Monday, December 18, 2006

Bloomberg Plans New Office to Help New York’s Poor

The New York Times
N.Y. / Region

Mayor Michael R. Bloomberg announced proposals to fight poverty Monday at a Lower East Side credit union. He was joined by Representative Charles B. Rangel, left, Geoffrey Canada, and Veronica M. White.

Published: December 19, 2006

The city is planning to spend an extra $150 million a year in public and private money on the core priority of Mayor Michael R. Bloomberg’s second term: combating poverty that is hidden beneath New York’s vast wealth.

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The effort would involve the creation of a new city office that would operate in part like a philanthropic foundation and in part like a venture capital company. The program, called the Center for Economic Opportunity, would administer a $100 million fund to support
experimental programs, like giving cash rewards to encourage poor people to stay in school or receive preventive medical care, or matching their monthly bank deposits to foster greater savings.

The office would also oversee a program giving tax credits to impoverished families to offset child care costs. Programs are to be constantly evaluated, and those that cannot show success will be terminated. The administration has hired Veronica M. White, a business planning and management consultant who has worked in housing development.

The effort is classic Bloomberg in that it emphasizes nontraditional solutions and enlists the private sector to tackle problems that have historically vexed governments. Mr. Bloomberg has turned to fellow philanthropists to help improve the schools, to finance a Republican national convention in New York and now to build a ground zero memorial. But yesterday’s announcement represents the fruit of his efforts to fight poverty in his second and last term as mayor.

“When you do things with public money, you really are required to do things that have some proven track record and to focus on more conventional approaches,” Mr. Bloomberg said in making the announcement at a credit union on the Lower East Side of Manhattan. “But conventional approaches, as we know, have kept us in this vicious cycle of too many people not being able to work themselves out of poverty even though they’re doing everything that we’ve asked them to do.”

The administration’s efforts would place an emphasis on rewarding good behavior and promoting self-sufficiency. Officials plan to spend $42 million annually on the tax credit, $25 million to reward actions like attending schools or prenatal education classes, and $11 million to help poor adults save money and learn sound financial practices.

The new plan calls for the office to spend $5 million a year on measuring progress, and $71 million on about 30 programs that administration officials say they are developing but declined to announce.

In an approach that has become a hallmark of the Bloomberg administration, the new office is intended to work across all agencies. But the center could also serve as a way of continuing Mr. Bloomberg’s agenda after his term ends.

This year, he charged a high-profile panel drawn from business, nonprofit and philanthropic circles with devising solutions to fighting poverty that did not cost additional money. But after the panel released its recommendations in September, officials in the administration were able to make the case that creating the new office would help build both the internal institutions and external demand that would allow it to survive a new administration.

The child care tax credit proposal, which needs state approval, is working its way through the legislative process, said Linda I. Gibbs, the deputy mayor overseeing the antipoverty effort. And officials have begun raising money to pay for the incentive program, an approach called conditional cash transfers that have had success in other countries.

The effort to teach the poor about financial management would operate out of the Department of Consumer Affairs and be called the Office of Financial Empowerment. Jonathan Mintz, the consumer affairs commissioner, said that he was looking to help coordinate and promote a program of individual development accounts that would use public and private money to match accumulated savings.

Policy experts called the Bloomberg plan significant and unusual. “The amount of money allocated is not trivial, especially if the money is used to leverage other expenditures, say by private businesses or nonprofits,” said Harry J. Holzer, a public policy professor at Georgetown University. “The whole idea of a broad fund to fund innovation seems pretty novel, especially at the city level.”

Antipoverty advocates offered measured praise for the announcement, saying that while they were pleased that the city was making a financial commitment, more work remained to be done.
“It is good that the mayor is making a financial commitment to fighting poverty, but we are concerned that this process is not transparent,” said Gloria Walker, a member of Community Voices Heard, an antipoverty group that advised the panel. “Low-income people need to be involved in monitoring and overseeing these new programs.”

Joel Berg, executive director of the New York City Coalition Against Hunger, said that although he was “extraordinarily pleased” that the $150 million would go to test innovative approaches, particularly the individual development accounts, he warned that it was not nearly enough.
“It equals only about $125 per person for the approximately 1.8 million New Yorkers living below the meager federal poverty line,” he said.


A new generation of billionaire
business people are trying to
harness marketplace forces to
do good works.
Go to Special Section »

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