A trio of proposed pilot programs aims to improve financial empowerment for Cincinnati residents.
For about $2.1 million in city funding, officials want to test out a guaranteed basic income, forgive millions of dollars in medical debt, and establish savings accounts for preschool kids.
The programs are recommended after a months-long study using a $75,000 grant from the Cities for Financial Empowerment Fund, focused on addressing the racial wealth gap.
Assistant City Manager Virginia Tallent says the final report from that study is expected next month.
"The goal of the blueprint ... is to lay out research and evidence-based policy solutions that the city could pursue to address financial freedom and empowerment for residents, and particularly policies that could help to close racial wealth disparities in our city," Tallent said.
Tallent and staff from the Office of Performance and Data Analytics presented initial results from the study to City Council's Budget and Finance Committee Monday afternoon, laying out the basis for recommending the three pilot programs.
LEARN MORE: How to understand the city budget proposal
Guaranteed basic income
Mayor Aftab Pureval's proposal is for $250,000 in "seed money" toward a guaranteed basic income study.
Pureval says this is "seed money" for a program that would cost about $2 million, with the difference made up by private donors (not yet identified). The pilot program would "explore how a basic income can help our most vulnerable residents lift themselves up and succeed," Pureval said. It would include 100 Cincinnati residents.
"I don't think that the city is in a position to want to sustain the work beyond a pilot," Tallent told Council Monday. "But we'd certainly be interested in key learnings, particularly about the outcome for people who would participate, but also in the potential positive impact or improvement on participants on their social determinants of health."
Council Members had lots of questions about this proposal, but answers were not immediately available. It's not yet clear who would be eligible to participate, how much money participants would be given, or how participants would get the money.
Medical debt relief
Pureval recommends $1.5 million to remove medical debt for as many as 30,000 Cincinnati residents.
"Sixty percent of all [Cincinnati] residents have some form of delinquent debts. The biggest categories are credit card, medical debt and private student loans," said Monica Pepple, research and evaluation manager for OPDA. "One in three residents in Cincinnati are behind on medical debt."
The city's study found Black residents have a higher rate of lacking health insurance (13% compared to 10% of full city residents), and struggle to afford doctor visits, screenings, tests and deductibles (17% compared to 15%).
A community partner for this program hasn't been finalized yet, but one possibility is the national nonprofit RIP Medical Debt.
The model involves buying debt in bundles for a fraction of the original cost, according to the organization's website, meaning $100 can relieve up to $10,000 in debt.
Child savings accounts
Mayor Pureval proposes $375,00 over three years ($125,000 each year) to establish a savings account for each child in the Preschool Promise program.
"By supporting this early investment, students can understand the benefits of saving, learn the basics of investing, and have a greater leg up at finding their future education," Pureval said.
The city would establish the account and deposit an initial $50 that would earn interest as the child grows. Families would be encouraged to deposit funds into the account as well.
The city's CFE study found Black residents have higher average private student loan debt ($31,796) than Cincinnatians at large ($27,577). In total, Black residents in Cincinnati have more than $1.38 billion in delinquent private student loan debt, according to the study.
See the full presentation below:
Financial Freedom Presentation | June 2023 by WVXU News on Scribd
