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Texas Attorney General Ken Paxton has sued to block Harris County’s guaranteed income pilot program but took no action against at least three other local governments — Austin, San Antonio and El Paso County – that have or are operating similar initiatives.
The guaranteed income program known as Uplift Harris would award a $500 monthly stipend to more than 1,900 low-income households in hopes of providing a financial cushion that can help close the wealth gap. It is being funded through $20.5 million from the federal American Rescue Plan Act.
Paxton is arguing that Harris County’s program violates the Texas Constitution’s prohibition on granting “public money or thing of value in aid of, or to any individual … whatsoever.”
The attorney general’s lawsuit states that previous rulings by the Texas Supreme Court require any programs implemented by the county to accomplish a legitimate public purpose. The county also must maintain control over the money to ensure the public purpose is being accomplished, and the county must receive a return benefit.
Ursula Hall, a judge in Harris County’s 165th Civil Court, will have to determine whether attempting to lift people out of poverty by awarding a $500 monthly no-strings-attached stipend is enough of a public benefit to make Uplift Harris legal. A hearing on Paxton’s request for a temporary injunction is set for Thursday.
Guaranteed income, sometimes referred to as universal basic income, has been discussed for decades as a possible solution to help lower poverty levels. The idea has risen in popularity in recent years, particularly during the coronavirus pandemic.
Nearly 60 cities and counties across the country, including Baltimore and Denver, have launched similar programs, according to Mayors for a Guaranteed Income, a network of leaders who advocate for such initiatives. The majority of the programs are mayor-led, but at least eight are county-based.
Michael Tubbs, founder and co-chair of Mayors for a Guaranteed Income, said Paxton’s decision “makes no sense” when other pilots have successfully occurred throughout the country without any legal intervention.
“It’s meritless,” said Tubbs, the former mayor of Stockton, California which was among the first to launch a guaranteed income program. “It won’t stop the momentum — it’s just a distraction from the real work about solving poverty.”
Other Texas programs
In Austin, the city’s pilot program provided 135 families $1,000 a month for a year and worked with 10 community organizations to select participants. The program prioritized households that suffered financially during the COVID-19 pandemic and those at risk of homelessness or displacement.
Participants said their housing security drastically improved, along with food security, according to a study from the Urban Institute.
The city of San Antonio required applicants to be at or below 150 percent of the poverty threshold and reside within certain ZIP codes. UpTogether, an Oakland-based organization that helped administer the program, also required applicants to link their bank accounts and form groups of four to eight eligible households to participate. One thousand qualified households were chosen on a first-come, first-served basis to receive $5,100 over 27 months.
El Paso County approved its guaranteed income program in December, but has yet to publicly share how the program would be structured. UpTogether will assist the county.
“Our evidence shows when we invest in individuals and families, they have increased financial stability and well-being,” said Rachel Barnhart, a spokesperson for UpTogether.
A stipend with few restrictions
Paxton’s office did not respond to emailed questions related to why it was suing only Harris County and whether other guaranteed income programs in the state could face similar legal action.
Harris County’s program is scheduled to run for 18 months and provide the stipends to randomly selected households that live below 200 percent of the federal poverty line. An individual below that threshold would make under $29,160 a year; a family of four would be under $60,000.
The stipend would come with virtually no spending restrictions aside from prohibitions on anything that would harm the safety and security of others or involve criminal activity. Participants were notified of their acceptance into the program last month; the first payments were expected to go out at the end of the month.
To qualify, applicants were required to reside within 10 ZIP codes that have among the highest poverty rates in the county. Those participating in Accessing Coordinated Care and Empowering Self Sufficiency Harris County also were eligible.
Uplift Harris used a two-stage lottery system to select applicants. In the first stage, about 6,000 qualified applicants were randomly selected to advance to the second round of the lottery system, which then determined the final participants.
Paxton said Harris County’s use of a lottery violates the Texas Constitution’s equal rights provision.
A ripple effect in other states
Paxton’s lawsuit comes nearly three months after Sen. Paul Bettencourt sent a letter to the attorney general asking for an opinion on whether counties are allowed to offer guaranteed income programs.
The county has argued that Paxton’s lawsuit unfairly targets Harris County and called it meritless.
County officials have equated guaranteed income to the federal COVID-19 stimulus checks that sent more than $3,000 into Americans pockets who made under $75,000 in three separate no-strings-attached payments.
Charles W. “Rocky” Rhodes, a professor at South Texas College of Law Houston, said he expects Paxton’s main argument will be based on public benefit and whether Uplift Harris generates enough of a benefit for the entire county.
“I’m not saying he’s (Paxton) going to win,” Rhodes said. “But there is a legitimate argument that this is unconstitutional. This is not one of his frivolous filings.”
The constitutional provision Paxton is citing has been litigated more than 300 times, said Randall H. Erben, an adjunct professor at The University of Texas School of Law, but the argument he is making to target a local government is unusual.
Nearly every state has a provision like Article III, Section 52 that says public money cannot be used for private purposes, said Kellen Zale, an associate professor at the University of Houston Law Center.
It was implemented, Zale said, because taxpayer money should be used for public purposes. Government spending often has a mix of benefits to public and private parties.
For example, she said, if a city is going to build a new stadium, private construction and material firms benefit from that while the city would benefit from the jobs created.
“A lot of government programs have kind of mixed benefits,” Zale said. “And just because there’s some private benefits, doesn’t make it unconstitutional under those types of state provisions.”
Jon. R Taylor, chair of the political science and geography departments at the University of Texas at San Antonio, said Paxton’s decision to litigate this case could have a “ripple effect” for other red states, as has occurred with reproductive rights.
Taylor said he views the legal action against Harris County as a political move by Paxton and Bettencourt.
Last Friday, Lt. Gov. Dan Patrick released a list of interim charges for the chamber to consider ahead of the 2025 legislative session. Among them is a call to examine how local governments are spending federal funds, specifically naming Harris County’s guaranteed income pilot.
“In other words, they’re gonna go again after local governments and as they’ve done in the last couple of sessions,” Taylor said. “And they’re probably going to try to find a way to craft legislation to ban UBI (universal basic income) programs in the state of Texas.”
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