Remember the no-strings “free cash” pilot program started in FY 2023 (calendar year 2022) by the Montgomery County Council? Funded in part by your tax dollars (over $3 million, although part was provided by a private grantor), the pilot program was another attempt by some on the County Council to “be like DC” and hand out the people’s tax money to a select, lucky few. Flush with federal Covid-19 “relief” money that bailed out MoCo’s economy (temporarily), the County Council thought this was something worth a flyer.
Interestingly, most of the participants in the program already had public assistance and needed “waivers” from county and MD State public programs (page 9 ) in order to get their “free” cash (see below). In fact, one person had to drop out because the $800 was going to “boost” them up and out of their HUD housing waiver:
Even as a welfare / redistribution scheme, the pilot didn’t make a lot of sense. It would only help a few needy families for 24 months before this benefit was taken away — and it literally required no reporting on where or what the “free” cash was used for, no financial education classes – and no reporting on if participants were even in the country lawfully and with proper documentation. Instead, MoCo’s Department of Health and Human Services (HHS) was simply tasked with finding a vendor to hand out the cash, and contracting with the left-leaning policy shop, the Urban Institute, for a program evaluation (to be delivered back to the County Council).
Documents from a recent MoCo Department of HHS work session now show the program is being “wound down” in accordance with the 24-month “trial phase”, leaving these families and individuals back on the dependence of MoCo’s HHS:
But – to probably nobody’s surprise, there still isn’t a formal report issued on the effectiveness or outcomes from this taxpayer cash give-away. The Urban Institute continues to punt on the delivery of its ‘final report’:
Montgomery County could’ve saved this money, invested in actual school buildings or new roads, created a college fund for select underprivileged kids, or returned it to the taxpayers (the rightful, original owners of this capital) and all of these activities would go further in alleviating local poverty then some pilot UBI program. We know this because NBER (National Bureau of Economic Research) just did a comprehensive, exhaustive study called: “The Employment Effects of a Guaranteed Income: Experimental Evidence from Two U.S. States”.
To summarize:
The transfer generated the largest increases in time spent on leisure, as well as smaller increases in time spent in other activities such as transportation and finances. Despite asking detailed questions about amenities, we find no impact on quality of employment, and our confidence intervals can rule out even small improvements. We observe no significant effects on investments in human capital, though younger participants may pursue more formal education. Overall, our results suggest a moderate labor supply effect that does not appear offset by other productive activities.
More to come, maybe, if we ever get the drafted “final report” from the Urban Institute.
