New York tests payments to poor for school, health

By Joan Gralla

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.