranteed Income national network.
“More than ever before, this economic crisis has pushed families into crisis, struggling to maintain basic necessities for their children,” Carter said in a press release. “This demonstration pilot is an exciting new approach to support our most vulnerable families while helping build the case for permanent guaranteed income programs at state and federal levels.”
The Office of Financial Empowerment will randomly select 150 participants from families that are already enrolled in CollegeBound St. Paul, another of Carter’s ideas that seeks to create a citywide college savings account.
Carter’s office said eligible families will come from the city’s “most racially diverse and lowest wealth neighborhoods.” Households that are selected to participate in the program must have one parent or guardian of a CollegeBound St. Paul beneficiary, demonstrate a coronavirus-related “adverse financial impact,” and can’t be a public office holder or city employee in St. Paul.
Participating households will be provided with a U.S. Bank Focus Card, which is how they will receive their monthly cash transfers. They also must agree to “provide transaction information about expenditures on the Focus Card” to help with evaluation of the program.
The city said it’s currently working to determine “tax implications for participants and is pursuing an income and asset exclusion from the State of Minnesota to minimize impacts on public benefits.”
“The divide between the ‘haves’ and ‘haves-not’ has never been more clearly on display. In our rich, developed nation, billionaire employers hire people at poverty wages and government programs are errantly designed to keep people stuck in low wage jobs with no path upward,” St. Paul City Council President Amy Brendmoen said of the new program.
“The guaranteed income pilot program gives us an opportunity to directly impact our most vulnerable community members by leveraging private partnerships and non-local funding sources,” she added. “It is my hope that this 18-month test will demonstrate a new approach that can be taken to a broader level.”
A global pandemic combined with what Carter called the “most destructive night in city history” has resulted in a $19.5 million budget deficit for the city for 2021.