Maryland Comptroller Brooke Lierman on Wednesday released a report examining the feasibility of creating a statewide baby bonds program. Lierman unveiled the findings during a panel discussion at the Louis L. Goldstein Treasury Building in Annapolis.
Under the concept outlined in the report, the state would deposit $7,000 into an account for every baby born on Medicaid — about 30,000 infants each year.
The money would grow over time and could be accessed in adulthood for specific wealth-building uses. The report projects the accounts could reach about $22,000 by age 18 and $50,000 by age 30.
How the funds may be used would depend on state lawmakers.
For example, New Mexico State Treasurer Laura Montoya, a panelist at Wednesday’s event, said that if her state created its own baby bonds program, funds could be used to buy vehicles to address transportation needs.
New Mexico offers free tuition but has limited mass transit, particularly in rural areas.
In Maryland, the report estimates the total cost to taxpayers under this model would be about $567 million, though the price tag would vary depending on eligibility rules.
Deputy Comptroller Ben Seigel noted that of the roughly 65,000 babies born in Maryland each year, about 5,500 live in Census tracts identified under the state’s ENOUGH initiative.
The report says a baby bonds program could help narrow Maryland’s racial wealth gap, increase tax revenue, reduce reliance on public assistance and even boost fertility rates.
Supporters, including David Radcliffe, a state and local policy director, say the measure gives families “a real chance at getting ahead, instead of just getting by.”
Critics argue the proposal amounts to a government handout.
Connecticut is currently the only state to authorize a full baby bonds program. Maryland has smaller efforts underway, including Brilliant Futures in Prince George’s and Montgomery counties, which deposits $1,000 for 400 children and expects those accounts to grow to $13,000 by age 18.
Darius Graham, managing director of community investment at the Greater Washington Community Foundation, said lawmakers asked Lierman earlier this year to study how publicly funded trust accounts could boost economic mobility.
