2 St. Louis residents are suing the city's basic-income program in an attempt to halt what they call 'unconstitutional' $500 monthly payments to low-income families

• Two St. Louis residents have filed a lawsuit to halt the city's guaranteed-basic-income pilot.

• The program provides 540 low-income families $500 monthly to help them afford housing and food.

• The lawsuit alleges that it's unconstitutional for St. Louis to use public money on basic income.

As St. Louis continues its guaranteed-basic-income pilot, two residents are suing to cut the program's funding. The lawsuit alleges that the city's plan to give low-income families $500 a month is unconstitutional in the state of Missouri.

Submitted to a circuit court on June 13, the lawsuit claims it's a Missouri constitutional violation for local leaders to give cash to residents in the form of basic income. The suit cites a clause in the state's constitution that prohibits all municipalities and political corporations from granting "public money or property to any private individual."

The plaintiffs, Greg Tumlin and Fred Hale, are both St. Louis residents. In a statement to Business Insider via his attorney, Tumlin said St. Louis couldn't give individuals cash because they hadn't "performed a service for the city or sold any goods" that would warrant payment from the city.

The lawsuit requests that city officials stop spending money on basic income, a move that could shut down the GBI pilot. City officials have until June 28 to respond to Tumlin and Hale's lawsuit.

The GBI pilot is giving 540 families no-strings-attached cash payments for 18 months, and the first payments began at the end of 2023. Qualifying participants have children enrolled in public schools and household incomes under 170% of the federal poverty line, which is about $50,000 a year for a family of four.

St. Louis' program mirrors more than 100 basic-income pilots that have been launched across the US as the model becomes an increasingly popular approach to try to combat local poverty, food insecurity, and homelessness.

Basic income offers participants — who typically live at or below the federal poverty line — lump-sum or monthly cash payments to spend on what they need most. BI has heard from participants who used the money to secure housing, afford groceries and prescriptions, pay down debt, and support their children.

Adam Layne, the St. Louis city treasurer, previously told BI that St. Louis residents had primarily used their $500 a month to pay bills.

"We want to get people to a place of thriving rather than surviving," he said, adding, "That's why the success of the program is critical to be able to show the data about what impact is this actually having on St. Louisans."

Still, basic-income pilots continue to be opposed at the city and state level — and St. Louis' program isn't the first to face legal opposition.

St. Louis GBI lawsuit includes concerns over funding, use of public money

Critics of no-strings cash payments have previously opposed the use of public or taxpayer money for the programs or raised concerns that basic income could make Americans too dependent on government assistance.

The St. Louis program is funded by $5 million from President Joe Biden's 2021 American Rescue Plan Act, or ARPA, a pandemic economic-relief fund that has previously been used by cities to launch GBI pilots. A donation from former Twitter CEO Jack Dorsey, who's from St. Louis, also allowed the program to expand from 440 participants to 540.

Other basic-income pilots are funded through federal programs such as ARPA or Temporary Assistance for Needy Families or through private donors.

Tumlin and Hale's lawsuit specifically says that giving "public money" to St. Louis residents is unconstitutional, given that St. Louis is running the GBI pilot using some city funds.

BI reached out to the city of St. Louis and St. Louis Guaranteed Income for comment, but the parties didn't respond by the time of publication.

A similar case is meanwhile active in Texas. In mid-June, the Texas Supreme Court further extended a pause on Uplift Harris, a guaranteed-income program in Harris County, which contains Houston. Payments were set to begin in April, though Texas Attorney General Ken Paxton challenged the program as unconstitutional. The suit, filed on April 9, said the program "redistributes public money in a manner that violates the Texas Constitution" through gifting public funds.

Uplift Harris, which had accepted just more than 2% of applicants, would have given 1,928 families $500 a month, no strings attached, for 18 months. Most participants were selected from high-poverty ZIP codes with household incomes below 200% of the federal poverty line.

"Local governments exist in part to help the less fortunate among us, and the Supreme Court's ruling effectively ends a program that has proven to be highly successful at allowing lower-income folks to lift themselves out of poverty," Harris County Attorney Christian D. Menefee said in a statement.

But it isn't clear whether the results of basic-income lawsuits in Harris County or St. Louis could affect one another or result in long-term bans — despite both cases being over the use of local government funds.

In states such as South Dakota, Arizona, and Iowa, Republican politicians have also brought basic-income bans to the state legislature.

Have you benefited from a guaranteed-basic-income program? Are you willing to share how you spent the money? Reach out to these reporters at allisonkelly@businessinsider.com and nsheidlower@businessinsider.com.

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