To tackle New York City’s persistent racial wealth disparity, the city will create savings plans next year for every public kindergarten student that will have a minimum deposit of $100 in each account as part of a slate of economic justice programs in honor of Juneteenth, Mayor Bill de Blasio announced Thursday.
“Juneteenth marked the end of slavery, but not the end of systemic, structural racism in America,” de Blasio said in a statement. “To begin to repair (the) harms of the past, New York City is investing in the future and building generational wealth.”
While de Blasio called the new savings plans “baby bonds,” they are not actually bonds but 529 college savings accounts in which the city will invest $15 million in fiscal year 2022.
The citywide program is an expansion of a pilot program with the nonprofit NYC Kids Rise, launched in Queens in 2016, which set up accounts for college and career training for more than 10,000 students in District 30.
@NYCCouncil budget response proposal I championed picked up by @NYCMayor to provide every NYC public school student with assets for a college education. Will start in Sept ‘21. TY @NYCKidsRISE for designing the program & piloting it in @nycdistrict30. TY to The Gray Foundation.
— Daniel Dromm (@Dromm25) June 17, 2021
It was not immediately clear whether the city’s contributions to the new 529 accounts will be determined by parental income, or which agency or department will manage the accounts.
While the number of New York City children projected to enroll in public school kindergarten next year was not immediately available Thursday, there were an estimated 521,255 children under the age of 5 in New York City in 2019. The city’s public school system is majority low-income, with 72.8% of students experiencing poverty according to the Department of Education.
Lower-income families are much less likely to open college-specific savings accounts, the Wall Street Journal reported.
“Racial inequity is not only about bias and trauma — it is perpetuated by an enormous wealth gap,” First Lady Chirlane McCray said in the statement, adding “the median net worth of white households is approximately eight times as much as that of Black households.”
The Connecticut legislature passed a law last week establishing CT Baby Bonds, “an anti-generational poverty and racial equity program that will directly address long-standing wealth disparities in Connecticut while also generating long-term economic growth,” according to a release from the state treasurer’s office. Under the Connecticut policy, participants will be children born under the state’s Medicaid program, and they can access the funds once they turn 18 and complete a financial education requirement. The CT Baby Bonds can be used for education, to buy a home in Connecticut, to invest in a business within the state, or for retirement savings.
New Jersey Senator Cory Booker proposed a sweeping baby bonds policy as part of his presidential campaign platform in 2019, and New Jersey Governor Phil Murphy introduced a smaller-scale policy last year that ultimately was denied by the state legislature.
Other parts of de Blasio’s Juneteenth Economic Justice Plan announced Thursday include 2,800 four-year CUNY scholarships for Black and low-income students, and a program to provide 200 Medgar Evers College students with paid internships, career guidance, and work experience.