(Sacramento, CA) The California State Assembly has passed a ground breaking effort to reduce wealth inequality for all California children by a vote of 75-0. This effort complements Governor Newsom’s effort to expand child savings accounts similar to the program he started in San Francisco as Mayor.
AB 15 will create a statewide child savings account program by tasking the Scholar Share Investment Board to operate a master 529 account, owned by the state. Each child born in California will automatically be enrolled in the account at birth and receive an initial seed deposit of at least $25. Savings from the account could be used for a number of different higher educational purposes such as tuition at a college, university, trade school or graduate program; room and board; books; computers; and other related qualified expenses.
“We must be bold and invest in the next generation of entrepreneurs, scientists, and leaders,” stated Assemblymember Nazarian. “Wealth inequality is keeping the door closed on middle- and lower-income advancement nationwide. By creating a savings account for each child, we can jump start our children’s financial independence.”
Unfortunately, 25 percent of California households live in asset poverty. Similarly, research shows that 55 percent of Californians are rent burdened and 15 percent experience severely delinquent student loan debt.
The intention of the bill is to ensure all California children have the financial assets they need to succeed, and level the playing field, by eliminating the administrative barriers to start saving. As California’s cost of living continues to rise, it is imperative for children to understand the importance of long-term savings.
Several California cities, including San Francisco and Oakland, have implemented their own children’s savings account program, with one in Los Angeles in development. Expanding this idea statewide will ensure each child has fair access to economic mobility.
“The next generation of California children should be afforded fiscal flexibility,” stated Assemblymember Nazarian. “Creating automatic children savings accounts will build wealth and reduce debt.”
AB 15 has received support from State Treasurer Fiona Ma and numerous organizations committed to fighting wealth inequality. The next step for AB 15 is the California State Senate.
Adrin Nazarian represents the 46th Assembly District, serving the San Fernando Valley communities of Hollywood Hills, Lake Balboa, North Hills, North Hollywood, Panorama City, Sherman Oaks, Studio City, Toluca Lake, Valley Glen, Universal City, Van Nuys, and Valley Village.