A new “baby bonds” bill introduced in the Montgomery County Council on Tuesday would set aside $1,800 for each child born in the county to invest in housing, a business or education upon reaching age 18.
The proposed legislation that would create a Child Investment Fund is sponsored by councilmembers Gabe Albornoz (D-At-large) and Will Jawando (D-At-large). It has received co-sponsor support from councilmembers Dawn Luedtke (D-Dist. 7), Kristin Mink (D-Dist. 4) and Laurie-Anne Sayles (D-At-large).
“The idea is that if you want to tackle the racial wealth gap, you need to give people a strong start to reduce inequity and also invest in your own people,” Jawando told MoCo360.
According to the council’s legislation packet, creation of the fund would aim to “reduce wealth inequity in the County by establishing a non-lapsing fund to invest public monies for the ultimate benefit of children in low-income families in the County.”
For each child born in the county, $1,800 would be placed into the fund. When the child turns 18, that child would be able to apply for disbursements from the fund until age 36, subject to income or wealth requirements that would be established by a 13-person committee. The recipient must live in the county to receive the benefit when they request it. Any unclaimed funds would cycle back into the program.
Use of the disbursements would be restricted to educational expenses, ownership of a county business, investment in a county business, county property ownership or retirement investments.
“It encourages [recipients] to buy a house or home here, invest or start a business,” Jawando said. “It’s really kind of a way to get people to stay here.”
The program is estimated to cost around $22 million annually based on birth rate averages of around 12,000 babies born each year in the county, according to Jawando, who said the proposal would be funded through the regular budget process and be subject to appropriation.
He said he and his team have been working on the legislation for several years, and his office hosted a fellow that conducted research on the program last summer.
“From histories of redlining and racial covenants to discriminatory financial practices in the real estate and business industries, segregated schools, workplace discrimination and many other systemic and institutional barriers, communities of color have been unable to access key tools to wealth building,” Jawando said when introducing the bill. “Today we set a clear marker that Montgomery County is the place where all families can live, grow and thrive. Simply put, this is a major investment in our people.”
The “baby bond” concept has grown in popularity, with Washington, D.C., approving a similar program in 2021. Connecticut and California created child investment funds in 2021 and 2022 respectively, and states such as Vermont and Rhode Island are considering following suit.
“It feels like things are getting more and more challenging for our families, but particularly our children and youth every day,” Albornoz said. “I think that we need to take bold steps. While we are continuing to support, both in policy and in budget, the needs of our families today, we also have to make sure that we address their needs for tomorrow.”
A public hearing on the bill has not yet been scheduled.