City Hall

Money is in the Mail for 1,000 Low-Income Phoenix Families

Gage Skidmore
Phoenix City Hall. Each family selected is expected to receive $12,000 over the next 12 months.
Phoenix families selected for the city's financial assistance program are expected to get debit cards in the mail this week with their first monthly stipend of $1,000.

Each eligible family is allocated $12,000 over the next 12 months in the program. Personal identifying information of those receiving money is not being disclosed, according to the city of Phoenix.

A total of $12 million in federal pandemic relief funding was earmarked for financial assistance after Phoenix City Council approved funds in a split vote back in September 2021.

Some social justice advocates labeled the city's assistance program as one step towards a universal basic income program, in which eligible low-income individuals in a community receive cash from the government to ensure everyone has a base level of income.

More than 7,000 households across the city were eligible in a random lottery pool for low-income households. The finalists were 1,000 families with children, which the city chose in recent months. Eligible families were those who had already submitted appropriate financial documentation to prove they qualified because they were already in a different government program.

A family of four would need to earn no more than 80 percent of the median income for the area, or $63,200.

Families were either living in U.S. Department of Housing and Urban Development communities, using federally funded housing choice vouchers for Section 8 properties, or participating in the city's Emergency Rental Assistance program funded by coronavirus relief money.

The Financial Assistance for Phoenix Families Program is funded by the American Rescue Plan Act, which was the second federal coronavirus relief package totaling $1.9 trillion nationwide. The city of Phoenix was allocated $200 million in federal funding from the American Rescue Plan Act last year.

If the Phoenix cash assistance program was expanded to all the families eligible in the random lottery pool, it would cost the city $84 million each year to sustain.

"There are no plans to expand," said Kristin Couturier, senior public information officer for the city of Phoenix in a recent email. "This is a program utilizing one-time funds."

But in September 2021, the city of Phoenix staff recommended that council members consider continuing the program after the first-year evaluation.

It was unclear how many city council members back such a proposal.

Phoenix City Council Member Carlos Garcia, who represents District 8, which includes sections of downtown and South Phoenix, was a staunch supporter.

"I believe this program is going to be really successful," Garcia said after casting his vote in September. "Hopefully we can come back to it and add more money to it."

Council Member Garcia estimated that needy families would see the debit cards in their mailboxes "before the holidays" and no later than January 2022.

But the program process was bogged down with some delays, Couturier said.

To move forward, the city tapped Phoenix-based nonprofit Partnership for Economic Innovation in December 2021 to deal with "administrative and staffing constraints," Couturier said.

Garcia did not immediately respond to requests for comment for this story.

City administrators collaborated with other cities such as Los Angeles and Chicago, which piloted similar programs over the past two years.

The Partnership for Economic Innovation organization is eager to help the city expand the program if approved, manager Ben Williams told Phoenix New Times.

But for such a program to continue, the city would need to find fresh sources of funding, because all $200 million in federal relief funds has been earmarked.

The city leaders voted to spend $10 million on its Workforce Wraparound Tuition and Apprentice Program. That program aims to combat major losses in the hospitality, food service, and retail industries hurt by the economic slump caused by pandemic restrictions.

“As the pandemic continues to impact vulnerable communities at a disproportionate rate, creating an avenue to distribute direct financial assistance expediently is crucial,” said Miguel Gamiño, executive vice president at Mastercard, which is providing the pre-loaded debit cards. 

Alcohol, tobacco, and lottery tickets are the only items that can’t be purchased with financial assistance.

“Should we notice any abuse of funds, it will be addressed on a case-by-case basis,” Williams said.