Minnesota guaranteed income program proposed to offer $100 million

ST. PAUL, Minn. (FOX 9) - Guaranteed basic income programs could get a lot bigger in Minnesota.

Minnesota’s DFL leaders at the Capitol have preached cautious spending this year, but some Democrats want to pay a lot of people $500 a month. 

Rep. Athena Hollins (DFL-St. Paul), is asking to allocate $100 million for guaranteed income to some Minnesotans in 2025.

Giving people cash every month has produced interesting results in about 80 cities and counties across the country. Closer to home, St. Paul, Minneapolis, and Otter Tail County have seen the recipients get more jobs, improve their mental health, and have better child development outcomes.

"The participants in our pilots have also used this freedom to invest back in the communities that have invested in them," said Laura Zabel of Springboard for the Arts, which implemented the Otter Tail County program. "And these are the same kind of results that are reflected in the data and the research from the pilots that are happening all over the country."

Beneficiaries from the Fergus Falls and St. Paul programs praised the results.

"The program has exceeded all my expectations," said Mercedes Yarbrough of St. Paul.

"It gives us individuals hope," said LeAndra Estis, of St. Paul. "It brings joy and security. And most of all, it has allowed us to believe that our dreams will become reality."

Some DFL legislators are hoping to expand guaranteed basic income to any Minnesotans earning three times the poverty level or less.

The state would pool money with private donors and give out grants to local municipalities, tribal governments, and nonprofits to create localized projects. Monthly payments of at least $500 would go out for 18 months or longer and an independent researcher would evaluate the results.

But among the concerns expressed by Republicans in a House committee on Tuesday was that there aren’t guardrails to prevent kickbacks or to curb administrative costs.
Some also questioned the standards for who’s eligible.

"This program very explicitly would provide support to illegal immigrants or persons claiming to be someone other than they actually are," said Rep. Walter Hudson (R-Albertville). "We're not even going to question that. There's not going to be any documentation whatsoever."

Rep. Hollins pledged to work on curbing administrative costs, but said anybody in a community who isn’t wealthy should be eligible.

So who exactly would benefit from this program?

The poverty line changes every year, but 300% of the line is usually pretty close to the median income.

So somewhere around half of Minnesotans would be eligible, but $100 million is only enough to pay about 8,000 of them over the course of two years.