Chicago considers $500 monthly guaranteed income for 5,000 low-income residents
Under a new proposal, the city of Chicago would issue debit cards to 5,000 low-income residents that provide $500 each month for a year using some of its COVID-19 relief money.
Chicago is deep in the throes of a financial crisis, with a junk credit rating, $45 billion in pension debt and a budget shortfall of $1.2 billion – until federal aid papered over these problems for the year.
Now, the city is considering a pilot program that would pay 5,000 low-income families $500 a month for a year.
Alderman Gilbert Villegas’ proposed program would cost $30 million. The money would come out of the city’s $1.9 billion in American Rescue Plan funds, according to Bloomberg.
The city has become a much less welcoming place for low-income, working- and middle-class people for decades. Half of Chicagoans were considered middle income in 1970, but today just 16% of residents are middle class, according to WBEZ.
The city aldermen considering this pilot program are ignoring the fact that Chicago dogs its low-income residents disproportionately with predatory taxes and fees, ranging from traffic cameras to a sky-high gas taxand wireless taxes.
A handful of other cities, including Los Angeles and St. Paul, Minn., are considering similar ideas.
A one-year pilot program will provide temporary assistance, but once it’s finished – and even if a $500 a month stipend were to continue for a small segment of the city’s low-income residents – the same challenges that prevent upward mobility in Chicago will remain.
Chicago city taxpayers just saw property tax increases worth $94 million and $38 million in higher fines and fees, including a new policy that allows speed cameras to ticket drivers for going just 6 mph over the speed limit. A recent report from fiscal watchdog Truth in Accounting shows Chicago’s problems existed long before the pandemic – Chicago had $41,000 in public debt per taxpayer before the pandemic hit.
The guaranteed income proposal’s fate is uncertain after the April 21 City Council meeting. City leaders seeking the best way to foster long-term prosperity should instead focus federal funds on paying down bond debt, maintaining vital public services, and reversing regressive fine and fee hikes.