Connecticut’s Baby Bonds program is in the midst of its first year for qualifying families.
A new study by child advocacy nonprofit Connecticut Voices for Children highlighted ways in which it believes the program can be improved.
Baby bonds invest $3,200 for Connecticut children born into low-income families. The funds will accrue and can be used for specific purposes like housing or college tuition when the child reaches adulthood.
State Rep. Jason Rojas, D-East Hartford, has been an outspoken supporter of the program. Rojas said it remains a valuable way to create generational wealth.
However, the gap between low- and high-income communities continues to widen.
“It's still an opportunity but it’s very unequal, because in a lot of those communities you can buy a house, it’s not going to appreciate at the rate that it might in a different community, in a wealthier community, a more affluent community,” Rojas said. “But there’s no doubt that building equity over time in the form of real estate is certainly a way to provide generational wealth.”
Baby bonds are projected to be administered to 12,000 to 15,000 infants born in low-income Connecticut families annually.
“The potential this policy has in moving the needle even further is what gives me hope,” Voices for Children Executive Director Emily Byrne said. “It makes me proud that we were able to do this in Connecticut and I think it should make us all proud.”
Despite the program’s aid thus far, the report outlined multiple ways in which baby bonds’ impacts can be increased. One suggestion is to create a tiered eligibility system to expand the program’s reach to help more families in need.
Other recommendations include creating safeguards to ensure the funds’ value is adjusted for inflation and establishing limits for the minimum and maximum compound annual growth rate.
About 60% of Black and Hispanic infants, respectively, born in the state each year will be baby bonds recipients, according to the report.
Baby bonds will help provide a leg up for low-income families, who are disproportionately Black and Brown residents, State Sen. Marilyn Moore, D-Bridgeport, said.
“I didn’t think about housing when we thought about generational wealth, but I thought of it as the single most innovative thing that we could do for people who are not even born yet to give them hope for the future,” Moore said.
