Rep. Kim Schofield and Sen. Anderson Introduce Resolutions to Create Baby Bonds Study Committees
Filing comes as state level programs gain momentum across the country
FOR IMMEDIATE RELEASE
Feb. 28, 2023
Contact: media@atlantawealthbuilding.org, press@thegrofund.org
ATLANTA — Yesterday, Georgia State Representative Kim Schofield (D, College Park) introduced a resolution creating a house study committee on the feasibility of a baby bonds program by which savings accounts are created for every Medicaid-eligible child born in Georgia. This committee would help lawmakers better understand the economic development benefits of Baby Bonds policies. Such a program would significantly reduce generational wealth disparities for vast regions of the state by investing small sums into accounts for each child that, upon adulthood, could only be used for purchases which generate wealth or lead to wealth generation such as home ownership, starting a business, job training, or higher education.
Georgia State Representative Kim Schofield addressed the filing, saying, “Let’s invest in Georgia’s future. We have $11B in undesignated surplus. We’re discussing legalizing sports betting this session. These benefits should be reinvested in our youth across the state. We should be able to say to every single mother in this state, ‘if you get that child through high school, we’ll make sure he has a shot. Every family needs a future to hope for.”
Georgia State Senator Tonya Anderson, who filed a companion resolution in the Senate, added, “There will be children from every county who receive this, and there’s new research that suggests it would add years onto the lives of Georgia’s citizens. This is the kind of investment that many places in our state never see.”
The resolution builds on research led by the Atlanta Wealth Building Initiative (AWBI) and Georgia Resilience and Opportunity Fund (GRO). GRO leads an effort to pilot a Baby Bonds program in Georgia. If fully funded, the pilot would be the first in the nation to return findings, heavily influencing legislation at the state and national levels. Studies estimate inequality costs Georgia $11B in GDP loss. Internal modeling suggests a Baby Bonds policy here could create $1.6B annual investment across the state - mostly outside of Metro Atlanta. The study committee will further assess the impact of the program for participants and the overall state economy.
Amit Khanduri, Director of Programs, Baby Bonds, for GRO remarked, “Imagine how much a family’s life changes when they know that their child has a real shot to build wealth. If we want people to stay in Georgia, buy homes here, start families here - this is how we do it. The best way to grow Georgia’s economy is to give people a real stake in it.”
Famed economist and architect of the “Baby Bonds” model, Darrick Hamilton, and The New School Institute on Race, Power, and Political Economy have joined the project as partners. Darrick Hamilton commented on the introduction of the legislation by saying, “It’s a simple tool - compounding interest. Georgia invests money that generates interest, and that money goes directly back into Georgia’s economy through home purchases, new businesses that create jobs, and higher wages and tax payments through education and job training.”
A study committee could also provide insight on building Black wealth - a major concern in Atlanta and one specifically addressed by AWBI in their recent report. “When we released our framework for building Black wealth, our first recommendation was for leaders to support local and state efforts to launch a baby bonds program,” said Dr. Alex Camardelle, AWBI Vice President of Policy and Research. “By investing in Georgia’s future, we work toward narrowing the racial wealth divide not just for an individual but for our entire community.”
The bill comes as “baby bonds” legislation gains momentum nationally. Connecticut has implemented a program, and various state governments from Iowa to Nevada are exploring the model. Connecticut’s policy, in particular, has drawn national attention as State Treasurer Erick Russell recently announced that the state was garnering 7% returns through interest on their program accounts.
On the national level, there are two significant proposals in the United States Congress. The first, sponsored by United States Senator Cory Booker (D, New Jersey) and Congresswoman Ayanna Pressley, would seed $1,000 into Child Trust Accounts for every child born, not just those eligible for Medicaid, and add up to $2,000 a year - dependent on the household’s income. Another proposal, from Senator Bob Casey, nicknamed 401Kids, would deposit up to $750 a year for middle to lower income families. Either proposal would represent a significant step towards closing the racial wealth divide.
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About the Atlanta Wealth Building Initiative
Atlanta Wealth Building Initiative (AWBI) is a catalytic nonprofit that seeks to achieve shared prosperity by building Black wealth through community wealth building strategies. We are a community of investors, advocates, and activists working to transform systems and structures of capital to create opportunities to build Black wealth in Atlanta and across the South. We promote an understanding of community wealth-building strategies to cultivate the engagement, capacity, and leadership necessary to shape a new economic narrative.
By challenging systemic bias and introducing new systems and structures of capital, AWBI aims to re-engineer and redesign Atlanta’s economic ecosystem such that all sectors, from small businesses to large corporations, to anchor institutions, philanthropy, nonprofits and government, consider day to day how to integrate the economic well-being of our most disenfranchised families and communities into their strategy and operations.