SCOTX pauses Harris County's guaranteed income pilot program amid legal battle

HARRIS COUNTY, Texas (KXAN) — The Supreme Court of Texas issued a ruling that pauses Harris County's "Uplift Harris" program on Friday, which would give monthly payments of $500 to 1,928 impoverished county residents for 18 months.

The Texas Office of Attorney General sued Harris County in a local district court and sought a temporary injunction pending the case's outcome, but was denied. It appealed that temporary injunction decision to an appeals court and was also denied. It then asked SCOTX to intervene.

"Once the funds are distributed to individuals, they cannot feasibly be recouped if it is later determined they were paid in violation of the Texas Constitution," the ruling states. "It remains possible the County will ultimately succeed on the merits. But we must judge the likely harm [of an injunction] to the County’s legal rights in light of our preliminary assessment of the merits, which does not favor the County."

Harris County can still set aside funding for the program, but cannot release payments pending the case's outcome. Uplift Harris is funded through the federal government and not Texas funds, according to the ruling.

Harris County Attorney Christian D. Menefee said in an email to KXAN that he is "extremely disappointed" by the decision and that the ruling sets a "dangerous precedent."

"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," Menefee said.

The Office of Attorney General argues the payments are illegal under the state constitution's rules against "gratuitous" gifts to individuals. SCOTX's ruling said the constitutionality of the program "remains an open question."

"Most state constitutions have bans on gifting public funds, but no other state court has barred guaranteed income programs on those grounds," Menefree said. "Those bans are there to stop cronyism and gratuitous gifts of tax dollars. They aren't intended to stop governments from providing public benefits. This ruling creates a playbook for conservatives who want to stop government from fulfilling one of its core functions."

The court took issue with a lack of oversight about how the funds would be spent. Uplift Harris, according to the court, offers the payments via a lottery to applicable residents with "no strings attached."

"A government in Texas that desires to dole out public funds must, among other things, 'retain public control over the funds to ensure that the public purpose is accomplished and to protect the public’s investment,'" the court's ruling reads. "It likewise appears there will be no monitoring of the recipients’ day-to-day purchases, so it is unlikely the County will know how recipients spend the money and whether any legitimate public purpose was achieved thereby. Indeed, a County official testified that the program is not designed 'to monitor what people do with the things they buy.'"

The decision compares the program to food stamps and housing vouchers, which have mechanisms to ensure funds must be used for a specific purpose. A January review of Austin's guaranteed income pilot by the Urban Institute showed that most of those payments went to housing expenses.

In February, Austin's former interim City Manager Jesús Garza said the city intended to expand its program. He said in a memo that there would be changes to increase oversight of the program, including program audits and more data collection.

KXAN reached out to the City of Austin about the Friday ruling.