Major Garcia's Claimed "Launch" Of Universal Basic Income Plan Won't Actually Launch Until Oct; Council, Not Mayor, Will Decide Its Implementation; City Mgm't Proposes Council Approve Spending Fed'l/State Pandemic Recovery Money To Start "Pilot" Program With No Indication of Continued Revenue Sources After State/Fed'l Funds Depleted
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(July 8, 2021) -- A "pilot" plan to pay a guaanteed income of $500 per month to up to 250 City Hall-chosen Long Beach participants in two of LB's poorest Council districts (CD 1 (Zendejas) and CD 6 (Saro)), announced yesterday (July 7) as "launched" by Mayor Robert Garcia, actually won't be launched until October (the start of FY22) and its specifics won't be implemented or decided by Garcia but ultimately by the City Council.
City management has recommended that the Council approve spending current federal/state pandemic relief taxpayer funds to start the "pilot" program but with no indication of continuing revenue sources after those funds expire.
A detailed memo by city management -- visible here -- proposes that the Council approve spending part of federal and state taxpayer pandemic recovery funds -- expected but not yet in hand -- to start the "pilot" program. It offers no specific ongoing revenue sources to pay for the program after current federal and state taxpayer pandemic relief funds expire. Implementing the program (preceded by staff planning in FY21) isn't scheduled to begin until Oct. 1, 2021 (start of FY 22.)
Management's memo also indicates plans to seek what it calls "matching" funds from state taxpayers -- presumably to be matched from LB taxpayers -- to expand the "pilot" program further.
City staff's memo offers no indication of committed grants or philanthropic sums Garcia initially claimed would help fund the spending instead of taxpayers.
If approved by the Council, initial funds would be allocated to start only to residents in zip code 90813. City staff says the funds would provide up to 250 participants with $500 per month for 12 months in single headed households with incomes below the poverty line.
Zip code 90813 encompasses parts of CD 1 and CD 6 in an area from 7th St. to PCH from the LA river east to Cherry Ave., and west of the LA river from PCH to 9th St. into Port areas.
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City staff's memo states: "If approved by the City Council, staff will begin a more detailed operational planning and development effort that includes line-item budgets, project scoping, contract administration, request for proposal (RFP) development, and other tasks required to define the operational requirements of the program. It is recommended that the operational planning and procurement phase of the GI [Guaranteed Income] pilot program begin in the 3rd Quarter (Q3) of 2021 (July to September 30th)" with implementation of the program to "begin October 1, 2021."
City staff indicates it envisions expanding the "pilot" program using taxpayer funds, proposing to "Apply for matching funds [presumably matched by LB taxpayers] from the State of California to increase the pilot program in 90813 and/or spread to other areas of need. We will be requesting sufficient funding from the State to reach 500 families in 90813 with a combination of state funding, LBRA [LB Recovery Act/LB taxpayer funds] funding, and possible other grants, which would allow us to support approximately 30 percent of the eligible families in that specific area."
City staff's memo proposes that the Council approve tapping two main potential funding sources with sums expected but not yet in hand: the federal "American Rescue Plan Act" and the recently adopted California State Revised Budget.
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[City management July 7 memo text] American Rescue Plan Act (ARPA)
On March 16, 2021, the City Council approved a recommendation as part of the Proposed Long Beach Recovery Act (LBRA) to fund a guaranteed Income Pilot Program. Included in that recommendation was the allocation of $2,000,000 of anticipated H.R.1319 American Rescue
Plan Act of 2021 (ARPA) grant funding for "Direct Income Pilot Programs to help our community meet basic needs and increase the potential for economic stability and advancement.
After initial review of ARPA interim guidelines, GI pilot program elements included in the City Council recommendation appear to be consistent with the goals, objectives, and eligible uses of the ARPA to "provide a wide range of assistance to individuals and households, small businesses, and impacted industries, in addition to enabling governments to rehire public sector staff and rebuild capacity," including:
Delivering assistance to workers and families, including aid to unemployed workers and job training, as well as aid to households facing food, housing, or other financial insecurity.
...The $2,000,000 was an initial estimate based on the ARPA funding believed to be available at the time. That amount has recently been revised by the federal government and a revised spending plan will be released in July. It is still expected that significant dollars will be available through the Recovery Act for a GI pilot program.
State of California Revised Budget
On May 14, 2021, Governor Newsom released the May Revision to the FY 22 State Budget. Totaling $267.8 billion, the Revised Budget builds on a national record-setting budgetary surplus of $75.7 billion and $27 billion in direct federal relief ARPA. The Revised Budget
assumes $175.9 billion in General Fund revenues and $196.8 billion in General Fund expenditures, representing substantial increases of $17.6 billion in revenues and $32.3 billion in expenditures compared to the Governor’s January Proposed Budget, with $24.4 billion set
aside for reserve accounts to bolster longer-term fiscal resiliency.
Additionally, the Revised Budget includes $35 million in General Fund over five years to support local Universal Basic Income pilot programs. These pilot programs would be city or county administered, require a local-match commitment, and benefit low-income Californians. This investment could help expand the LBRA investment for a City GI pilot program.
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How did this get started?
In late June, Mayor Garcia Tweeted his desire to join a group of (at that time) eleven U.S. Mayors (including the Mayors of L.A., Stockton and Atlanta) in supporting "a guaranteed income" ("universal basic income" or "UBI") (LBREPORT.com coverage here.
On Sept. 1, Mayor Garcia (who has no policy setting authority) agendized a an item asking the City Council to direct the City Attorney "to draft a Council resolution in support of the universal basic income initiative established by the Mayors for a Guaranteed Income, as well as federal and state efforts to support residents disadvantaged by the COVID-19 pandemic." The item asked the City Manager "to seek grants and private foundation support to fund the pilot and to bring back specific grant approval to City Council."
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In its Fiscal Impact section, the memo acknowledged likely future LB taxpayer costs. Developing the pilot program is expected "to require a moderate to significant impact on staff hours beyond normal budgeted scope of duties and is expected to have moderate to significant impact on existing City Council priorities, due to limited staff capacity impacted by things such as the pandemic response and other priority projects." It leaves those unquantified taxpayer costs to future management proposals and Council action. "Any additional fiscal impact, including impact on staff time and City Council priorities, of the implementing the Universal Basic Income program will need to be identified and brought back to City Council prior to Council action to proceed with any pilot program,"
On Sept. 8, 2020, the City Council on a 9-0 vote approved a resolution that stated in part: "The City Council of the City of Long Beach supports ongoing, direct cash payments throughout the Covid-19 pandemic and until our economy recovers, and calls on Speaker Pelosi and Leader McConnell to ensure such payments are included in the next stimulus package; ...supports the concept of the "Universal Basic Income" as expressed by Mayors for Guaranteed Income, and supports the concept of a pilot program using available grant funds; ...urges formal local advocacy efforts through the City Lobbyist to ensure such payments are included in any State or Federal final stimulus package."
On the same night, as part of the Council's FY 21 Budget Adoption process, the Council approved spending $100,000 from reserves for one-time support to hire an "Economic Equity Specialist...to address income inequality by exploring and supporting public banking and universal basic income."
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