As the old saying goes: Money is power. And power means having and making choices.
Despite our increasingly testy politics, America is turning a corner on its decades-long underinvestment in basic infrastructure, education and training, and public health; and Connecticut is helping to lead the way.
Recent federal initiatives to resuscitate infrastructure spending and domestic manufacturing, and to provide income supports to families suffering the consequences of COVID-19 reflect a newfound recognition that our times call for renewed public reinvestment.
Last month, the Washington Post ran a feature article on recently successful Maryland gubernatorial candidate Wes Moore’s proposal to support a baby bonds program to help poor families assets.
Moore’s trust fund program would cost roughly $100 million per year and be seeded with $3,200 for every child born on Medicaid, which amounts to nearly 40 percent of Maryland’s infants, disproportionately those from Black and Latino families.
But what went underreported was that Moore’s plan is based on what Connecticut leadership has already initiated. Indeed, the Constitution State has already taken bold steps under the leadership of state treasurer Shawn Wooden, to become the first state in the nation to commit itself to baby bonds.
The law calls for Connecticut to begin annually investing $50 million for the benefit of children born into poverty starting next year in July.
For each child whose birth is covered by the state’s Medicaid program (widely known as HUSKY), $3,200 will be allocated to that child, put into a trust, and invested by the state treasurer’s office until the child reaches the age of 18.
When a young person is between the ages of 18 and 30, and they have completed a financial education requirement, they will be allowed to access the funds, which state officials project could grow to $11,000 per child by the time they reach legal maturity.
Once disbursed, the money would have limited uses. It can only be put toward education, a down payment on a home in Connecticut, investment in an entrepreneurial pursuit or Connecticut business, or as a contribution toward retirement savings.
Connecticut’s new public investment strategy promises to be game changing. It will create new opportunities for segments of our population that have been historically the most marginalized. And in doing so it will empower them with new savings and consumer options.
When the benefits of these investments mature, they will lift the life prospects of our presently economically challenged neighbors all across the state. Such developments in turn promise to significantly improve Connecticut’s quality of life.
We know from credible policy and action research conducted by Yale University scholars in and around New Haven, that intergenerational poverty and allied factors—like poor education and nutrition, and inadequate access to health care, housing, and job opportunities, have a direct bearing on individual and community health; and that such conditions ultimately elevate the costs of remediation to the larger society.
By investing directly in people and prevention, through transformational public policy that attacks inequity across our state, Connecticut policy leaders are showing the way to the rest of our nation.
Frances Padilla is president of the Universal Health Care Foundation of Connecticut. Henry A. J. Ramos is a senior fellow at The Institute on Race, Power and Political Economy.