Community members who spoke at a public hearing are divided over the County Council’s a proposed “baby bonds” bill that would set aside $1,800 for each child born in the county to invest in housing, a business or education upon reaching age 18.
At Tuesday evening’s hearing on the proposed legislation before the council, advocates supported the legislation, saying it would help disadvantaged youth get a positive start in life, while critics said the program would be a poor use of county funds.
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 council documents, 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.”
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.
Jawando 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.
According to the proposal, 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, according to the proposal. The recipient must live in the county to receive the benefit when it is requested. Any unclaimed funds would cycle back into the program.
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.
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 when introducing the legislation in March. “It’s really kind of a way to get people to stay here.”
On Tuesday, Jeffrey Johnson, head of the Montgomery County Community Action Board, said he strongly supported the proposed legislation. The board is the county’s designated anti-poverty group.
“The $1,800 investment in every child born in the county would grow over time, allowing eligible adults to pursue education, home ownership and other activities that would likely have been off limits to them,”Johnson said. “Research shows that baby bonds provide a significant opportunity for children in lower-income families to gain wealth and opportunities that they would otherwise not have [due to] poverty.”
Greg Kauffman, who said he lives in the council’s District 1, also supported the legislation, saying he reported on domestic poverty as a journalist and sees the bill as an important step forward for the county.
“This legislation is momentous because it goes towards addressing the root causes of poverty, whereas most anti-poverty resources, while critical, are used to ameliorate poverty,” Kauffman said. “Child investment funding also represents an important shift–one that recognizes how poverty is created and sustained by policy decisions–to repair the damage done, and to make opportunity and mobility universally accessible.”
Cherri Branson, vice president of the Montgomery County NAACP, said the organization supports the bill, but asked the council expand the parameters in which recipients could spend the funds.
“We believe that young people who are physically or mentally disabled may not be able to fully take advantage of all that is offered,” Branson said. “For instance, assistive technologies may be extremely helpful for disabled young people to access educational opportunities, so we would ask you to amend the bill to allow for that.”
Branson also asked the council to consider expanding the program to include children who were not born in the county.
However, most of the critics who spoke Tuesday said they were concerned about the financial impact of the legislation.
“This will be a financial burden on the taxpayers,” county resident Sandy Tuttle told the council. “I worked hard. I paid my [student] loans back. Why are taxpayers continually on the hook to provide free stuff for others?”
Tuttle said she is considering moving away from the county if the legislation passes.
Esther Wells, president of the nonpartisan Montgomery County Taxpayers League, called the legislation “an anti-immigrant bill.” She criticized the requirement that a child must have been born in the county to qualify for the program.
“All immigrant children migrating to Montgomery County will not be eligible for the Child Investment Fund. However, these immigrant families will be required to pay for the annual appropriation to the child investment fund with their tax dollars,” Wells said. “That’s not inclusive, that’s not equity, that’s not welcoming.”
Josephine Salazar, who said she’s lived in the county since 1986, opposed the legislation, saying it is important for children to work hard to achieve their goals. She said the money should go to other programs such as education and road cleanup, noting that she is concerned that county services are “declining.”
“We teach our children that working hard is good for the soul, mind and saving for a rainy day,” Salazar said. “My daughter works every evening and comes home to burn the midnight oil to do homework. It touches my heart to see her work so hard to get ahead.”
The council’s Government Operations Committee is expected to schedule a work session on the legislation, according to the council agenda. A vote on the bill has not yet been scheduled.