Maryland Council Member Introduces First County-Level Baby Bonds Bill

As income inequality persists and the wealth gap looms over many Americans, particularly communities of color, there is growing interest among policymakers for establishing “baby bonds”—giving every child in America a government-funded savings account at birth. Connecticut became the first to pass legislation in 2021, providing eligible babies with $3,200 in investment accounts. Washington, D.C. initiated a similar program, with potential funds growing to $25,000 by age 18. In 2022, California followed, offering up to $8,000 to eligible children who have lost a parent to COVID-19 or are in long-term foster care. Will Jawando, a council member in Montgomery County, M.D., just outside Washington, D.C., and several of his colleagues this week introduced the first baby bonds legislation at the local level. Spotlight spoke with Jawando about his legislation; the transcript has been lightly edited for length and clarity.

Why don’t we go ahead and jump in? Council member, how did you get interested in baby bonds?

Well, you know, I’ve always been really focused on expanding opportunity. We have a mantra from when I first ran for office and is now on our office seal: “opportunity together.” I grew up very low income here in Montgomery County. I was with my mom alone for several years when my parents got divorced, lived in poorly maintained rental housing, and saw a lot of my friends in similar situations or worse. And so, I had that lived experience, but also was very focused from an early age on the disparities, depending on where you lived and your background and access to opportunity.

I ended up becoming a civil rights lawyer and worked on Capitol Hill for a number of years. I worked for some great folks—Nancy Pelosi, Barack Obama, Sherrod Brown in the Senate and then in the Obama White House and Department of Education. And now I’m in my sixth year, my second term on the county council, representing the community I grew up in and I chair the education committee. I give you all that by way of background, just to say that I’m very attuned to the disparities both locally and nationally, and the things that get in the way of having access to opportunity and building generational wealth and being able to have a life-sustaining wage and quality housing. I’ve really been focused in my time as a staff person, but also as an elected official representing over a million residents here in a very, very diverse county, trying to give people opportunity and to kind of correct the systemic inequities of the past.

I launched a guaranteed income pilot two years ago here in Montgomery County, the first in Maryland, where 300 families are receiving $800 a month for two years. The pilot will wrap up this summer and we’re working on how do we take the learnings from that to change the way we give people support in a dignified way. Just last year, we passed a rent stabilization bill, the largest community in the country, at least in the last 30 years to do so. We capped it at 3% plus inflation with a hard cap at 6% and we’re working on the regulations now. Those will be passed in the next month or two and that’ll go into effect for over 40% of our county who rents. You’re talking about nearly 400,000 people, who are disproportionately Black and Latino and immigrant.

And now this effort, the Child Investment Fund, which is another way to tackle the racial wealth gap and also say we want people to come back and live here in Montgomery County and start a business, go to school, buy a home. It’s an inclusive but progressive way to help attack those same issues.

And this is the first proposal like this at the county level, right?

Yes. First at the county and the first at any local jurisdiction, city, or county, is what I’m told.

Tell me how this would work.

It’s called the Child Investment Fund and because of the rules around carrying debt, it won’t be a traditional baby bond program like you’ve seen at the state level or federal level because we can’t carry debt for an individual person. So, there won’t be individual accounts, but it would be one account, an interest-bearing child investment account. Based on births in the county, which right now are around 12,000 babies a year, the way the bill is written, it’ll put in $1,800 a year for each projected birth.

Any child that was born after Jan. 1st, 2024, in Montgomery County would be eligible and starting 18 years after that, up until age 36, you become eligible to make an application through our county to withdraw your fund, whatever that has accrued to. We’ve seen some rough estimates, but let’s say for example, it’s $20,000. You could apply to use that in four ways: starting a business in the county, buying a home, putting money into an investment account for retirement, or educational expenses. Obviously, this is subject to the appropriations process, but the bill lays out that the county should make this investment every year. If there’s some huge recession, there may be some years that it’s not quite equal to the amount that goes at birth, but the idea is that there’s this big pot of money that will grow every year over the next 18 years.

And the last component of the bill is that while it’s universally open to everybody, which is really important for me, the payments will be made progressively, based on wealth and income at the time of application. So, if you’re a Medicaid recipient, for example, you’d receive more than someone who’s earning $200,000 a year whenever they apply.

So, the accrued interest would vary depending on income level?

Exactly.

And just so I’m clear, again, it would be one big fund that everyone would be part of?

Yes, and that’s the way we have to do it at the local level. It would be one big fund that you would apply to once you reach the age of eligibility. And eligibility criteria are that you have to have been born in the county, you have to be living in the county when you apply, and it has to be for one of those four purposes I talked about.

And what’s the price tag that you’re presenting to your colleagues?

The math on that is 12,000 times $1,800, which is about $22 million—which is big. We have a $7 billion budget, but I think for something of this magnitude that in a big way says, we want you to stay here in Montgomery County and grow your business, we want to attack the racial wealth gap and give people a head start, I think it’s worth the investment. Again, we’ll go through the legislative process and see what happens.

Are there particular things that folks in D.C. and Connecticut have learned in the early stages of their programs that have informed what you’ve done?

That’s a good question. Connecticut was the first, and they’re only two or three years into this and D.C.’s even less. We’re all going to be learning things. No one’s distributed any money, so we’re all going to be learning things over the next 16 to 18 years. One of the things we set up, similar to other legislation, was a child investment fund advisory committee, which will make recommendations to us. And one of the things they’ve been charged to figure out, for example, is what is the best way to pay out progressively based on wealth and income. We haven’t determined that yet, so it will need to either be done by regulation or updates to the legislation.

The perception is that this is a policy that can appeal across party and ideological lines. Do you feel that that’s the case?

I do for two reasons. We’re all Democrats on my council, but obviously Democrats are a big tent. We have conservative folks and more moderate folks. I tend to be on the more progressive side of things, and so in talking to colleagues, I do think that this will have broad appeal for a couple reasons. One is that it’s open to everybody and second is that this is investing in our homegrown talent to come here, stay here, start a business, buy a home, invest in retirement. The other appeal is that it’s progressive on the back end. I think that makes sense to a lot of people, that people who need it more should get a little more. So, I think because of those reasons, it will have a broader appeal. We’ll see what people say as the debate begins But that’s the hope.