State Treasurer Mike Pieciak and lawmakers December 19 announced legislation that would establish a baby bonds program in Vermont.
Baby Bonds is an innovative policy to address intergenerational poverty, support rural economic development, and retain young people in Vermont.
Speaking to a room of lawmakers and community stakeholders, Pieciak discussed the policy alongside bill sponsors Sen. Kesha Ram Hinsdale and Rep. Dan Noyes, nationally recognized baby bonds expert Dr. Darrick Hamilton, Connecticut Treasurer Erick Russell, and Spectrum Youth & Family Services Executive Director Mark Redmond.
The policy would invest $3,200 for every Vermont child born on Medicaid into a trust fund managed by the State Treasurer’s Office. With an estimated 2000 children born on Medicaid annually, the estimated $6.4 million would be allocated from the Unclaimed Property Fund. That revenue now goes directly to the General Fund.
Children could access their baby bond between ages 18 and 30, with the initial $3,200 investment projected to grow to $11,500 by age 18 and $24,500 by age 30.
The funds would be dedicated to wealth-building activities like purchasing a home in Vermont, starting or investing in a local business, pursuing higher education or job training, and saving for retirement.
If approved by the legislature, Vermont would become the second state to adopt a baby bonds proposal.
Connecticut recently became the first to implement a statewide baby bonds program, and momentum is building for a proposal in Massachusetts. The concept has also been introduced in Congress by Sen. Cory Booker and Rep. Ayanna Pressley.
With about 2,000 babies born each year in Vermont on Medicaid, a $3,200 investment for each child would amount to a $6.4 million annual appropriation. To cover the program, Treasurer Pieciak suggests using the Unclaimed Property General Fund Transfer, a prescribed percentage of Unclaimed Property funds transferred annually to the State’s General Fund. This funding mechanism would ensure the Vermont baby bonds proposal does not require any new fees or taxes for Vermonters.