Stifling innovative approaches to help lift Iowans from poverty

When economic forces lean hard against working families, streamlined public policy solutions can make a difference for those struggling to meet essential needs.

The Iowa House last week moved to bar local elected officials from even examining one new approach, voting 55-43 on a bill, HF 2319, not only to prohibit city or county guaranteed income programs, but to end a current pilot program in central Iowa before it’s finished.[1]

It’s not the first time legislators have reached in and slapped down local officials who have seen a need and tried to fix it when state lawmakers have refused to act. State lawmakers have been restricting local control in several areas in recent years – among them, forcing repeal of local minimum wage ordinances.

Guaranteed Basic Income (GBI) is a promising idea that Iowa lawmakers should at least examine before rejecting it on the purely ideological grounds voiced during the House debate. We already have seen the effectiveness of guaranteed income programs in the form of refundable federal tax credits such as the Earned Income Tax Credit (EITC) and the Child Tax Credit, which lift millions of Americans above the poverty line each year.[2] Since 1989, Iowa has a state EITC, tied to the federal credit, that has received strong bipartisan support.[3]

GBI provides money, typically on a monthly basis, to families based on their household income. Compared with tax credits that typically are received once a year, GBI essentially moves up the timing of the support. This helps families cover their needs — such as food, utilities, shelter, diapers, clothing and education — as they arise. Rather than going into debt to cover costs, GBI offers families the chance to avoid the debt in the first place, preventing exorbitant interest charges and battered credit scores.

GBI further differentiates itself from other forms of assistance by its streamlined administrative processes and offering stable financial support without imposing extensive eligibility verification or documentation requirements.

A GBI pilot program in Iowa, administered by the UpLift initiative, is currently in progress across Warren, Dallas and Polk counties. This initiative, funded by a mix of local governments, foundations and businesses, targets 110 low-wage individuals, providing a monthly stipend of $500 over the course of two years. After the pilot concludes, researchers will publish results about the program’s effectiveness. 

Eligibility for the program is determined by age, residency and household income criteria, with participants required to be at least age 18, live in specified counties and earn a household income at or below 60% of the area median income. To qualify, household income for a family of four cannot exceed $59,100. For a family of two, income cannot exceed $47,280. [4]

Comparable programs around the country, such as SEED (Stockton Economic Empowerment Demonstration) in Stockton, California, are returning promising results, including increased full-time employment and a reduction in income volatility among participants.[5]

GBI is especially promising for rural areas where poverty rates exceed the national average. GBI acts as a safety net for low-wage people who do not earn enough to meet basic needs and contributes to rural economic growth and well-being by addressing relative wage constraints.

As results from Iowa’s pilot program and other GBI programs across the nation are analyzed, lawmakers can make an informed choice about this promising policy solution. Common Good Iowa urges lawmakers to allow the UpLift pilot program to continue and reject the proposal to suppress research that could make Iowa a stronger state.