24 October, 2023
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.
