“Baby bond” idea has potential
The Albuquerque Journal had a write up about a concept that will be considered in the 2025 legislative session called “Baby Bonds.” Before getting to the policy idea itself, the “key” stat may be the collapse in births in New Mexico: “There were 21,614 babies born in New Mexico in 2022, down from 24,503 births in 2019, according to state Department of Health data.” That’s a decline of nearly 12% in 5 short years.
But, in terms of the idea itself. While some details are not clear, the gist of the plan is to use a small portion of New Mexico’s massive surplus to provide $6,000 bonds for each child born in New Mexico. The bond would be given to ALL New Mexico babies regardless of income and the money would be invested by the State Investment Council to be used for funding for education, housing and other expenses upon reaching their 18th birthday.
The total annual cost would be $120 million at current birth rates which is a tiny fraction of the State’s $3.5 billion annual surpluses.
We have a few thoughts:
- If the state is already providing “free” college why limit the bond to when the child turns 18? In fact, why not bump up the amount in the baby bond (the State can afford it AND it could reduce K-12 education costs) and allow the child or their family to use the money for K-12 education expenses? This should be especially true considering the well-documented failures of our K-12 system.
- What if the child’s family leaves New Mexico by the time they turn 18? Are we going to be sending checks to families outside of New Mexico?
- If, as some predict, oil and gas revenues dry up and New Mexico’s budget is less robust than it has been will the State be willing/able to provide baby bonds out of permanent fund revenues?
