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VT 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 trust 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

Funding:

With about 2,000 babies born each year in Vermont on Medicaid, a $3,200 investment for each child would amount to a $6.4 million annual appropriation. To cover the program, Treasurer Pieciak suggests using the Unclaimed Property General Fund Transfer, a prescribed percentage of Unclaimed Property funds transferred annually to the State’s General Fund.

This funding mechanism would ensure the Vermont baby bonds proposal does not require any new fees or taxes for Vermonters.

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 while 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. A similar proposal is moving forward in Massachusetts.

Tune in: Policy Forum on Baby Bonds

Tune in for a panel discussion recorded on Tuesday, December 19 at VSAC covering the Vermont State Treasurer's legislative priority for the '24 session—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: