The California Legislature has a rep for introducing kooky bills-- from banning the spanking of kids under 3 years old to mandating the use of fluorescent bulbs.
Recently, a bill was introduced that was instantly slapped with the "kooky California" rap: it would provide a tax-free, long term savings account worth $500 to every newborn in the state. The backlash was immediate, and prompted Bob Dutton, a Republican State Senator who co-sponsored the bill with Democratic State Senator Darrell Steinberg, to pull out.
Conservative critics hammered the bill as one more incentive for illegal immigrants to infiltrate our borders and reproduce as much as possible. I can see it now: an impoverished Mexican couple is hemming and hawing about whether or not to leave all that's familiar behind in order to try and claw their way to a better life in the United States. What finally tips the scales? Of course: a $500 account that will be inaccessible for 18 years!
In all seriousness, the bill's intentions seem honorable. As someone who takes an interest in money and investments, I agree that most people need a nudge when it comes to saving for the future:
Nationwide, 25 percent of white children and 50 percent of nonwhite children grow up in households without any significant savings or resources for investment, SB 752 says.
Details are pending, but Steinberg said he envisions not allowing withdrawal of the state's $500 seed money unless the owner shows proof of enrolling in an educational program, buying a house, or possessing a retirement account.
With roughly 566,000 births annually, the program would cost $283 million per year-- less than 1 percent of the state's general fund.
Still, some conservative critics like Republican Senator George Runner think it's more important to build prisons.
Sacramento Bee columnist Peter Schrag likes the bill, but says it could use some finessing:
...should the state be handing $500 to those already born with silver spoons in their mouths? In an ideal (nonpolitical) world, the total cost of the program... would be concentrated on the neediest, and especially the 20 percent or so born into families below the poverty line.
He also thinks the legislation should allow the money to be spent in more flexible ways, but doesn't expect the bill to go far:
Ideally, shouldn't this bill also allow its beneficiaries to use their accounts to invest in small businesses, whether it's a computer consulting service, a welding shop, a hip-hop band or a corner taqueria? It could open doors to many other opportunities.
But unless it gets some Republican support, SB 752 won't go anywhere. When the highest priorities of a major political party are punishing the minority of Americans who happen to be kids of illegal immigrants and throwing more people in jail, hope goes to the back of the bus.
What say you, MTers? Is this a smart use of state money or a misguided attempt at leveling the playing field? Should the money go somewhere else, like providing universal health care to Californians or improving public schools? Take the poll...
