Gov. Phil Murphy is looking to give New Jersey's next generation of residents a head start on finances as soon as they are born.
Every child born to a household that earns under around $131,000 yearly would get $1,000 deposited in the bank to be used once they turn 18 under Murphy's "baby bonds" proposal revealed Wednesday. The money will gain interest over the years.
“Now is the time for bold ideas that will give the next generation of New Jerseyans a head start,” the first-term Democrat tweeted ahead Wednesday's announcement in Paterson.
Murphy said "baby bonds" would be a "modest investment" to help close racial and economic inequalities. He and other officials noted Wednesday the wealth gap facing Black and other minority households, especially, but said the program would purely be based on economic standing.
The coronavirus pandemic has "exposed deep rooted inequities in our society" that "baby bonds" can address, Murphy noted.
Murphy said that $1,000 in a state-managed savings account will go to any child born into a household earning about five times the federal poverty level or less.
“I did it because it is bold, it is broad and it gives us hope that the generation being born in the midst of a pandemic may be able to do better than the one that lived before it,” Murphy said.
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The funds – which could be used toward college, a new home or opening a small business – wouldn’t be available until the person turned 18. Murphy didn't rule out more money being added to the accounts over the years if the state's budget allows.
The idea of “baby bonds” isn’t a new one in New Jersey. Last year while running for president, New Jersey Democratic U.S. Sen. Cory Booker proposed providing every child born in the U.S. with a $1,000 savings account, reported CNBC.
The state legislature would need to approve "baby bonds" legislation before money goes into accounts of newborns.
During Wednesday's "baby bonds" announcement, Murphy announced seven new coronavirus deaths to bring the confirmed death toll to 14,220.Nearly 195,000 positive coronavirus cases have been reported in the state.