HARTFORD, Conn. — State officials announced Tuesday that funding for so-called 'baby bonds' has been secured, leaving the next step up to the state legislature.
If the legislation is approved, reserves set aside during the restructuring of the Teachers’ Retirement Fund in 2019 would be replaced with a relatively inexpensive insurance policy. The savings of $381 million will be deposited into the CT Baby Bonds Trust, reducing the overall cost of the program by over $200 million while maintaining the amount invested in each child and allowing those investments to begin as scheduled for the first eligible babies beginning this July.
Two years ago, Connecticut passed the original baby bonds legislation. The program takes $3,200 and invests it on behalf of each child born into poverty, as determined by their birth being covered by HUSKY, the state’s Medicaid program. Those investments would grow over time and become available to participants between the ages of 18-30 for specific uses intended to build individual wealth and spur statewide economic growth.
An estimated 15,000 Connecticut births are covered by HUSKY each year, including residents in all 169 towns. Eligible babies born on or after July 1, 2023, will be automatically allocated a share of the CT Baby Bonds Trust.
“The plan that we are announcing today allows us to meet our commitment to those kids while avoiding any state borrowing and requiring no ongoing budgetary support," said Treasurer Erick Russell. "By funding these investments upfront, we will even reduce the overall cost of the program by over $200 million."
House Republican Leader Vincent Candelora said in a statement, "I appreciate Treasurer Russell's dedication to finding away a to fund the Baby Bonds initiative, but at a time when we're talking about fiscal guardrails, the dire need for tax relief, and the importance of investing in local education, I have to question a solution that involves repurposing surplus taxpayer dollars that had been used as a contractual makeweight to refinance teacher pension debt. This seems to undermine the message of fiscal responsibility the Governor has promoted throughout the session, and the vague mechanics of how they’ll simply take $380 million for this program certainly deserves more scrutiny.”
Doug Stewart is the Senior Digital Content Producer at FOX61 News. He can be reached at dstewart@fox61.com.
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