New York City proposes changes to poverty formula

By Edith Honan

NEW YORK (Reuters) - New York City has proposed an alternative formula for determining poverty, saying the U.S. government has been too slow to update criteria that fail to account for regional differences in housing costs.

The new measure will not immediately change city or federal funding or eligibility for social service programs, but New York officials said they hoped other cities would copy the methodology and pressure the U.S. government to follow.

Chicago, Los Angles and Newark have expressed an interest in borrowing the formula, city officials said.

The city's proposed formula factors in ballooning housing costs, child care, clothing and utilities prices and also counts federal assistance such as food stamps and rent subsidies as additional income.

"If we are serious about fighting poverty, we also have to start getting serious about accurately measuring poverty," New York Mayor Michael Bloomberg, a political independent who once considered a third-party run for the White House, said in a statement on Monday.

The city first unveiled the formulation on Sunday at the National Association for the Advancement of Colored People convention in Cincinnati, Ohio.

In New York City, the formula raised the poverty threshold for a family of four to $26,138 from $20,444, increasing the rate of those living in poverty to 23 percent from 19 percent.

The federal poverty measure, first adopted in 1969, is based primarily on food costs and has not materially changed since it was first launched, Deputy Mayor for Health and Human Services Linda Gibbs said.

The current federal formula does not adjust to different geographic regions and is not updated to reflect rising costs or social programs that assist the country's poor, she said.

Gibbs said the alternative formula -- based on recommendations developed by the National Academy of Sciences -- reflects the diversity of costs of living across the country and moves beyond just food costs.

"What we tried to do is be as true as we could to the NAS recommendations," said Gibbs.

The Federal poverty level affects federal aid programs like food stamps, Medicaid and school lunch programs.

A hearing on the poverty formula has been scheduled for Thursday before a U.S. congressional subcommittee, said U.S. Representative Jim McDermott, a Washington state Democrat who has endorsed Bloomberg's approach.

At least one policy expert warned that the issue remains politically tricky.

"If the federal government adopts a new poverty measure, there will be winners and losers. And hell hath no fury like a state that loses federal largess," said Ron Haskins, a senior fellow at the Brookings Institution who advised the city.

(Editing by Daniel Trotta and Eric Walsh)