Baby bonds program gets closer look in Georgia
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Democratic lawmakers want the state to gauge whether state-funded saving accounts for children born into poverty could help shrink the wealth and equity gap in Georgia.
Why it matters: Roughly 20% of Georgia children are living below the federal poverty line, according to the Annie E. Casey Foundation. In Atlanta, home to some of the worst income inequality in the nation, it's closer to 25%.
- Progressive advocates are championing novel funding policies like "baby bonds" early in a child's life to lift them out of poverty and give them better chances of success as adults.
How it works: Under a hypothetical baby bonds program in Georgia, advocates say, the state government would make annual deposits in a trust fund for every Medicaid-eligible child born here.
- Roughly 46% of Georgia births in 2023 were covered by Medicaid, according to the Kaiser Family Foundation.
Zoom out: Connecticut, which launched the country's first statewide baby bonds policy in June 2023, begins with a $3,200 deposit. Washington D.C. starts with $500.
- When the child grows up and reaches a certain age, they must spend their share on job training, college, property — something that could build wealth.
State of play: Twin resolutions in the House and Senate call for a special committee to meet throughout the rest of 2024 to study, crunch numbers and hear testimony about a Georgia-focused program.
What they're saying: "Let's invest in Georgia's future," state Rep. Kim Schofield (D-Atlanta) said in a statement. "We have $11 [billion] in undesignated surplus. These benefits should be reinvested in our youth across the state."
- "We should be able to say to every single mother in this state, 'we'll make sure he has a shot.' Every family needs a future to hope for."
By the numbers: A fully funded statewide baby bonds program in Georgia could generate roughly $700,000 in interest every year and generate $1.6 billion in annual investment, according to the Georgia Resilience and Opportunity Fund.
Meanwhile, GRO is raising money to launch a multiyear pilot program for roughly 250 kids across the state aged 15 to 21 starting in 2025.
- The age range would allow researchers to immediately begin distributing funds to measure their economic impact, fine tune over the years and educate youth about wealth building.
- The nonprofit currently manages Atlanta's guaranteed-income pilot program giving more than 650 Black women living on low incomes $850 a month to spend how they best see fit.
Context: Both pieces of legislation proposing the study committees are resolutions and don't require the other chamber's approval.
Yes, but: The GOP controls every lever of state government, and a Democratic pitch to even study progressive programs like baby bonds could face an uphill climb.