Maryland Comptroller Brooke Lierman has unveiled a comprehensive assessment of a proposed statewide “Baby Bonds” program, evaluating its feasibility and potential economic effects. The initiative would establish publicly funded trust accounts for children from low-wealth families, seeded with a $7,000 investment per eligible newborn. If managed effectively, these funds could grow to more than $22,000 by the time beneficiaries reach age 18, offering a financial foundation for higher education, homeownership, or entrepreneurship. However, launching such a program would require an initial outlay of hundreds of millions of dollars from state coffers.
Commissioned by the Maryland General Assembly, the report examines how baby bonds could help narrow the racial wealth gap, promote upward mobility, and enhance the state’s long-term economic resilience. It draws insights from similar programs in other jurisdictions, including Connecticut—the first state to fully implement such a policy—as well as Washington, D.C., Rhode Island, and Vermont. Maryland is already piloting a limited version of the concept and is among more than a dozen states that have explored legislative pathways for broader adoption.
Data highlighted in the report reveals stark disparities in household wealth: white families in Maryland hold a median net worth of $408,832, nearly four times that of Black households, which stands at $109,898. Homeownership rates reflect a similar divide, with nearly 80% of white households owning their homes compared to roughly 50% of Black households. Proponents argue that baby bonds could begin to address these systemic imbalances by providing disadvantaged children with capital accumulation opportunities typically inaccessible at birth.
The analysis estimates that funding a $7,000 deposit for each child born to a Medicaid-eligible family—approximately 30,000 annually—over five years would require a $567 million upfront investment. In return, the state could see around $1.86 billion in investment returns, enabling over $2.4 billion in total distributions to roughly 80,000 young adults between ages 18 and 30. Long-term benefits may include increased tax receipts and reduced demand for public assistance programs. The report also considers administrative models and potential agencies responsible for managing the accounts.
Comptroller Lierman emphasized the moral and economic imperative, stating that too many residents are excluded from wealth-building due to circumstances beyond their control. She described baby bonds as a powerful mechanism to help individuals gain financial stability and achieve their full potential.
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Maryland comptroller releases report on economic impact of statewide “Baby Bonds” program
Maryland Comptroller Brooke Lierman released a report on the feasibility and potential impacts of implementing a statewide “Baby Bonds” program. n n”Baby Bonds” are a government policy providing a set amount of money at birth for children of lower-income families. In theory, that money would grow as they age. n nFor example, $7,000 state investment for each eligible child would grow to over $22,000 by the age of 18. n nHowever, this would require an initial investment of hundreds of millions of dollars from the state. n nWhat did the report review? n nThe Maryland General Assembly called for the report, which shows how publicly funded trust accounts for children born into low-wealth families would help close the racial wealth gap, promote economic mobility, and strengthen the state ‘s long-term economic performance. n nThis report looked at the big aspect of baby bonds programs that have been used or proposed in other states, outside of Maryland. n nThe comptroller ‘s office said it estimated the program costs and potential funding sources for Maryland and considered entities that could be responsible for implementation. n n”Too many Marylanders are locked out of wealth-building opportunities simply because of the circumstances they ‘re born into,” Comptroller Lierman said. “Baby Bonds offer a powerful tool to help Marylanders gain their financial footing and reach their full potential.” n nA breakdown of the report n nLierman ‘s office said that an estimated 40% of Marylanders do not earn enough to afford basic expenses like utilities, food, and prescriptions, which deters them from saving or raising enough money for their children. n nThe Comptroller ‘s Office ‘s report shows that baby bonds can help people in poverty build wealth. n nThe Comptroller ‘s Office detailed several factors for a Baby Bonds program, including: n nThe persistent racial wealth gap in Maryland n nAccording to research, white households have nearly four times the wealth of Black households in Maryland, and the median net worth of white households is $408,832, compared to $109,898 for Black households. n nNearly 80% of Maryland ‘s white households are homeowners, but only about half of Black households in Maryland own a home. n nThe landscape of Baby Bonds programs across the United States n nIn 2023, Connecticut became the first state to fund and implement a baby bonds program. n nWashington, D.C., Rhode Island, and Vermont have also approved baby bonds programs. n nMaryland is among more than a dozen states to have proposed baby bonds legislation. n nMaryland is one of nine states that have a baby bond pilot program in place on a smaller scale. n nThe Maryland Comptroller ‘s Office says that long-term economic benefits include increased tax revenue and reduced reliance on public assistance. n nEstimated costs for Maryland n nThe report determined that a program that provides a $7,000 seed investment for all babies born on Medicaid (approx. 30,000 annually) over five years could require a $567 million seed investment by the state. n nAnd, over time, the state could yield an estimated $1.86 billion in investment earnings, allowing the state to distribute over $2.4 billion to about 80,000 beneficiaries between the ages of 18 and 30 (depending on when they access their funds). n nAdministration responsibility