The Connecticut legislature made history in 2021 when it became the first in the country to pass a baby bonds program, which would invest money on behalf of children born into lower-income families.
Now a year-and-a-half later, the program is still not off the ground.
“This is ground zero for wealth inequality in Connecticut,” Shawn Wooden, outgoing Connecticut State Treasurer (D), said. “We had an opportunity to enact bold, innovative programming to address these issues.
Wooden says his baby bonds proposal could help close the wealth gap.
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“It's intended to address generational poverty, and to close the racial wealth gap,” he said.
The idea behind the program is that every baby born into poverty, covered by Medicaid, would receive $3,200 in a trust account. That trust would be managed by the Treasurer’s Office and grow. By the time the child turned 18, the trust would have an estimated $11,000.
“The purposes that it could be used for were limited to higher education, investing in a home in Connecticut, investing or startup capital for business, or retirement security,” Wooden said. “All things tied to the wealth gap.”
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Babies born after July 1, 2021, were supposed to be eligible.
“Everybody thought when this was signed into law, the program was going into effect. And so we were all a bit blindsided by that last-minute reversal,” Wooden said.
Wooden says the program is now scheduled to go into effect two years later than planned due to delays from the governor’s office.
“The bonding authorization, $50 million a year for 12 years, had passed by the legislature, signed into law by the governor,” he said. “The only thing left was for the governor who chairs the State Bond Commission to put it on the agenda to be allocated. And so that's what needs to take place.”
In a statement to NBC Connecticut, Governor Lamont’s office says the governor is committed to providing immediate assistance to working families and children, reflected in his budgets.
The statement reads in full:
"Governor Lamont’s commitment to providing immediate assistance to working families and children is clearly reflected in his budgets and their implementation. Over the last three-plus years, the administration has taken unprecedented steps to uplift working families, whether with tax cuts, investments in public education, increased minimum wage, expansions of no-cost healthcare to more people than ever before, free job training opportunities, and investing more than ever before in early childhood, which ultimately affects children’s future health, education, and success."
Wooden will step down as state treasurer Wednesday, and Democrat Erick Russell will be sworn in.
While he feels optimistic that the program has enough support to eventually launch, he worries the two-year delay is already impacting thousands of Connecticut families.
“When this delay took place, there were there were at least 13,000 or so babies already born, that were eligible for the program,” Wooden said. “So for those families, particularly the ones that were aware of this, it was devastating, to have just snatched away.”
