New York tests payments to poor for school, health
NEW YORK (Reuters) - New York City's billionaire mayor, Michael Bloomberg, said 2,500 poor families could earn up to $5,000 a year for meeting goals such as ensuring their children go to school and get medical checkups, under a privately funded test program starting in September.
"Shame on us if we don't try to find out what things work," the Republican mayor told reporters on Thursday.
Bloomberg said he and other groups, including the Rockefeller Foundation and American International Group, had contributed $42 million of the $50 million needed for what he saw as the first such program in the United States.
Saying he believed in fighting poverty on humanitarian grounds, Bloomberg added there were also "self-serving" reasons.
"If anybody thinks that poverty doesn't affect them, they are making a very bad mistake, even if they happen to be lucky enough to have sufficient resources," he said. "This is something everybody's in together."
From a budget perspective, the city has a big stake. Medicaid, the nationwide health plan for the poor, will consume $5.4 billion of its $57 billion budget that starts on July 1.
Although a string of robust profits at New York's banks and brokerages has boosted tax revenues, Bloomberg warned the city still faced "scary" budget gaps in the future.
If the two-year voluntary program for poor families succeeds, New York will explore paying for it with taxpayer dollars, Bloomberg said.
Another 2,500 poor families will be asked to join a control group and will get smaller sums for answering questions.
Some 20 nations already use so-called "conditional cash transfers," according to Linda Gibbs, deputy mayor for health and human services.
For example, not all of Mexico City's program, begun in 1997, fits New York, Gibbs said, citing its rewards for reducing child labor. But some goals were the same, she said, noting Mexico City boosted school enrollment by 5 percent.
Bloomberg contrasted his "small" plan with former President Lyndon Johnson's "War on Poverty." Begun in 1964, that was a macro-level attempt "to use anti-poverty programs that had been implemented in this country for a long period," Bloomberg said.
The new payments, made every two months, would give families $20-$50 for "exemplary" school attendance, Gibbs said. Harder goals, like passing statewide high school tests, would earn bigger cash rewards.
Bloomberg likened his plan to the federal government's use of tax policy to encourage behavior, such as charitable gifts. He said his cash incentives mirrored corporate rewards for meeting sales targets or winning new clients.
Only legal immigrants and citizens will be eligible, as that is a key requirement for government social programs.
About half of New York's high school students do not graduate on time. Bloomberg said society benefited when pupils graduated because they were more likely to become taxpayers instead of collecting aid.
