Treasurer
Goldberg Testifies in Support of Baby Bonds Legislation in Massachusetts
BOSTON – Today State Treasurer Deborah Goldberg and her Office of
Economic Empowerment (OEE) testified in support of House Bill 1157 and Senate
Bill 1999, An Act addressing the racial wealth gap, at the Joint Committee on
Financial Service’s hearing and the Joint Committee on State Administration and
Regulatory Oversight’s hearing. These bills aim to create a Baby Bonds program,
which would establish an at-birth publicly funded trust fund for eligible
Massachusetts children. Once recipients reach adulthood, funds can be used for
asset-enhancing activities like pursuing post-secondary education, starting a
business, or buying a home. This legislation represents a step toward narrowing
the racial wealth gap.
REMARKS
OF TREASURER AND RECEIVER GENERAL DEBORAH B. GOLDBERG
Joint
Committee on State Administration and Regulatory Oversight and Joint Committee
on Financial Services
Tuesday, October 24,
2023
As prepared for
delivery:
Thank you for taking me
out of turn to speak with you today.
I am here to express my
strong support for Senate Bill 1999 and House Bill 1157, An Act
addressing the racial wealth gap, which I filed in partnership with Senator
Paul Feeney and Representative Andres Vargas. These bills would establish a
Baby Bonds program in Massachusetts.
A Baby Bonds program in
Massachusetts would bring asset building opportunities, like buying a home,
starting a business, saving for retirement, and accessing post-secondary
education, for kids in our most vulnerable communities. This program would not
only help future generations achieve upward mobility, but would also save
taxpayers money in the long term and support our overall economy.
We are all too familiar
with the staggering inequities that persist in our state.
According to a study by
the Federal Reserve Bank, the median net worth of white households in Boston in
2015 was just under $250,000 ($247,500), while the median net worth of Black
households was $8.
That is not a
typo. Eight dollars. And post pandemic and now inflation, believe
me it has not gotten better…
The negative impacts of
these inequities are far-reaching and perpetuate the cycle of intergenerational
poverty.
Addressing these
disparities will allow us to mitigate risks and reach untapped potential.
The Massachusetts
Taxpayers Foundation estimates that the gross state product would increase by
about $25 billion over five-years if the state eliminated the racial divide in
wages, housing, investments, and wealth.
Nationally, a Brookings
study estimates that the economic output in the United States would be $22.9
trillion higher today if opportunities and outcomes around employment and
education had been equitably distributed by race and ethnicity.
Understanding the human
and economic risk of inaction on the racial wealth gap, I convened a Task Force
in 2022 to study the creation of a Baby Bonds program in Massachusetts.
This diverse,
cross-sector group helped to develop the bill before you today. It aims to
provide low-income individuals with a “nest egg”, a tool to expand opportunity
for themselves and for their families.
Specifically, the
legislation would create an at-birth publicly funded pooled trust fund program
for children under one, who are enrolled in TAFDC (Transitional Aid to Families
with Dependent Children) or who are part of the state’s foster care system. When
they reach adulthood, participants can access the funds and spend them in ways
that help grow assets over time.
The goal is to promote
more equitable participation in our state’s economy and to give people the
opportunity to build for themselves.
Simply put, Baby Bonds
are an investment in our collective future. They are a way to level the playing
field and give every child a chance to achieve their full potential.
I am deeply committed to
addressing the root causes of poverty and promoting an inclusive economy. As
with our other programs in the Office of Economic Empowerment, a Massachusetts
Baby Bonds program would also include financial education and wraparound
services for participants, their families, and their communities.
For these reasons, I ask
that the Committees support Senate Bill 1999 and House Bill 1157 by issuing a
favorable recommendation and I look forward to working with members in moving
this issue forward.
I am happy to answer any
questions the Committees may have.