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 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 that it is 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 cannot give individuals cash because they have "not 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 a child enrolled in public schools and have a household income under 170% of the federal poverty line, which is around $50,000 a year for a family of four.

St. Louis' program mirrors over 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. Business Insider 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 have 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 (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 is from St. Louis, also allowed the program to expand from 440 participants to 540.

Other basic income pilots are funded through federal programs like ARPA, Temporary Assistance for Needy Families (TANF), 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 did not respond by the time of publication.

Meanwhile, a similar case is 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, noted that the program "redistributes public money in a manner that violates the Texas Constitution" through gifting public funds.

Uplift Harris, which had accepted just over 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," said Harris County Attorney Christian D. Menefee in a statement.

However, it isn't clear if 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.

States like 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.