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Baby Bonds

Baby Bonds is an innovative policy to address:

  1. Intergenerational poverty
  2. Rural economic development
  3. Retention of young people in Vermont

How Baby Bonds Work:

The policy would invest $3,200 for every Vermont child born on Medicaid into a fund managed by the State Treasurer’s Office. Children could access their baby bond between ages 18 and 30, with the initial $3,200 investment projected to grow to $11,500 by age 18 and $24,500 by age 30.

The funds would be dedicated to wealth-building activities like:

  1. Purchasing a home in Vermont
  2. Starting or investing in a local business
  3. Pursuing higher education or job training
  4. Saving for retirement

Pilot Program:

H.55 authorized Treasurer Pieciak to develop a Baby Bonds pilot program. The pilot will provide funds to a subset of young Vermonters born into poverty; their use limited to wealth-building activities like purchasing a home in Vermont, starting or investing in a local business, pursuing higher education or job training, and saving for retirement.

The pilot program will focus on recipients in Caledonia, Essex, and Orleans County. Communities in this region have disproportionately high rates of poverty, lower levels of education attainment than the Vermont average, low rates of business persistence, and overall significant barriers to social and economic mobility. 

The pilot program will enable Treasurer Pieciak to evaluate the potential impact and operational needs of a fully funded statewide Baby Bonds program.  

Pilot Program Funding:

Treasurer Mike Pieciak seeks to raise funding to support the State’s Baby Bonds Pilot Program, a proposed five-year project to address wealth inequities in Vermont and inform the creation of a permanent Baby Bonds Program in the State.  

Entities interested in supporting Vermont's Baby Bonds pilot program can contact becky.wasserman@vermont.gov to learn more.

 

Map of Vermont counties by percent of total births on medicaid in 2021.

Why Wealth Matters:

Wealth not only provides economic security but affords choices and freedom, serving as a buffer against potential loss. Importantly, wealth provides opportunities to build more wealth.

Despite the opportunities of our state, we know our economy does not work for everyone. 

Baby bonds would ensure that Vermont children facing the toughest circumstances can accumulate assets, build wealth, and shape their own financial future. By investing in our state’s greatest resource–our people–we can create a more resilient, fair, and productive Vermont economy for all.

History/Context:

Conceptualized by Dr. Darrick Hamilton, baby bonds aim to address America’s racial wealth gap and support economic security for all. Read the paper that started it all!

Last year, Connecticut became the first in the nation to implement baby bonds statewide. 

Similar legislation has been proposed at the federal level by Sen. Cory Booker and Rep. Ayanna Pressley.

Tune in: Policy Forum on Baby Bonds

The conversation, featuring Dr. Darrick Hamilton, Vermont Treasurer Mike Pieciak, Connecticut Treasurer Erick Russell, and State Senator Kesha Ram-Hinsdale, delves into Dr. Hamilton’s research on baby bonds' ability to address the racial wealth gap and enhance economic security for all. The discussion also examines Connecticut's first-in-the-nation statewide baby bonds program and draws comparisons with a similar proposal from the Vermont Treasurer's Office.

Additional Resources: