Local California Governments Can Start Up Universal Income Programs Under Newsom Proposal

California's new budget proposal could open the door for cities to implement new programs to help the poor.

Governor Gavin Newsom's budget proposal, which he announced Friday, includes $35 million over five years to pay for "universal basic income pilot programs."

The plan would not create a statewide guaranteed income program but instead would help pay for local governments to start their own initiatives to target low-income families. Local governments would help pay for the program through taxpayer dollars or private donors.

For more reporting from the Associated Press, see below.

Gavin Newsom Budget Income Programs
California Governor Gavin Newsom wants to use a portion of the state's surprise budget surplus to help pay for guaranteed income programs. Former Stockton Mayor Michael Tubbs revived interest in the idea when he launched a privately funded local program in 2019. Above, Tubbs (left) discusses his city with Newsom during a visit to Legendary Coffee and Books in Stockton, California, on June 4, 2020. /Rich Pedroncelli/AP Photo

It's believed to be the first statewide funding for such programs, which are gaining traction in cities.

The idea has been around since at least the 18th century. Even the U.S. government experimented with it in the 1960s and 1970s under President Richard Nixon. It's gotten new life in recent years thanks to former Stockton Mayor Michael Tubbs, who launched a privately funded guaranteed income program in his Northern California city in 2019.

Since then, mayors across the country have started their own programs, including one in Oakland earlier this year that pledges to give up to 600 families $500 each month. Last month, Los Angeles Mayor Eric Garcetti announced the city would spend $24 million to provide $1,000 per month to 2,000 households a year with "no questions asked."

The state proposal is a milestone for Tubbs, who has said guaranteed income programs will work long term only if they are run by the federal government. His goal has been to demonstrate that these programs work in the hopes of convincing Congress to pay for one nationwide.

Getting state funding to commit to those programs is a big step toward that goal, as until now most of these local programs have been privately funded.

"This support from [Newsom] for local governments to test ideas to strengthen our safety net, provide economic security, and end poverty is needed to truly make the golden state golden for all," said Tubbs, who lost his re-election bid last year and joined the Newsom administration in March as an unpaid special advisor.

Critics of these programs say they offer a disincentive for people to work. That narrative has played out over the past year as the federal government has increased the amount of monthly unemployment benefits during the pandemic. Employers have reported labor shortages as the economy reopens, blaming the increased benefits for preventing people from seeking work.

But an independent review of the guaranteed income program in Stockton found full-time employment increased among people who got the money during the first year of the project. At the start, 28% of people who got the money had full-time jobs. After one year, 40% did.