The city of Madison has launched its new guaranteed income pilot program, which will provide 155 families $500 a month for a year.
The program, called the Madison Forward Fund, comes at no cost to taxpayers and is fully funded entirely by charitable donations.
The cash payments are aimed at supporting financial stability for low-income residents and are “unconditional, with no strings attached and no work requirements,” Mayor Satya Rhodes-Conway said at a Tuesday press conference.
“A guaranteed income is meant to supplement — not replace — the existing social safety net and to be a tool for racial and gender equity,” Rhodes-Conway said. “This program is founded upon the belief that the people in poverty are best positioned to make informed financial decisions that efficiently address their household’s needs.”
Guaranteed income pilots are being tested across the county in cities like Pittsburgh, St. Paul, Santa Fe and Richmond, Virginia.
The idea is simple but controversial. People receive a set amount of money periodically with no conditions. Proponents of the concept believe guaranteed incomes give recipients — often in the most marginalized groups — freedom to spend it in ways most beneficial for their families. Critics call it a handout.
Blake Roberts Crall, the program manager for the Madison Forward Fund, contended that some skepticism of the program is ingrained in society.
“In our culture, there's a lot of distrust around giving money to (lower-income) people, so I think that's a concern that people have, that they're going to spend this irresponsibly,” Roberts Crall told the Cap Times. “There's a lot of data from other cities that have shown that’s actually not the case. Generally, people spend this money on basic human needs, like rent, utilities, gas, transportation, child care.”
Making ends meet
The Madison Forward Fund aims to help families who are struggling to make ends meet, especially with high inflation costs across the country.
“We know that monthly cash aid can help families access healthy food, buy school supplies or even get a better job,” Rhodes-Conway said. A guaranteed income can also improve the mental and physical health of recipients, she added.
Any Madison resident is eligible to apply as long as they have a household income less than 200% of the Federal Poverty Line, at least one child under the age of 18 living in the household and are permanent residents of the city.
For a family of three, the household income would be at or below $46,060. For a family of four, it's $55,500.
The selection process is random, Robert Crall said, and families will be notified if they have been chosen by mid-July. The first payments are expected to begin in late summer.The monthly income comes with flexibility; it could be distributed onto a debit card that can be used as-is, transferred to another bank account or withdrawn as cash.
Roberts Crall explained that flexibility, overall, is the goal. The program is an experiment for now, and is more dynamic than other public assistance programs.
The city is focused on the pilot program this year but is open to future conversations about extending the program further, perhaps to different segments of the community, according to Rhodes-Conway.
On this local scale, the hope for Roberts Crall and the Madison Forward Fund is to be able to collect data and evidence to show the impact guaranteed income programs can have on families, and then use that data down the road to advocate for a national guaranteed income program.
“It’s not just about providing people support, it's about this bigger policy movement,” Roberts Crall said.
Already, Roberts Crall has received many calls from people who are interested in the program. The need is there, she said, but the key to expanding more is funding.
“In Madison, it's all privately funded, so that's great for this one time, but it's not necessarily a sustainable solution,” Robert Crall said. “It could be, but really the goal is to have it be through legislation, and funding is the big key.”
In June 2020, Rhodes-Conway became one of the first 15 Mayors in the country to join Mayors for a Guaranteed Income, a coalition of cities across the United States focused on ending poverty by advocating for guaranteed income policies.
A lot has changed since then, the Madison mayor said. Low-income families have weathered the storm of the COVID-19 pandemic but with federal aid programs ending, now families are getting “pummeled” by inflation and the childcare shortage.
“This is why guaranteed income is so critical. You never know what the future will bring and our most vulnerable families deserve sustained, flexible support,” Rhodes-Conway said.
Now, Mayors for a Guaranteed Income has over 80 cities involved. The Madison Forward Fund is partnered with the coalition along with the University of Wisconsin Institute for Research on Poverty and the University of Pennsylvania's Center for Guaranteed Income Research.
The city of Madison created a Guaranteed Income Program Advisory Task Force in March 2021 to provide guidance and develop recommendations for program staff. Ald. Jael Currie, District 16, serves on the committee and is also a social services provider.
Currie argued that guaranteed income will help reimagine and rethink economic structures, as opposed to the “archaic, one-size-fits-all approach” often provided in human and social services.
“Poverty is not a personal failure, and eliminating poverty is a community responsibility,” Currie said at the press conference. “Providing unrestricted guaranteed income strays from the historic approach of dictating how, when and what terms individuals can build their lives. This is a key component of empowerment.”
The application is available from June 21 to July 3 and can be completed online or by phone.