The city of El Paso may soon begin doling out $500 in cash every month to dozens of households across the city – if the city can find $500,000 to fund the program and City Council approves the pilot.
Some City Council representatives are trying to get El Paso to experiment with a so-called guaranteed income program, which is based on the idea that the best way to alleviate poverty is to simply give out cash monthly to low-income households. Ideally, guaranteed income gives residents the ability to improve their financial situation however they need to, without restrictions on how to use the cash.
The proposed guaranteed income program “offers a lifeline to those who are struggling to make ends meet,” said District 8 city Rep. Chris Canales, who backed the proposal along with District 2 Rep. Alexsandra Annello. District 1 Rep. Brian Kennedy voted against moving forward with the cash assistance proposal.
The pilot program was discussed by the City Council on Oct. 10. After the discussion, the council directed its staff to see if the city can find the funding to start the program. The guaranteed income proposal will be brought back to the council in early November.
If the city can carve out $500,000, the money would fund $500 monthly cash payments to around 80 El Paso families for a year. To be eligible, a recipient must have a household income that’s equal or less than 80% of the local median income, which was more than $51,000 per household in 2021, according to the U.S. Census Bureau.
City Council representatives originally planned to fund the cash assistance program with $500,000 from the federal American Rescue Plan Act that Congress passed in 2021 in response to the pandemic. El Paso’s city government received around $150 million of ARPA funds, but all of the money has been directed to other programs or projects, said Robert Cortinas, the city’s chief financial officer. The final bit of the federal funds were used to purchase Morehead Middle School and convert it to a migrant shelter.
“The council did direct them to find the money, so I am hoping that they do,” Annello said in an interview Thursday. “I’m really open to what that source of funding is, and I trust the staff to say ‘We think this is the best use.’”
Dozens of cities across the U.S. have conducted similar guaranteed income pilot programs, which typically start by establishing a pot of money from philanthropic donors – or, in some cases, with public dollars – that’s drawn from to dole out cash payments to enrolled families.
The Harris County Commissioners Court voted in June to begin giving $500 each month for 18 months to up to 1,500 families living below the Federal Poverty Level – which in Houston is up to approximately $40,000 for a family of four.
“Decades of neglect, inequity, and discrimination have financially destabilized generations of Harris County families, perpetuated poverty, and created unfair barriers to prosperity,” Harris County Commissioner Rodney Ellis told ABC-News.
However, the idea is still in the pilot phase in several cities and counties throughout the U.S. and no entity has managed to establish a source of funding for a long-term and large-scale guaranteed income program. That’s a reason El Paso should study the potential effects of a small-scale program, Canales said.
“It’s not a handout, but an investment in the future of these residents,” Canales said. “This program has the potential to serve as a really valuable test case for us here in El Paso for the effectiveness of basic income support as a tool for addressing poverty and inequality.”
During the height of the pandemic in 2020, many people living on the edges of El Paso – in the Lower Valley, Canutillo and in colonias in the far east – weren’t able to receive federal COVID-related aid, such as stimulus payments, said Eloiso De Avila, a leader with the El Paso Interreligious Sponsoring Organization, which worked to provide assistance to El Pasoans during the pandemic.
Local donors led by the Hunt Family Foundation donated $1 million to assist over 1,300 residents in El Paso County who were struck by the pandemic – either through illness or job loss – but who weren’t able to receive government assistance. The money was administered by UpTogether, a nonprofit organization that advocates for cash assistance to low-income Americans throughout the country and researches the impacts.
Last year, UpTogether provided $29 million in cash assistance to over 10,000 people in 32 cities.
“We have collected data that shows that directly investing cash in people without restrictions in how it’s spent improves financial stability and wellbeing,” said Ivanna Neri, senior director of partnerships with UpTogether.
Amid the pandemic, EPISO leaders saw people living within the city requesting help, but the pot of assistance money was available only for residents living within El Paso County but outside the city limits. That’s when EPISO decided to advocate for the city to set aside money for cash assistance to El Paso residents, De Avila said.
Local residents who UpTogether has provided cash payments to “use the money primarily for basic needs such as food, housing, medical bills,” Neri said. “Participants increased their housing stability over time. We see how participants get to improve their health, wellbeing and food security.”
Roxanna Perez was one of the 1,000-plus residents who received cash assistance in 2021 from the county and Hunt Foundation-led program after her husband became too ill to work.
For Perez, who said she lives in an aging mobile home with her husband and two children, the extra cash helped her catch up on bills and weather the effects of both the pandemic and the winter storm that hit El Paso and much of the southwestern U.S. in early 2021. Other families like hers could likely use some help going forward, she said.
The extra money “turned out to be a big blessing to my family, because I was able to provide what was necessary for my kids and medical expenses for my husband,” Perez, 28, said. “I know that, as it was a big blessing to me, it can be a big blessing to other families in El Paso.”
But Kennedy and others on council, including Mayor Oscar Leeser, expressed some skepticism of the program.
“It was originally proposed as ARPA. There was no ARPA funding,” Kennedy said in an interview with El Paso Matters. “So it was not dedicated funding, which would mean we would have to either limit some other projects or find the money in the general fund to make it work. And that’s a concern.”
On top of the cost to the city budget, skeptics complained about the small-scale. About 18 percent of El Paso city households are below the poverty line with a household income of $51,325, according to the U.S. Census.
“My concern was not fighting poverty – we need to fight poverty,” Kennedy said.
“Let’s find a way where people can permanently work their way out of poverty,” he said. “To say, well, because of COVID, we’re going to pick out 80 families out of the thousands that are below the poverty level, and we’re going to give them $6,000 for one year and then the program’s going to go away, I don’t think that’s a very comprehensive plan.”
Canales said the program requires minimal commitment, and would not necessarily receive funding after this year. It’s a small-scale proposal that could give the city an idea of whether or not direct cash payments are the best tool to address poverty, he said.
“I think this will be effective here,” Canales said. “We won’t ever know unless we try.”