In addition to worrying about things such as bond ratings and debt refinancing, state Treasurer Mike Pellicciotti is aiming to help thousands of Washington residents.
“If you want to transform people’s lives,” he recently told The Columbian’s Editorial Board, “only with a long-term outlook can you pull this off.”
Pellicciotti was in Southwest Washington to meet with local leaders and civic groups. Along the way, he promoted the Washington Future Fund, a bold investment in the state’s future.
The idea is to set aside $3,200 for each baby born under the state’s Apple Health insurance, our version of Medicaid. This is no small task; some 47 percent of the state’s births in 2020 were covered by Apple Health, accounting for roughly 39,000 babies.
The money would be managed by the Washington State Investment Board and could be accessed by recipients between the ages of 18 and 31, provided they are living in Washington. It could be put toward one of three uses: education, including trade schools and apprenticeships; the purchase of a residence; or the start of a business.
Not only would the Future Fund be an investment in Washingtonians; it would be an investment in the state. The money would have to be spent in Washington.
Pellicciotti estimates that, depending on markets, the initial investment will grow to roughly $10,000 per recipient over the next 20 years. That is not going to purchase a college education or a home, but seed money can be transformative for low-income individuals.
The plan is innovative. Pellicciotti said only Connecticut has adopted a similar system, and that state borrowed money to implement it. Washington’s proposal would use revenue already in the budget.
Importantly, the legislation has support from members of both parties, including Reps. Monica Stonier, D-Vancouver, and Paul Harris, R-Vancouver. Ann Rivers, R-La Center, is a co-sponsor on the Senate side.
Lawmakers this year approved creation of a Washington Future Fund committee to examine the issue. At the time, Pellicciotti called it “an investment not only in our kids but also in those communities facing persistent poverty and a lack of access to capital.”
That is the impetus behind the proposal. In our state and elsewhere, a wealth gap has developed between rural areas and urban areas over the past four decades. In six Washington counties, all rural or coastal, at least 73 percent of births are to low-income families eligible for Apple Health. Along the Interstate 5 corridor, nearly every county — including Clark — has a rate below 50 percent.
That creates lingering issues: brain drain, in which the most talented young people leave depressed areas; a lack of capital young adults can invest back into their community, through creating businesses or purchasing a home; and a cycle of poverty that demands public investment down the road in people who have had few opportunities for success.
Several questions surround the proposed Future Fund. As Pellicciotti notes, there is a difference between wealth and income, which can influence who receives payments down the road. And there are concerns about a government program that will benefit some citizens and not others.
Those are legitimate concerns, and they warrant robust debate among lawmakers. But there also are striking benefits to the Washington Future Fund proposal and to investing in our state’s needy people and communities. Because of that, it deserves serious consideration from lawmakers.