Baby bonds ‘an investment in our children,’ crowd in New London told
New London ― The new state “baby bonds” program intended to break the cycle of child poverty does not require action on the part of parents on Medicaid to help ensure their children will have access to the program by the time they turn 18.
Babies, as soon as they are born to families who rely on the state Medicaid program HUSKY, are automatically enrolled, State Treasurer Erick Russell told a crowd of more than 100 people who gathered Monday morning at Mitchell College for a 90-minute discussion of the program.
Russell was joined at the Mitchell College Red Barn by Darrick Hamilton, the Henry Cohen Professor of Economics and Urban Policy at The New School in New York City and one of the architects of the baby bonds program that is setting aside $3,200 for everyone born into poverty in Connecticut starting July 1, 2023. It is expected by the time these children reach the eligible ages of 18 to 30 for using the funds that they will accumulate to somewhere between $11,000 and $24,000.
“We just expect it to have a huge impact,” Russell told the crowd in the event moderated by attorney Nilda Rodriguez Havrilla of Connecticut Legal Services and sponsored by the Community Foundation of Eastern Connecticut. “It’s such a huge and exciting opportunity to change someone’s circumstances.”
Still, Russell and Hamilton both acknowledged that the baby bonds program is only one of the ways to help break the child poverty cycle and needs to be done in conjunction with other programs that address issues such as affordable housing, school nutrition and child care.
The money, expected to target more than 15,000 children annually, was culled from a $390 million reserve fund and involved no actual bonds that would require borrowing or financing, Russell said.
“Really, it’s an investment in our children,” Hamilton said.
Russell said the state is collaborating with community organizations as well as the Connecticut Hospitals Association and individual doctors who provide prenatal care to get out the word about the program, which in its first six months made 129 New London babies eligible for funding. In addition, he said, the state will attempt to track children so when they come of age they will be notified about how to access them, even if they have moved out of state.
“This is kind of the economic opportunity built into the program that there’s incentive for people to come back to Connecticut and put down roots here at a time that they’re maybe starting a business or starting a family or purchasing a home,” Russell said.
He said the money will be available for college education, job training, starting a business, buying a home and for retirement funds. Those who move out of state will be eligible to receive the funds, but they will need to buy homes, start businesses or get a job in Connecticut, he said, though education funding could be used out of state.
“If you have a child who, you know, gets accepted into Harvard, we didn’t want to keep them from going to whatever school that may be,” Russell said.
Russell added that there will be various ways to track the program to determine its effect on individuals as well as the state economy.
“This is about lifting Connecticut up as a whole,” he said. “I’m proud to live in a state where we don’t just kick the can down the road.”
Hamilton said it’s all about developing an inclusive economy in which every person has a chance to thrive. He pointed out that currently the top 10% of earners nationwide own about 75% of the nation’s wealth, while the bottom half has only 2%.
“There is nothing romantic about poverty,” he said.
Russell said so far eligible babies born in the first six months of the program came from 164 of the state’s 169 towns, showing the widespread effect of child poverty in Connecticut. He added that poverty in rural eastern Connecticut is just as concerning as low incomes in central cities.
“We’re addressing poverty all across the state,” he said.
Hamilton credited Connecticut with being politically adventurous in trying to address child poverty in a creative way. And Russell said the state was able to do this because it is currently in good shape financially, with more than $3 billion in its rainy day fund intended to stabilize taxes when the economy sours.
“I’m proud of how we collaborate as a state,” Russell said. “It’s not easy to stick your name out on a first-time policy. It took a lot of political courage.”
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