Massachusetts Eyes Baby Bond Program to Narrow Racial Wealth Gap
Massachusetts Eyes Baby Bond Program to Narrow Racial Wealth Gap
(Bloomberg) -- Massachusetts Treasurer Deb Goldberg is taking notes from a pioneering program as she convenes a task force to explore the issuance of the state’s first baby bonds.
Goldberg’s office is in touch with Connecticut treasurer Shawn Wooden, who was the first to launch such a program in 2021, she said in an interview. Baby bonds are government-funded trust accounts issued to newborn children. These accounts are expected to generate wealth over the course of their childhood. Studies have shown such programs can help narrow the racial wealth gap.
Wooden’s team is roughly a year ahead of Massachusetts in the process, Goldberg said. However, Wooden’s term is up in early 2023 and he’s not planning to seek re-election, which creates a risk for the longevity of the program.
“I worry about what will happen to baby bonds in Connecticut without his support and engagement,” Goldberg said. “I’m in it for the very long marathon.”
So far, Connecticut and the District of Columbia have established baby bond programs. A handful of other states, including New Jersey and Washington state, have considered related proposals.
Goldberg’s task force will advise on the structure of the program, such as the amount and the source of initial funding. No decisions have been made so far, Goldberg said.
“We feel this is an interesting idea and worthy of our exploration,” Goldberg said. “We will do it with a Massachusetts flavor.”
Goldberg is currently running unopposed for her third term as state treasurer, potentially giving her a longer runway to oversee the rollout of a baby bond program.
She also said the state’s rainy day fund is expected to top $5.9 billion by the end of the 2022 fiscal year, after reaching a record balance of $4.6 billion in fiscal 2021.
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