Despite Proven Progress, Austin’s Guaranteed Income Program Was Gutted

The small Canadian town of Dauphin looks a lot like small towns across Texas. On precisely the same line of longitude as San Angelo but 1,000 miles north, you’ll find a main street full of pickups. Either side of the road is lined by low-slung stores, some with the feel of an Old West boomtown. The main attraction here is a railroad museum. An oil well would fit right in.

But this is not Texas. In 1974, this humdrum Western town became the center of a revolutionary socialist experiment, the likes of which wouldn’t reach the Lone Star State for about another 50 years.

The question at the center of the experiment was simple: What if the government gave poor people money, with no strings attached?

For several years in the Seventies, any Dauphin resident under a certain income threshold could receive payments from the government, ensuring that their annual income could never fall below a basic livable amount – For a family of four, that was about $16,000 in today’s Canadian dollars ($11,500 U.S.).

The outcomes were promising. During the years of the experiment, violent crime in the community dropped 44%, according to researchers. Hospitalizations dropped 8.5%. More students completed high school, rather than dropping out to work on surrounding farms. Some employers complained that it was harder to hire people for long hours at low pay when locals had access to government payments, but the numbers told a different story. Employment rates in Dauphin stayed the same throughout the four years of “Mincome.”

It seems the Dauphin experiment was more of a blip than a turning point. Today, guaranteed-income programs are still nascent. The pandemic resparked the idea worldwide, and in the years since, the globe has seen pilot projects in California, Wales, and even here in Austin.

But now, Austin’s guaranteed-income program is gutted. Facing federal funding cuts and having run out of pandemic-era special funding, the city is strapped for cash. In November, Council passed its new austerity budget, cutting more than $100 million in spending on public safety, homelessness, and other services. That included slashing the $1.3 million grant that fueled UpTogether, the local nonprofit that administered the city’s guaranteed-income program, UpTogether’s Ivanna Neri told the Chronicle.

Council Member Vanessa Fuentes was one of the city’s biggest champions for UpTogether. She’s still hopeful that philanthropy or other means could keep it running.

“The Family Stabilization Grant kept Austin families housed, put food on tables, and opened doors to better jobs and education,” Fuentes told the Chronicle. “Losing this program means losing a lifeline for Austin families, and potentially losing ground in addressing Austin’s urgent affordability crisis.”

Since UpTogether began the Austin pilot in 2022, results have mirrored those in California and abroad. UpTogether gave $1,000 per month for 12 months to 148 families in Travis County, per UpTogether’s recent report. Most of that funding came from the 2024-2025 city grant.

Critics of universal or guaranteed income programs worry that the unconditional funds will go to waste, or even encourage recipients not to work, but UpTogether’s data suggests the opposite. Ninety-seven percent of participants used funds for essential needs, like housing, food, transportation, and caregiving, according to the report. Seventy-four percent of recipients had jobs to begin with and kept them, some began unemployed and landed new jobs, and others stopped paid work to enroll in schooling or caregiving for a family member.

The payments also prevented or ended homelessness for some families. More precisely, homelessness decreased from 29% at the baseline to 8%. Most of the recipients who had been behind on rent got caught up. Families were able to afford child care, and relied less on credit cards and loans. And about one in four recipients said they used their funds to help others.

“We were able to visit family for Christmas and give our kids birthday parties,” one recipient said in the UpTogether report.

Unsurprisingly, these programs raise morale. In Finland, recipients reported better mental well-being, and Californians had “statistically significant improvements” in mental health. That’s great for families, but it’s also great for taxpayers, according to UpTogether. When people stay housed, improve their emotional health, and take care of medical issues before they escalate, it saves the city money on shelters, crime response, and health care expenses, the logic goes.

“We know that when someone is evicted or in a shelter, the cost for the city is anywhere between $30,000 to $50,000,” Neri told the Chronicle. “So taking the lowest cost of $30,000, multiplied by 85 households at risk of eviction, it’s about $2.5 million that we were saving the city.”

It’s not only saving the city money, Neri said, but also pumping funds back into the economy, as families have the capacity to pay their landlords and buy local goods. “We spend so much money fighting poverty, but it’s not working because we aren’t going to the root,” Neri said.

Because guaranteed income programs are still new, downstream benefits are hard to estimate. When the major consulting firm McKinsey & Company analyzed Finland’s program, it had a primary question: Does unconditional cash reduce incentives to work? Not only did they find an increase in employment, but they found snowballing economic benefits. They also imagined potential future benefits. For example, governments could see “considerable savings in administrative costs” if they chose to prioritize universal basic income over more bureaucratically burdensome social programs.

McKinsey made a crucial point in a fine-print footnote of its report: “A two-year experiment cannot provide information about what would happen, and how the costs and benefits would stack up, if all citizens or residents received a permanent basic income.”

Potential downstream savings are part of the reason Fuentes wants to see a solution to fund UpTogether. But for now, UpTogether simply doesn’t have the funding to support families. Neri said philanthropy helps, but they’ve never received private donations close to the size of the $1.3 million city grant.

“We’re heading into one of Austin’s toughest budget years yet,” Fuentes said. “But cutting our social safety net won’t make these needs disappear, it just makes them harder to meet.”

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