Is America rightly called the Land of Opportunity? Connecticut is known as one of the wealthiest states in the nation, so there must be something wrong if our state cannot (or will not) provide all its citizens with the same opportunity to achieve financial well-being. One’s zip code, for example, should not be a prime predictor of financial success.
This is why Connecticut’s credit unions – who for nearly a century have stitched themselves into the communities in which we live, work and play – strongly support a major initiative proposed by Connecticut State Treasurer Shawn Wooden that would help to give more people an equal shot at success, reduce Connecticut’s brain drain and improve our statewide economy. It is known as the “Baby Bond” proposal, and it is a great idea.
Why now? If Connecticut wants to build an economy that is more resilient and able to weather the next crumbling foundation crisis or the next pandemic, it must begin to address socioeconomic inequality at its core by directly investing in Connecticut children born into poverty. This is exactly the aim of House Bill 6659, An Act Concerning the Establishment of the Connecticut Baby Bond Trust. It’s a direct investment in Connecticut’s future.
HB 6659 establishes a savings account for every baby born in Connecticut whose birth is covered by HUSKY A, the state’s Medicaid program, with $5,000 deposited into each account at birth. The Treasurer will invest those funds until the child reaches age 18 and becomes eligible to use the funds in a variety of highly productive ways – for higher education, investing in or starting a Connecticut business, purchasing a home in the state or even investing for retirement.
These eligible uses of funds are all activities that will build wealth across a wide sector of our economy and greatly enhance a family’s financial well-being. It’s the right idea whose time has come, and Connecticut’s credit unions applaud Treasurer Wooden for proposing it. This is the kind of bold, forward-thinking policy Connecticut needs right now. Closing wealth gaps regardless of race or zip code and helping every family across the state achieve financial wellness addresses generational poverty in every town and city in Connecticut. And as we work to rebuild Connecticut’s economic landscape coming through the COVID-19 pandemic, now is the time to level the playing field. And we should start by undoing the systemic inequality that has disproportionately affected communities of color.
Credit unions know this territory well; we are unique as not-for-profit financial institutions that invest in the economic and financial wellbeing of our members, and our success depends on the success of our members and communities. It’s the same way that Treasurer Wooden’s Baby Bonds proposal invests in all of Connecticut’s residents. As strong proponents of financial literacy education for young people, we applaud the Treasurer’s foresight in the bill that would require the individual receiving to take a course in financial literacy skills.
Far too many Connecticut families simply do not have the means or opportunity to build wealth. Without an initial investment like the Baby Bonds, these families will start the race to success a few steps behind their peers. For decades, we have seen outdated zoning codes and top-down tax policies disproportionately affect communities of color and drive hardworking families deeper into poverty. The advantages of generational wealth are clear – access to good schools, higher paying jobs and a financial cushion that acts as a safety net in the case of emergency and allows for entrepreneurship.
We urge the governor and our lawmakers to follow Treasurer Wooden’s lead. Support HB 6659, so we can finally begin to tackle the growing economic disparities and wealth gaps that plague so many communities in Connecticut. It’s a bold solution, exactly what this problem needs.
Bruce Adams is President & CEO of the Credit Union League of Connecticut, former Deputy Commissioner of the Department of Revenue Services, and former Acting Commissioner of the Department of Banking.
The Credit Union League of Connecticut is included among the advertising sponsors of this website and Bruce Adams is included among our members.
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