Phoenix to test Andrew Yang's universal basic income idea in new federally funded pilot

One thousand lucky Phoenix families will get $1,000 in taxpayer funding a month in 2022 under a universal basic income pilot program.

The Phoenix City Council has approved the $12 million “Financial Assistance for Phoenix Families Program,” a lottery-based program that will begin in January 2022, if not sooner.

The concept of universal basic income was popularized during the 2020 presidential campaign by unsuccessful Democratic candidate Andrew Yang, who called it a Freedom Dividend,

The program will send 1,000 families a monthly stipend of $1,000 for all of 2022. According to a city document, the funds would be limited toward “basic household necessities” such as housing, childcare, food and other staples.

The city would load money onto a debit card that wouldn’t allow the purchase of a list of forbidden items like alcohol and tobacco.

All low-income families making up to 80% of the area median income – a sliding scale that would be just over $63,000 for a family of four – would be eligible. A representative of the city said in the Tuesday session that anyone on public assistance, in public housing, or receiving public housing vouchers would qualify.

“We’ve seen a lot of cities across the country doing this direct assistance and I’m glad that we’ll be joining them in giving money to folks,” Vice Mayor Carlos Garcia said. “It’s not just for rent or utilities, but if they do have child care needs, if they do have to get medicine, whatever it is, I think people know best what their needs are.”

The program is paid for by the federal American Rescue Plan Act (ARPA). The city received $196 million this year and will receive another $196 million next year.

City documents say staff would recommend continuing this program with the second payout of ARPA funds in 2023.

Council members Jim Waring and Sal DiCiccio voted against the measure.

Phoenix joins a handful of other cities to test out the premise of universal basic income. California’s most recent budget includes $35 million to pay for a similar program. The cities of Los Angeles, Compton and Richmond, Virginia, have approved similar programs.

The city of Chicago is considering a similar program.