ST. LOUIS — A judge has put an indefinite hold on most of a city pilot program paying lower-income families $500 per month, citing concerns that it may break the law.
St. Louis Circuit Judge Joseph P. Whyte ruled late Friday that critics who say the $6 million program violates the state constitution’s ban on gifts to individuals have a “reasonable chance of success,” and merited an extension of an initial 15-day pause in payments to hundreds of households until a final ruling can be made.
The decision is a blow to one of Mayor Tishaura O. Jones’ signature initiatives, and one that she and progressive Democratic aldermen have championed as a potential model for poverty-reduction efforts.
Jones said the city would follow the judge’s order, but also aimed to use private donations to continue sending cash to poor residents.
People are also reading…
“We remain committed to arguing our case on the merits, as we believe that this program serves a public good,” Jones said in a statement.
Robert Dierker, a retired judge with the legal group financing the lawsuit, said he was pleased that the judge “enforced the constitution.”
Now, he said, the city can go back to the drawing board and figure out a legal use for the $5 million in federal pandemic aid paying for most of the program.
The concept has cropped up in recent years in dozens of cities and counties across the country with liberal leaders looking to fight poverty and expand the social safety net. And some of the efforts have shown encouraging signs.
When federal officials temporarily expanded the child tax credit to send families up to $300 per month for each kid, researchers later said it cut child poverty in half. And in an early municipal experiment in Stockton, California, research suggested payments helped stabilize households and made people more likely to get full-time jobs by freeing up their time.
The city started its work with a more limited program in 2021, sending one-time, $500 payments to more than 9,000 low-income households. Data on recipients’ spending that could be tracked via debit cards, where the money was deposited, found the most common expenses included groceries, utilities, restaurants and service stations — though more than a third of the money was converted to cash, rendering it untraceable.
Jones said the responses revealed a “deep need” for financial help among city residents, and pushed a new, longer-lasting plan through the Board of Aldermen in late 2022, using $5 million in federal pandemic aid and $1 million donated by tech mogul Jack Dorsey.
When Jones signed the bill authorizing the program, which would send 540 lower-income families $500 per month for a year and a half, she called it “an investment directly in our communities still struggling to get back on their feet.”
Aldermanic President Megan Green went further, calling it a step toward a universal program that would “help all St. Louisans achieve a dignified, prosperous life.”
The program began disbursing funds late last year.
But in June, a former city Republican Party chairman and a substance abuse counselor at a local nonprofit sued to stop the program, citing a line in the state constitution barring local governments from granting public money or property to “any private individual.”
The suit, financed by the Holy Joe Society, a group focused on government accountability, also argued the program runs afoul of a city rule prohibiting expenditures on anything except for “adequate consideration and efficient service to the City.”
Attorneys for the city argued that the program is exempt from such bans because it serves a public purpose: stabilizing poor households, helping people stay in their homes, and reducing the need for city spending on policing, medicine, and social services. Courts have granted exceptions for similar reasoning in the past.
In a court hearing Monday, city attorneys brought in two recipients who testified last week that they rely on the extra money to cover rent, car notes and groceries.
“I’m really counting on that money for next month because school is starting,” said one recipient, Takisha Duncan, a teaching assistant and mother of three.
Whyte said he was sympathetic to those concerns. But he noted that at least one-sixth of the program’s funding is private money, which could continue to flow. And he said he couldn’t allow the city to keep spending public money in a way that could be illegal.
“As noble as Ordinance No. 71591’s cause may be, it’s not what the Court is being asked to decide,” Whyte wrote. “The Court is only being asked to decide the constitutionality and legality of the Ordinance.”
