PROVIDENCE – More than 100 low-income Providence residents will be guaranteed to receive $500 a month for a year under a new program unveiled Tuesday by Mayor Jorge Elorza.
Providence will be the first city in Rhode Island to pilot its own version of a guaranteed income program, a philanthropy-fueled experiment that dozens of other communities around the country are also exploring.
Under Elorza’s plan, 110 residents who live at or below 200 percent of the federal poverty level will be able to apply for the program, which will provide monthly cash payments of $500. Supporters argue that the income boost will help low-income residents cover unexpected expenses and pay bills.
“The best way to protect the long-term health and wellbeing of our communities is by providing direct financial assistance to our residents, and I am inspired to launch the Providence Guaranteed Income pilot program in hopes of encouraging policies aimed at reducing poverty at the municipal, state and federal level,” Elorza said in a statement.
The pilot phase of the program is supported by $1.1 million in private funds raised by Elorza, including $500,000 from social media entrepreneur Jack Dorsey. Neil Steinberg, the president and CEO of the Rhode Island Foundation, called the program “an investment in our friends and neighbors.”
“There is no better time, there’s no more-needed time to do this,” Steinberg said at a press conference Tuesday. “COVID hit the communities in need, and communities of color, more than anyone. We know that. Whatever the challenges were before, they’ve been exacerbated.”
Elorza is a member of Mayors for Guaranteed Income, a national coalition of municipal leaders who have been exploring different kinds monthly cash benefit programs. The concept has been around for many years, but Democrat Andrew Yang helped take it mainstream during his failed run for president in 2019 and 2020. The economic destruction caused by the COVID-19 pandemic has fueled further interest in these kinds of programs.
Los Angeles recently announced plans to provide $1,000 a month to 2,000 families for a year. Oakland, California, and St. Paul, Minnesota, are giving $500 a month to low-income families for a period of 18 months. Chelsea, Massachusetts, announced last year that it would provide more than 2,000 families stipends of $400 for four consecutive months.
There are no strings attached to the payments, so residents can spend their monthly stipends however they choose. But city officials say that participants will be asked to meet with a benefits specialist before enrolling to see how the new income will affect housing vouchers and programs like food stamps.
The city is partnering with the University of Pennsylvania-based Center for Guaranteed Income Research to study the families that receive the $500-a-month checks. The university launched its program last year to study the pilot programs being implemented all over the country.
State Senator Tiara Mack, a Providence Democrat, said she wants to ensure that the program expands beyond the one-year pilot phase – and potentially across the state.
“This can’t just be a pilot program,” Mack said. “We know that when money is in the hands of people and they can make decisions based on their lives and their livelihoods and what’s best for their families, they succeed and they do better.”
At a press conference later in the day, Governor Dan McKee said “I don’t know the concept well enough to be able to expand on that” when asked about Providence’s guaranteed income program. He said he’s open to exploring benefit programs that are affordable.
“If we have the resources to help improve the state in any community, or any specific city or town, we would do that,” McKee said. “I don’t know enough about the details to say if it’s a great idea or if it’s not a good idea.”