Lawmakers consider proposal to create new trust fund babies

Yahoo

12-03-2025

Karina Burciaga (left) plays with her 2-year-old daughter, Alison Arroyo. (Photo courtesy AP-OD)
When Karina Burciaga became a parent, she also took on a lot of worries: what should her daughter be eating, how early should she start reading, what will her future look like and what can she do now to impact that future?
Burciaga's daughter Alison Arroyo is only 2 years old, but Burciaga said she wants her daughter to be ready for adulthood. She opened an investment account for Alison at Charles Schwab and adds $75 to $100 to it each month.
'It's not a huge amount, right, but it's adding up,' Burciaga told Source NM. 'It's just interesting to see how…in about 18 years she'll have access to money that can really change her life.'
While trust fund babies as a concept usually implies wealthy parents, several states have passed legislation that creates a trust fund for each child born in the state, known as baby bonds. New Mexico lawmakers have proposed a similar funding program this session.
House Bill 7, the Children's Future Act and Fund, would establish a trust fund for children born in New Mexico after Jan. 1, 2025. Children would have access to the fund once they turn 18 and graduate from high school or earn a high school equivalency. Trust fund recipients also would have to maintain residency in New Mexico and complete a financial literacy program. The money can be used for education, housing, entrepreneurship or investing.
'Many families across New Mexico may be middle class, but they're still living paycheck to paycheck. And so having an investment for their future is a big piece,' Sponsor Rep. Linda Serrato (D-Santa Fe) told members of the House Appropriations and Finance Committee during the initial hearing on March 3. Speaker of the House Javier Martínez (D-Albuquerque) and Rep. Patricia Roybal Caballero (D-Albuquerque) are also sponsors.
The bill also creates a task force that will complete the design of the program and its implementation and report recommendations to the governor and Legislature before the end of the year.
The bill does not specify how much money the state would invest for each child, but Serrato explained that based on the advocacy organization's pilot program, approximately $6,000 would be allocated for each child at birth, but the task force would determine the actual amount. By the time the children are 18, the investment will have grown to about $20,000, though the final amount is not a guarantee. Serrato noted the ultimate goal is to help generate some generational wealth among New Mexico families and set more people up for success.
The advocacy organization Partnership for Community Action, in collaboration with Prosperity Works and Rio Grande Credit Union, awarded 15 pilot bonds to New Mexico children several years ago. A representative from the organization and parents involved in the pilot program spoke in favor of the bill during an initial hearing before the House Appropriations and Finance Committee on March 3.
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'I do not want [Alison] to work two jobs in college and face the same exhaustion and burnout that I faced,' Burciaga told committee members during the hearing.
She told Source NM that she earned her bachelor's degree in Journalism and Mass Communication from the University of New Mexico in 2015, but would like to set her daughter up to not have to work so many hours while focusing on her education.
'If she needs these funds to help her get through college, that's great, or I would love her to maybe buy a property whenever she's in college and save that money and not pay rent,' Burciaga said, adding that investing in property could even generate some passive income for her daughter at some point in her life.
Leslie Garcia Moreno, another mom who spoke in favor of the bill during the hearing, said the bill would give her children 'a greater chance of achieving a stress-free, debt-free education and life.'
'Our state has the resources to invest in the next generation and doing so will create a ripple effect,' she said. ' This initiative is a direct investment in our economy, ensuring that all families regardless of background, have the opportunity to build generational wealth and thrive.'
Several committee members voiced concern that HB7 is not ready to be a bill, but rather a memorial to create a taskforce and research the fund's feasibility. However, the bill passed the House Appropriations and Finance Committee Monday, March 10 and will head to the House floor for a vote.
Senate Bill 397, the New Mexico Next Generation Act, is a similar bill proposing baby bond investments and is sponsored by Sens. Antonio Maestas (D-Albuquerque) and Leo Jaramillo (D-Española). The bill is also backed by the New Mexico State Treasurer Laura Montoya.
According to the fiscal impact report, SB397 would apply to babies born after July 1, 2025. It would require that the Department of Finance and Administration develop rules for the program and the State Investment Council manage the investments. HB7 proposes splitting the management of the investments between the State Investment Council and the State Treasurer's Office.
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