'Unexpected' state budget vote delays 'baby bonds' program targeted at closing racial wealth gap
The Connecticut legislature voted to delay an ambitious program targeted at closing the state’s racial wealth gap, which is the worst in the nation.
“Baby bonds” make money available for children who qualify at birth. That money is then invested and returned to the child for certain expenses when they become an adult.
The program was slated to invest up to $3,200 on behalf of babies whose birth was covered by HUSKY, the state’s Medicaid program. That investment was expected to grow to about $11,000 when the child reached age 18. After completing a financial education course, the person could use the money for qualified expenses like education, starting a business, saving for retirement or a down payment on a house.
This year, the legislature was considering making a few technical tweaks to the program. But in April, state Treasurer Shawn Wooden, a longtime champion of baby bonds, unexpectedly announced he wasn’t seeking reelection.
Three weeks after that announcement, the legislature and the governor’s office agreed to push back the start of the $50 million-a-year program by two years.
Now babies born after July 1, 2023, will be eligible for baby bonds. No money will be authorized for the program until July 1, 2024.
Connecticut’s baby bond program was created at the urging of Wooden, with the backing of the Black and Puerto Rican Caucus (BPRC).
Rep. Geraldo Reyes Jr. (D-Waterbury), chair of the legislature’s Black and Puerto Rican Caucus, said the decision to delay the program was “political” and a disappointment.
“I think Gov. Lamont clearly understood that the BPRC definitely wants the baby bonds,” Reyes said. “He probably could have killed the program, I guess.”
Max Reiss, spokesperson for Lamont, said the administration wanted to see investments now in early childhood education, classrooms and social support.
“Investment in the children right now are things that we all agreed with the legislative leadership when it came to what we viewed as the priority investments,” Reiss said.
But Reyes said investments need to be made in children today and in the future.
“I will frankly say that I am very disappointed that we were not able to figure out how to fund Connecticut baby bonds,” Reyes said. “We heard from the governor, he wanted to invest – and is investing – in the now. And we say that we need to do both equally. Now and for future children that are still below that poverty threshold.”
Reyes said he remains optimistic that the program will not be killed, because doing so, in his view, “would be a political fumble.”
“There’s so much interest by the caucus that represents those inner cities,” Reyes said, “I don’t think that would have a good look on the political landscape of the majority of the Democratic party.”
In a statement, Wooden said he was “disappointed to hear about these unexpected developments.”
“Connecticut led the way in addressing the racial wealth gap last year with the passage of CT Baby Bonds,” Wooden said. “Although we were a national leader on this issue, the journey to create and implement good public policy like CT Baby Bonds can have its share of twists and turns … I know that the advocates and community partners will continue to keep up the fight to ensure CT Baby Bonds is fully funded to help close our state’s persistent racial wealth gap.”
Right now, the future for the program is unclear.
With Wooden on his way out, and future legislative cycles introducing any number of unanticipated budgetary stresses, money could be directed away from the program once again.
“There was a focus between us and legislative leadership on doing what we can right now, which will have a remarkable long-term benefit,” Reiss said. “It’s hard for me to predict what a future budget may look like.”
Connecticut Public Radio’s Matt Dwyer and Jacqueline Rabe Thomas contributed to this report.