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Spotlight
1.2 Million Children with Children’s Savings Accounts
Today, Prosperity Now releases its annual report on the Children’s Savings Account (CSA) field, Innovation Propels the Movement: The State of the Children’s Savings Field 2021 [[link removed]]. The report shows that the field has hit a major milestone—surpassing over 1.2 million children and youth with CSAs. That’s over a 30% increase from 2020. This achievement comes as the field celebrates other significant milestones, including the 10th anniversary of San Francisco’s Kindergarten to College program—the first citywide CSA program—and the full launch of Opportunity LA, both discussed below. Based on the annual CSA program survey, the report includes an overview of trends among CSA programs and spotlights innovations in the field, such as pairing CSAs with cash assistance and the development of the first Baby Bonds programs in the country. Read current and past State of the Children’s Savings Field reports here [[link removed]].
Policy Updates
Illinois Appropriates Funding for a Statewide CSA program
The Illinois General Assembly recently appropriated [[link removed]] $2.5 million to fund the Illinois Higher Education Savings Program, a statewide CSA program, following extensive advocacy from the Financial Inclusion for All Illinois coalition [[link removed]]. The program, which was signed into law in 2019 but not funded previously, will begin receiving funding in 2023. All children born or adopted after December 31, 2022, will be automatically enrolled, and each child will receive a $50 initial deposit in a 529 account. Senator Cristina Pacione-Zayas and Representative Lakesia Collins also passed a bill this session to prioritize equity in the program’s implementation, including the option to provide additional deposits to children from low-income households.
Washington State Allocates Funding to Study Baby Bonds
Washington State’s budget, which was signed on March 31st by Governor Jay Inslee, includes a $450,000 appropriation to the State Treasurer’s Office to create a committee to study the impact of creating a state Baby Bonds program on wealth inequities and financial stability among state residents. The committee will provide recommendations on the design of a statewide Baby Bonds program based on the research. State Treasurer Mike Pellicciotti had originally promoted legislation to create a statewide Baby Bonds program called the Washington Future Fund [[link removed]]. Although the idea generated significant interest among legislators, it did not pass during this short legislative session. The Treasurer plans to introduce revised legislation in next year’s session based on the committee’s recommendations.
A Wisconsin Bill Would Provide Every Child in the State with a Savings Account
New legislation introduced in the Wisconsin State Assembly would provide a savings account to every child in the state at birth [[link removed]]. Every child born or adopted in Wisconsin would be automatically enrolled in the program and accounts would be seeded with a $25 initial deposit, into which families could make additional deposits. These “401Kids” accounts would be operated by the Department of Employee Trust Funds and invested “like a retirement account that can provide 7-8-9% interest.” Eligible uses of the funds would include education expenses, medical emergencies, a first-time home purchase or saving toward retirement.
Massachusetts Creates a Baby Bonds Task Force
Massachusetts State Treasurer Deborah Goldberg recently announced the launch of a Baby Bonds Task Force to provide recommendations for a state-level Baby Bonds initiative. [[link removed]] This announcement comes after Massachusetts Representative Ayanna Pressley (D-MA-7) co-introduced with Senator Cory Booker (D-NJ) the American Opportunity Accounts Act [[link removed]], which would provide every child born in the US with a federally-funded account for their future, with the largest deposits going to children from households with the least resources. The task force will pull from a diverse group of individuals and organizations, including “leaders in racial wealth equity, community engagement, child welfare, and asset-growth initiatives.”
In the News
Bloomberg Businessweek Highlights Momentum Around Baby Bonds
A new piece from Bloomberg Businessweek [[link removed]] explores the life story of Darrick Hamilton—professor at the New School and founder of the Institute on Race, Power and Political Economy [[link removed]]—and how he came to develop the idea for a national Baby Bonds program [[link removed]] that could help close the racial wealth gap. Under Hamilton’s proposal, a trust fund for each child born in the US would be established and guaranteed by the federal government, with children from households with the least wealth receiving the most funding. Children would have access to the funds at age 18 and could use them for education, homeownership, small business start-up costs, retirement savings and other wealth-building purposes. The article explains how this idea, which once seemed outside the mainstream policy debate, has taken off at the state and local levels over the past two years. Shira Markoff [[link removed]], Policy Fellow at Prosperity Now, contributed background information for the article and is quoted in it, regarding the expansion of Baby Bonds legislation at the state level. Connecticut and the District of Columbia established Baby Bonds programs in 2021, and several other states have pending legislative proposals [[link removed]]. You can hear more about Darrick Hamilton's work with Prosperity Now on Baby Bonds through our A Brighter Future with Baby Bonds: How States and Cities Should Invest in Our Kids [[link removed]] webinar with The New School’s Institute on Race, Power and Political Economy (IRPPE) [[link removed]].
Los Angeles Launches Opportunity LA
Last month, the city of Los Angeles officially launched Opportunity LA [[link removed]], a CSA program open to all first graders in the Los Angeles Unified School District. 44,363 savings accounts have been opened already and students will be automatically enrolled in the program, immediately receiving a $50 deposit. The launch of the program comes after a successful pilot program in Spring 2021, which provided accounts to first graders at high-need schools in Los Angeles in partnership with CitiBank.
San Francisco’s Kindergarten to College Celebrates its 10th Anniversary
San Francisco’s CSA program, Kindergarten to College (K2C [[link removed]]) celebrated its belated 10th anniversary on April 26th [[link removed]] (the celebration was delayed by the pandemic). The program, which was the first universal, municipal CSA in the nation, helped propel the growth of the CSA movement by inspiring officials in other cities and states to start their own programs. Since the program’s launch in 2011, K2C has opened more than 49,000 accounts with over $11 million in accounts for participants’ futures.
Mott Foundation Provides a Grant to Support Implementation of CalKIDS
The ScholarShare [[link removed]] Investment Board, which runs California’s 529 college savings plan, recently received a $750,000 grant from the Mott Foundation to support the implementation of the California Kids Investment and Development Savings (CalKIDS) Program [[link removed]]. The grant will be used for marketing and building awareness about the new program. The CalKIDS program, which is currently in planning, will provide every child born in California, as well as students from low-income households and youth in foster care in 1st through 12th grades in public school, with an account seeded with an initial deposit. The program will serve an estimated 450,000 newborns and 3.7 million low-income public-school students, which will make it the largest statewide CSA program in the country.
Upcoming Events
Webinar – State of the Field: Children’s Savings Accounts [[link removed]]| Prosperity Now| May 17, 2022, 2pm ET | Register here [[link removed]]
In Person/Virtual Event – Children’s Savings Accounts: Building Assets for America's Future | CSA/CDA Policy Group | May 11, 2022, 12-4pm ET | Washington, DC | Space for in person is limited; register here [[link removed]]
Virtual Event – What Does Economic Security Look Like and How to Get There | University of Michigan School of Social Work | May 18, 2022, 12-3pm ET | Agenda and registration here [[link removed]]
In partnership,
Shira Markoff
Policy Fellow
Prosperity Now
1200 G Street NW, Suite 400, Washington, DC xxxxxx
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