The city of Minneapolis would pay about 200 low-income families $500 a month for two years as part of a guaranteed income program that Mayor Jacob Frey wants to fund with American Rescue Plan dollars.

Frey on Friday released his proposal for spending $89 million of the $271 million federal pandemic relief money, a plan that includes allocations for housing assistance, violence prevention programs and a fund for city employees furloughed during the pandemic.

A growing cohort of local governments across the country have launched modest programs of guaranteed income in the past few years in attempts to make a case for statewide or federal policies.

"The whole concept is that people know what they need — whether that's food or housing or fixing your car or assistance at day care. People are best equipped to determine how to use resources that are made available to them," Frey said in an interview Friday.

Low-income families that live in Minneapolis and are referred to the city by its nonprofit partners would be eligible for the program.

Frey proposed spending $3 million to cover the monthly payments and associated administrative costs.

The mayor said he is encouraged by the initial results of similar programs, such as those in Stockton, Calif., and St. Paul, which last October started giving $500 monthly payments to 150 families.

A report on the early stages of St. Paul Mayor Melvin Carter's 18-month pilot described at least one family using the cash to celebrate the holidays.

In Stockton, families have used the money to pay for groceries, utilities and car repairs.

"This will be key help when people need it most," Frey said.

He added that he is particularly interested in using the program to support families facing housing insecurity with the federal government slated to end its eviction moratorium June 30.

Minneapolis is gearing up to roll out its program "as soon as possible," Frey said.

A news release from his office said the City Council is aiming to sign off on a plan on July 2 "to meet the city's most urgent needs."

A proposal for spending additional federal relief funds will come later this year.

Frey said he called Friday morning to ask to join the Mayors for a Guaranteed Income group, a national coalition collecting data and advocating for similar policies elsewhere.

Katie Galioto • 612-673-4478