The Middletown Press (Middletown, CT)
‘Baby bonds’ supporters vow to overcome Lamont rejection
Until late Wednesday, state Sen. Marilyn Moore figured the state’s innovative “baby bonds” program was on track to launch later this year with a $50 million investment by the state.
She was stunned to hear comments by Gov. Ned Lamont’s budget chief, who said while explaining the governor’s $25 billion spending plan for 2023-24 that the administration has no intention of making baby bonds happen. Not this year, not next year, maybe not ever.
To the Bridgeport Democrat — and many others including the newly elected state Treasurer Erick Russell — Connecticut baby bonds are one of the truly great, fresh ideas to come down the pike as a way to fight not just income poverty but the punishing lack of wealth that holds families back from one generation to the next.
Under the plan championed by former state Treasurer Shawn Wooden, some 15,500 babies born into poverty each year — whose mothers are on HUSKY Medicaid — would receive bonds worth about $3,200. After they turned 18, those babies, now young adults, could use the anticipated $11,000 value of the bonds for college expenses, retirement savings, a home purchase or an investment in a small business.
The plan was adopted by the state legislature in 2021 and signed into law by Lamont as part of that year’s budget. Connecticut was the first and several states have followed.
Sure, Moore knew the baby bonds program had been pushed back by two years from 2021 to mid-2023 as Lamont balked at it.
She had been a key character in a Jan. 1 story in the CT Mirror, a 4,200-word investigation in which CT Mirror reporters documented top Lamont aides quietly working to kill the program.
Still, Moore believed Russell, the new state treasurer, was making progress in talks to save the program; and that the powerful backing in the legislature, including by the Black and Puerto Rican Caucus, would carry the day in a year with a projected $3.2 billion surplus.
And besides, it’s state law — a $50 million authorization for 12 years, totaling $600 million.
Jeffrey Beckham, Lamont’s budget chief, explained to reporters Wednesday that $50 million would be authorized for bonding this year as spelled out in the law. Ah, we asked, but will Lamont actually put the bonding plan on an agenda of the State Bond Commission and allocate the money for baby bonds?
“The governor has stated a number of times that he doesn’t support that program,” Beckham explained.
Making it happen would require money for the state Department of Social Services to determine who would be eligible, “a rather considerable amount of staff,” Beckham added — money the legislature has never set aside.
“As well, the governor believes that we should make the investments…that change the trajectory of young people’s lives before they turn 18,” Beckham said, naming early childhood programs, K-12 programs, health care and temporary cash assistance for families. “Those are the kinds of investments the governor wants to protect and use the limited resources in our budget to deal with.”
Lamont’s budget does indeed boost spending and tax cuts in all sorts of areas to address the needs of low- and moderate-income residents in ways that help the whole state — including a significant new attack on the shortage of housing for typical workers in expensive places such as Fairfield County.
Russell, after hearing those comments, remained nonplussed.
“It’s more direct than what I’ve heard,” he said. “The reality is it doesn’t change the work that we’re putting in and it doesn’t change the support for this program in the legislature.”
The treasurer, who campaigned on strong support for baby bonds, said he and other supporters are still looking to “collaborate with all parties” to make the program happen.
“There are other ways to go about funding this program other than just bonding every year,” Russell said.
Moore, who’s in the loop as co-chair of the legislature’s influential bonding subcommittee, was miffed and disappointed when I reached her Wednesday evening.
“The governor did not communicate that to me. I was under the impression that there was a one-year delay,” said Moore, who is running for mayor in Bridgeport. “I don’t understand why Jeff Beckham is saying that. That’s a hard no.”
Moore added, “I think the
Black and Puerto Rican Caucus would be surprised. We got the commitment from Erick that it would go ahead.”
Russell might have shown optimism, as he did when he and I spoke about baby bonds shortly after he was inaugurated on Jan. 4. But without Lamont’s signoff, even a constitutional officer who controls $45 billion in pension money and billions more in debt can’t bring baby bonds to life.
Around the country in places as disparate as Massachusetts, Washington state, Maryland and Kansas, baby bonds programs are popping up after Wooden, who had a significant national platform, talked up the innovation. Wooden called Lamont’s failure to fund baby bonds “shameful” last Friday night during a charity gala in his honor, where the idea was hailed.
Baby bonds were also a big talker at a conference on state finances in New Orleans in midNovember, Moore told me. “People came over to talk to me and asked me, ‘How are you going to do it?’ I was bragging,” she said, “I put an extra $15 million in the bonding package for it.”
Moore said supporters won’t give up the fight and of course, they’re hardly the only people who want their favorite programs funded. But to hear her and Russell talk about it, baby bonds, devised by economist Darrick Hamilton at The New School in New York, are not just another $50 million-a-year social program.
“It’s a program that’s designed to address more structural issues and disparities in our state,” Russell said Wednesday. “It’s also huge economic growth opportunity in our state.”
That’s because it’s basically a savings plan and in order to collect the money, the young adults must live in Connecticut.
“We can’t look at things in a two-year budget cycle and not be willing to make these longerterm investments,” Russell said, adding that baby bonds offer the chance for the state to deliver related services to families.
No one is saying the Department of Social Services could run this for nothing. But because the bonds would be tied to HUSKY Medicaid, which spends nearly $8 billion a year including federal reimbursement, surely adding on a straightforward baby bonds program would not be onerous. Russell’s office could manage the money.
“That’s an excuse that many department heads use,” Moore said. “I think we can get this done.”
She’s right. Administrative costs should not make or break this innovation.
If the supporters flex enough muscle and flash enough smart logic, baby bonds will launch in the state that adopted the idea first. It’s still pre-season in the budget ballpark, a time of hope. And it’s not like traditional antipoverty programs are hitting the ball over the fence.