Latest news with #Children'sFutureActandFund
Yahoo
12-03-2025
- Business
- Yahoo
Lawmakers consider proposal to create new trust fund babies
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. SUPPORT: YOU MAKE OUR WORK POSSIBLE '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. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Yahoo
15-02-2025
- Business
- Yahoo
State treasurer opposes baby bonds bill passed in committee, backs alternative bill
Feb. 14—Most Democratic legislators and advocates seem to agree on the concept of baby bonds, or creating publicly funded trust accounts for New Mexico's babies. But how exactly the state should roll out such a program is a little more fuzzy. House Bill 7, the Children's Future Act and Fund, passed the House Health and Human Services Committee on Friday on a 5-4 party-line vote, much to the dismay of state Treasurer Laura Montoya. "I want to be clear: I have nothing to do with the writing of that bill. I do not support that bill," Montoya told the Journal later on Friday. "I do support baby bonds." The legislation, with a $5 million ask, would create trust funds for babies born in New Mexico on or after Jan. 1, if they graduate from a New Mexico high school. The money could be used for education, housing, retirement, entrepreneurship or investment opportunities. Partnership for Community Action helped craft the bill, and Deputy Director Teresa Madrid told the Journal her organization will continue to work with the Treasurer's Office for a "policy that allows us to bring baby bonds to fruition as a way to invest in children." "Baby bonds are a good investment today to support families in breaking cycles of generational poverty, to close the wealth gap in our communities and to really, truly invest in our communities in ways that they can utilize for financial stability in the future," Madrid said. Montoya before the session was in talks with the sponsors of HB7 — Reps. Linda Serrato, D-Santa Fe, and House Speaker Javier Martínez, D-Albuquerque — about supporting the effort. But she said the bill changed significantly since then. But the treasurer still supports baby bonds, and that's why she's instead backing a bill introduced later on Friday in the Senate, Senate Bill 397, sponsored by Sens. Moe Maestas, D-Albuquerque, and Leo Jaramillo, D-Española. HB7 has fundamental problems, Montoya said, like its $5 million appropriation request, which the treasurer said is too small to provide for all the children born in New Mexico. The Senate bill asks for a $500 million appropriation instead. Under that appropriation, which would maintain the fund for decades, beneficiaries could pull out $20,000 to $25,000 by the time they reach 18, Montoya said, and if they save the money until they're 35, they would get about $75,000. The bill applies to any baby born after July 1. Montoya also found issues with the investment style in HB7, which pins the responsibility on the Treasurer's Office as well as the State Investment Council, and sends portions of the money to the Treasurer's Office rather than keeping it in its investment pool. "You'll see a very big difference between the two bills. Ours has been a very thoughtful bill that talks to professionals about how to get it done," Montoya said. However, the Senate bill backed by the treasurer would also need to be approved by the House of Representatives in order to advance to Gov. Michelle Lujan Grisham's desk for final consideration. In the House Health and Human Services Committee on Friday, GOP Whip Alan Martinez of Bernalillo mentioned the Treasurer's Office opposition to the bill in his line of questioning. "We felt that this was a pragmatic approach that allowed for building the foundation within the realm of the Legislature overseeing that process that gave transparency to it," Serrato responded. "This doesn't create a $600 million fund right now that's going to start investing in kids tomorrow. ... We wanted to give it that opportunity to grow publicly." The GOP Whip also questioned why the Legislature should codify baby bonds instead of directly investing in areas like housing or education. "Baby bonds do not at all replace direct pay and giving money now; they complement it by ensuring that children from all backgrounds don't just survive childhood, but they have a financial foundation to thrive as adults," said Nichelle Gilbert, executive director of Partnership for Community Action, in response.
