CityState : Reporter
The proposal calls for creating a trust seeded with $ 3,000 for each child born into a family receiving public health insurance , to be invested and managed by the treasurer ’ s office until the child turns eighteen . The money could then be used to buy a car or home , pursue education or training , or start a business in Rhode Island .
Diossa estimates the trusts would accumulate $ 12,000 to $ 15,000 over the course of eighteen years . The bills , sponsored by Senator Melissa Murray ( D-Woonsocket , North Smithfield ) and Representative Joshua Giraldo ( D-Central Falls ), earmark the annual unclaimed property funds typically returned to the general budget as the source to fund the accounts for about 4,600 children annually .
“ We predict an economic output of $ 50 million that ’ s going to go back into the state coffers through taxes , retirement fees [ and ] car registration ,” Diossa says . “ I think it ’ s important to realize that the state is going to get back more in the long run .”
The house bill was held for further study in April , signaling that the proposal will not advance this year , but Diossa plans to continue lobbying for baby bonds and resubmit legislation next session .
The idea of baby bonds has been gestating for more than three decades .
In the 1970s , the federal government began to seed asset-building perks into the tax rules for those with sufficient incomes , such as deductions for mortgage interest and state and local taxes on owneroccupied homes , as well as tax-deferred savings plans for retirement and college education . But poor people were effectively barred .
“ All programs that were providing income also had asset restrictions . The logic was , if they had money , the government shouldn ’ t give them money . Poor people were , in public policy , discouraged from asset accumulation ,” says Michael Sherraden , a former social worker and founding director of the Center for Social Development at the Brown School at Washington University in St . Louis .
In 1991 , Sherraden called for another shift in the way society addressed poverty . His book Assets for the Poor suggested the government should help low-income people build their financial futures , not just provide income support .
“ It introduced the idea that even poor
34 RHODE ISLAND MONTHLY l JUNE 2024