As the old saying goes, money is power. And power means having and making choices.
Despite our increasingly fractious politics, America is turning a corner with decades of underinvestment in basic infrastructure, education, training and public health; and Connecticut is helping to lead the way.
Recent federal initiatives to revive infrastructure spending and domestic manufacturing, and to provide income support for families suffering the effects of COVID-19, reflect a newfound understanding that our times call for renewed public reinvestment.
Last month, the Washington Post ran a feature on the proposal of recently victorious Maryland gubernatorial nominee Wes Moore to support a baby bond program to support the wealth of poor families.
Moore’s trust fund program would cost about $100 million a year and would be endowed with $3,200 for each child born on Medicaid, which accounts for nearly 40 percent of Maryland’s infants, disproportionately among those from Black and Hispanic families.
What has been underreported, however, is that Moore’s plan is based on what Connecticut’s leadership has already initiated. In fact, the constitutional state, led by State Treasurer Shawn Wooden, has already taken bold steps to become the nation’s first state to commit to baby bonds.
The law requires Connecticut to invest $50 million annually in favor of children born into poverty starting next July.
For each child whose birth is covered by the state’s Medicaid program (commonly known as HUSKY), that child is allocated $3,200, placed in a trust fund, and invested by the state treasury until the child is 18 years old.
If a young person is between the ages of 18 and 30 and has completed a financial education requirement, they will be permitted access to the funds, which state officials say could grow to $11,000 per child by the time they come of age.
Once paid out, the money would have limited use. It can be used solely for education, a down payment on a Connecticut home, an investment in a Connecticut venture or business, or as a contribution to a retirement plan.
Connecticut’s new public investment strategy promises to change the game. It will create new opportunities for sections of our population that have historically been most marginalized. And it will open up new savings and consumption opportunities for them.
As the benefits of these investments mature, they will improve the life prospects of our currently struggling neighbors across the state. Such developments, in turn, promise a significant improvement in the quality of life in Connecticut.
We know from credible policy and action research conducted by Yale University scholars in and around New Haven that intergenerational poverty and related factors — such as poor education and nutrition and inadequate access to health care, housing, and job opportunities — have a direct impact individual and community health; and that such conditions ultimately increase the cost of remediation to the larger society.
Through direct investments in people and prevention, through transformative public policies that attack injustices in our state, Connecticut political leaders are leading the way for the rest of our nation.
Frances Padilla is President of the Universal Health Connecticut Nursing Foundation. Henry AJ Ramos is a Senior Fellow at the Institute on Race, Power and Political Economy.