Building Wealth for All: The Power of Baby Bonds in Connecticut

This article is the final contribution in a three-part series Building Wealth for the Next Generation: The Promise of Baby Bonds—a coproduction of NPQ and the Institute on Race, Power and Political Economy at The New School for Social Research in New York City.

On July 1, 2023, Connecticut made history by launching the nation’s first statewide baby bonds program to combat the state’s extraordinarily large wealth gap.

This baby bonds program provides every baby whose birth is covered by the state Medicaid program with a $3,200 grant, secured in a trust and invested until that child becomes an adult.

Between the ages of 18 and 30, that person can access the money and use it for education or job training, to purchase a home or start a business in Connecticut, or to save for retirement. It is an investment directly in people, intended to create generational wealth and to help level the playing field for young people across the state.

Connecticut may be the first state in the nation to take this policy step, but it surely will not be the last. Here, we look at how the state came to take on this program, what the potential impact of the program is, and why other states should strongly consider adopting similar programs of their own.

My Story: Growing Up in New Haven

Some of my earliest memories are in my parents’ convenience store on Congress Avenue in New Haven, CT.

In that store, I learned the basics of business and finance. But it was also where I learned about community. A lot of our neighbors that came into the store were just barely getting by. My parents were as empathetic and generous as they were hardworking. I learned that in our little corner of the world, we were all in it together.

In my neighborhood, economic inequality was just a fact of life. Despite living near Yale, an elite Ivy League university, the people I knew were working hard—really hard—and still struggling to get by, often trapped in cycles of poverty.

Changing state policy is challenging. Even as we worked inside the halls of government to secure funding…it was vital to also build a broad coalition.

Due to my parents’ hard work and sacrifice, I was fortunate to become the first in my family to graduate from college, but I knew that I had defied the odds. For most of my peers, opportunities like that were out of reach.

Without real-life examples of success, it was hard for many of my neighbors to imagine a more prosperous future. That’s why it’s been a priority for me to be that example for others and to never lose sight of my community obligations.

Seeding Generational Wealth

Now, as Connecticut’s state treasurer, I have a responsibility to live up to those obligations through the work of my office. My work is grounded in a vision to make Connecticut more equitable and to expand opportunities for all residents, especially those who have been left behind—and the baby bonds program is a powerful example of what that looks like in practice.

Changing state policy is challenging. Even as we worked inside the halls of government to secure funding and launch the program, it was vital to also build a broad coalition across the state. Each leader and organization that joined had a unique reason to get involved, but all realized that poverty in Connecticut doesn’t stop at a town’s border.

The baby bonds program doesn’t just provide financial capital. It represents hope and opportunity for families who have often been stuck in poverty for generations. Baby bonds offer a tangible pathway to economic mobility, fundamentally expanding opportunities for children born into poverty.

Why State Treasurers Matter

As a state treasurer, my role goes beyond managing day-to-day financial operations; my job is about ensuring the overall fiscal health of the state. The state treasurer’s offices manage all state banking and credit relationships, ensure bills are paid on time, and oversee the state’s $56 billion in public pension funds, safeguarding the assets of state employees, teachers, and retirees.

My office also manages the state’s debt, bonding programs, and cash flow—overseeing investments in transportation, infrastructure, housing, childcare facilities, and more.

Undoing multigenerational poverty requires directly addressing the structural barriers that have created those conditions.

Additionally, the state treasurer’s office oversees programs like the Connecticut Higher Education Trust (CHET), and manages unclaimed property, ensuring resources are returned to their rightful owners.

What’s unique about the role of treasurer is that state investments made today often won’t bear fruit for 5, 7, or 10 years down the line—far longer than an election cycle. State treasurers have an obligation to consider the long-term future. Baby bonds, of course, are an investment whose true value will only be realized 18 to 30 years later.

For me, baby bonds fit into a bigger picture that reinforces state investments in education, housing, and other areas. Access to capital and economic opportunity are essential for Connecticut to thrive in the coming decades.

How to Implement Baby Bonds: A Call to Elected Officials

 Getting baby bonds enacted into law in Connecticut wasn’t easy. When you tell people the benefits won’t fully materialize for 18 or more years, it can be hard to rally support. But that’s exactly why this policy is so important. Undoing multigenerational poverty requires directly addressing the structural barriers that have created those conditions.

The scale of economic inequality in Connecticut is astounding. Despite being one of the wealthiest states in the country, Connecticut has one of the largest wealth gaps. The top 1 percent of Connecticut households earn nearly 37 times more than the bottom 99 percent.

In fact, in 2023, the state’s median Black household income was just 57 percent of the median White household income, and Latinx households earned only 53 percent of what White households earned. The racial wealth gap is even more severe when considering assets like homeownership. Homeownership among Black and Latinx families in Connecticut is more than 35 percentage points lower than for White families.

These disparities in wealth and income leave far too many children born into poverty with no realistic chance of escaping it.

A Bipartisan Bridge to Shared Prosperity 

One of the most remarkable aspects of baby bonds is its bipartisan appeal. The coalitions that drove baby bonds to become state law included Republicans, Democrats, business leaders, local officials, and community advocates—all of whom saw the long-term value of this investment.

Around 16,000 children will be born eligible for the program each year….This is just the beginning.

The strength of our coalition was rooted in the knowledge that every city and town would benefit. Baby bonds represent a way to keep young people rooted in their communities. They can stay, build lives, and contribute to the local economy, knowing they have a financial foundation waiting for them when they turn 18.

In short, this is not about a program that works for some; it is about creating a pathway for all of Connecticut’s children, no matter what zip code they are born in or what family they are born into. And we couldn’t have done it without leaders like my predecessor, state Treasurer Shawn Wooden, and state Senator Pat Billie Miller, who both championed this initiative, along with many others, and helped make baby bonds a reality.

Building for the Future: The Power of Big Ideas

The state has laid some solid groundwork, and the early results are promising. Around 16,000 children will be born eligible for the program each year, with the state investing up front to cover the investments for at least 12 years of births.

This is just the beginning. As more states look to implement baby bonds or similar programs, we’re witnessing a movement that could reshape the very foundation of economic opportunity in this country. For people in positions of authority, such as my fellow state treasurers, I urge them to think big.

Policies like baby bonds won’t fix everything, but they represent the structural change needed to address the vast US wealth divide. The nation will not successfully address centuries of economic inequality without bold solutions that are commensurate with the scope and scale of the challenge.

For me, baby bonds are not just a policy—they are a tool to help communities support each other. It is about giving kids growing up in communities like mine—or any of the 169 cities, towns, and small municipalities across Connecticut—a real shot at a brighter future. It’s about reimagining what’s possible.