California Democrats advance universal basic income bill with no funding mechanism

A costly proposal to send unconditional monthly cash payments of $1,000 to California residents has no funding mechanism and little chance of becoming law this year.

But that didn't stop lawmakers from advancing the bill out of a policy committee Monday.

“I don't know what will happen to it, but it's my birthday today, and I'm going to give out a present, which is I'm going to support the bill,” Assemblymember Marc Levine (D-Greenbrae) said to laughs from fellow lawmakers on the Assembly Revenue and Taxation Committee.

The bill's author, Assemblymember Evan Low (D-Campbell), wants to make California the first state to provide most adults a universal basic income of $1,000 per month, with no strings attached. Those payments would be capped only for residents who make more than twice a county’s median income.

But CA AB 65 (21R) could cost over $200 billion annually if most California adults received the payments, and new committee amendments stripped it of its funding source — a proposed millionaire's tax. That means the long-shot bill is all but certain to die in the Assembly Appropriations Committee, its next stop.

Impact: Fans of the universal basic income theory that became the centerpiece of upstart presidential candidate Andrew Yang’s 2020 campaign will likely be disappointed with the outcome of Low’s effort this year. However, the idea continues to gain momentum in the nation’s most-populous state and seems poised to become a more serious discussion in the future.

Background: The theory that widespread economic security can be created by providing residents funds for basic necessities has been debated in academic circles for decades, but has recently captured national attention as Yang discussed it on the debate stage. Cities around the country have launched pilot programs.

California’s own universal basic income experiment is playing out in Stockton, where 125 low-income residents have received $500 a month. Those funds helped increase recipients’ full-time employment by 12 percent and lower feelings of anxiety, according to a recent study.

Los Angeles Mayor Eric Garcetti last week announced what would be the largest universal basic income program in the country, dedicating $24 million in his proposed budget to provide $1,000 per month to 2,000 families.

Low’s measure would dwarf that program, coming in with a price tag that could exceed $200 billion, according to committee estimates. AB 65 originally proposed levying a one-percent tax on residents with income of more than $2,000,000 annually, but that was scrapped from the bill.

Alaska has had a program in place for decades that distributes oil profits to residents, the closest thing to state-sponsored basic income.

What’s next: Low called on lawmakers to organize a select committee to further explore the concept of universal basic income, an idea a number of Democrats at the hearing said they supported. He acknowledged that AB 65 is not a “fully cooked” proposal, but argued it is one that deserves continued conversation in the Legislature.

“Look at what we're doing right now, we're having dialogue about the policy of basic income,” he said. “And, by the way, we're seeing many iterations of this in our local communities because individuals are hurting, everyday Californians are hurting.”

Democrats on the committee lauded Low for championing the effort, calling it an idea worthy of discussion in the coming weeks and years.