The Massachusetts state treasurer is calling for the state to create a so-called “baby bonds” program.
A task force created by Massachusetts Treasurer Deborah Goldberg issued a report Monday containing recommendations on how the state could develop a publicly-funded trust fund program for children born into low-income families.
“Their work has provided Massachusetts with the foundation to enact a fiscally-sound baby bonds program that could provide life-changing assets for future generations of Massachusetts residents,” Goldberg said.
The proposal calls for the state to put a sum of money for each eligible newborn into a collective fund where the investment would be managed and grow and be accessible to each child when they turn 18.
All babies born to families who are receiving benefits from the state’s Department of Transitional Assistance and children under one year of age who are in foster care would be automatically enrolled in the program, the report recommended.
There would be restrictions on what the money could be used for. The task force said it could pay for higher education, buying a house, starting a business, or other “asset-enhancing” activity.
While the report from the task force contained financial models it did not include a recommendation on how much the state should invest in the name of each child, or estimate how much the program could cost the state.
The task force was chaired by Lisa Wong, the town administrator in South Hadley.
“This program is ambitious, it’s comprehensive, but we know it has to partner with other programs to eliminate the wealth gap,” Wong said.
A bill to create a baby bonds program is expected to be filed for the next two-year session of the Massachusetts legislature that begins in January by State Senator Paul Feeney of Foxborough and State Rep. Andy Vargas of Haverhill, both Democrats.
Speaking during a program to announce the release of the task force report, Feeney said it is an opportunity to “dream big.”
“We can provide a jumpstart to individuals who are otherwise today at a disadvantage,” he said. “We can begin to narrow the racial wealth gap and give our most vulnerable residents a fighting shot at the middle class and the American dream.”
Goldberg, a Democrat who starts her third term in January, urged anti-poverty advocates and others to work to build support for the baby bonds legislation.
“We know how things get done and it has to be a ground swell of support and a sense of urgency where we can engage people to make it unacceptable if the program doesn’t move forward,” Goldberg said.
Connecticut and Washington, D.C. have baby bonds programs on the books, according to the treasurer’s office. New Jersey Democratic U.S. Senator Cory Booker and Massachusetts Democratic Rep. Ayanna Pressley have filed a bill to establish a national program.
