(The Center Square) – Gov. Phil Murphy wants to give a $1,000 “baby bond” to anyone born into families making $131,000 or less per year, but critics say it isn’t the government’s role to create savings plans for children.
The proposal, included in Murphy’s revised budget proposal for the 2021 fiscal year, is expected to cost roughly $80 million annually. Based on current rates, a $1,000 bond would be worth about $1,270 in 18 years, The New York Times reported.
About 80 percent of the Garden State’s population makes $131,000 or less per year, which is 500 percent of the federal poverty level. In 2021, approximately 72,000 babies could be born into families that meet the income criteria.
There “are a lot of kids who were born 18 or 20 years ago, who if they had a little bit more wind in their sails from moment one, a little bit more, some helping hand that could have put them into a different and better spot, who knows what would be happening today?” Murphy, a Democrat, said during a news conference this week.
“If nothing else, for 18 or 20 years from now, that’s one,” Murphy added. “It’s not a huge step, but it’s a modest step that, God willing, can put communities into better places.”
Residents can withdraw those funds when they reach 18 years old. The bonds continue to mature after a resident turns 18 years old, Murphy told reporters.
Murphy also tied the need for the bonds to the “inequities that have been laid bare” by the COVID-19 pandemic and social unrest sparked by police shootings in Minnesota and Wisconsin.
“I feel strongly, our responsibility to not put things in place that we know will directly redress some of those inequities, and this program is exactly that,” Murphy said. It’s “not exactly an overwhelming – it’s not going to solve everything. It’s a fairly modest step, but it’s symbolically an incredibly important step.”
While the idea of “baby bonds” has previously garnered support from prominent Democrats such as U.S. Sen. Corey Booker, D-N.J., and former U.S. Sen. Hillary Clinton, D-N.Y., New Jersey Republicans were unimpressed with the proposal.
“Government is not in the business of creating savings plans for children. These ‘Baby Bonds’ are going to cost our state $80 million a year,” state Sen. Jim Holzapfel, R-Brick, said in a statement. “This is just another scheme by our Governor to ignore the real problems in our state, such as high property taxes, severe school funding cuts and a failing economy because of his extended executive orders.
“It is crazy to imagine any New Jersey family that would want to take out a loan with interest to turn around and put the money in a bank account. But that’s exactly what Murphy wants to do,” Holzapfel added. “It’s a reckless fiscal gimmick and waste of taxpayer dollars.”