-BILL 24-0236-

RACIAL EQUITY IMPACT ASSESSMENT

CHILD WEALTH BUILDING ACT OF 2021

TO: The Honorable Phil Mendelson, Chairman, Council of the District of Columbia
FROM: Brian McClure, Director, Council Office of Racial Equity
DATE: July 12, 2021

COMMITTEE
Committee on Business and Economic Development

BILL SUMMARY
Bill 24-0236 would provide a trust fund to babies born to parents who earn at or below 300 percent
of the federal poverty guidelines and receive DC Medicaid. Children enrolled in the trust fund will
be able to withdraw the funds when they turn eighteen.

CONCLUSION
Bill 24-0236 has the potential to advance racial equity by improving economic outcomes for
enrolled residents who: 1) remain eligible and 2) choose to use their funds for specific wealth-
building activities. These activities include starting a business, investing in a business, investing in
retirement, stocks, or bonds, and paying for certain academic or job-related pursuits.
However, the program’s structure limits the bill’s potential. The Council Office of Racial Equity
anticipates that strict eligibility requirements may limit the number of residents who remain eligible
for all eighteen years. These requirements may also reduce the final trust fund amount, reducing the
degree to which enrolled residents can participate in wealth building activities.

BACKGROUND
 The racial wealth gap is the difference in wealth between white families and families of
color. 1 Wealth is the difference between a family’s assets (their property and
resources) and debts (what they owe to others).
 DC has one of the largest racial wealth gaps in the nation. In DC, the median wealth of
white families ($284,000) is eighty one times higher than the median wealth of Black
families ($3,500).
 Bill 24-0236 would establish the Child Trust Fund program to provide eligible children
with annual deposits into a trust fund. When the child reaches eighteen years old, the
funds from these deposits could be used to start a business, pay for education,
purchase a home, or invest in property, among other eligible uses.

1
Brookings, A Conversation about the Racial Wealth Gap - and how to address it.
1
Bill 24-0236, the Child Wealth Building Act of 2021, aims to reduce the racial wealth gap in the District of
Columbia. 2 The bill would provide a District Government-sponsored trust to children born in the District of
Columbia and enrolled in DC Medicaid. 3
Bill 24-0236 has three primary functions:
1) it establishes the Child Trust Fund program (CTF);
2) requires the Office of the Chief Financial Officer (OCFO) to administer the CTF program; and
3) sets requirements for the program including who may participate, requirements for continued
eligibility, and how trust fund dollars can be used.
If the bill is passed, eligible children would be automatically enrolled in the CTF program and receive an
initial deposit of $500. Then, each enrolled child would receive a deposit of up to $1,000 (depending on
household income) every year their family remains eligible, through their eighteenth birthday. Program
enrollment would begin within sixty days of the bill becoming law. 4
Eligibility Requirements, Administration, and Spending Restrictions
To be eligible for the program, children would need to meet the following requirements: 5
• Be born on or after October 1, 2021 and their birth must be covered under Medicaid;
• Remain a DC resident for at least sixteen years before turning eighteen and live in the District for the
twelve months immediately before turning eighteen years old;
• Have a valid, unique, social security number, or other form of identification; and
• Be part of a family household with a household income at or below 300 percent of the federal
poverty guidelines and enrolled in DC Medicaid. Three hundred percent of the federal poverty
guidelines in tax year 2021 is $79,500 for a household
of four. The Committee Print uses the phrase
“applicable family household” to describe a The Committee Print defines a family
household that meets those requirements and is household as “one or more persons,
made up of “one or more persons all of whom are, all of whom are related by marriage,
related by marriage, birth, or adoption.” 6 birth, or adoption.”
If a child meets the eligibility terms above, enrollment into
the program would be automatic. A child could become
ineligible for not maintaining the residency requirements, if their household’s (or account custodian’s)
income increases over 300 percent of the federal poverty guidelines, or if they fail to qualify or recertify for
Medicaid. 7
Every year, the District Government would automatically deposit funds into each enrolled child’s account.
The deposit size would vary based on household income, as shown in Figure 1 below. For example, a child in
a household of four with a household income under $26,500 would receive $1,000 in trust funds per year. A

2
B24-0236 – Child Wealth Building Act of 2021.
3
See section on racial equity impacts that discusses provisions around adoption in more detail.
4
B24-0236 – Child Wealth Building Act of 2021, page 7, line 147.
5
The dates in this list depend on if Bill 24-0236 becomes law and if so, the effective date.
6
Bill 24-0236, Committee Print, page 1.
7
The Committee Print to Bill 24-0236 defines a resident as “an eligible child that has been domiciled in the District for at least 16
years prior to the age of majority and who is continuously domiciled in the District for the 12 months immediately before reaching
the age of majority.” Also, Medicaid requires enrollees to recertify each year. See the Medicaid Renewal Fact Sheet, DHS.

RACIAL EQUITY IMPACT ASSESSMENT: BILL 24-0236 2

child in a household of four with a household income between $53,265 and $79,500 a year would receive
$600 in trust funds per year per child.
-FIGURE 1- The amount a child receives every year depends on 1) how many people are in their family
household, 2) their family household’s annual income, and 3) how their income compares to the
federal poverty guidelines. For example, a family with five people with an $80,000 annual income
would be earning between 201% and 300% of the federal poverty guidelines. Every year, children in
this family would each receive $600 in their trust fund, as highlighted in the teal box below. 8

INCOME AS A PERCENT OF THE FEDERAL POVERTY GUIDELINES

FAMILY SIZE
0 - 100% 101% - 200% 201% - 300%
1 $0 - $12,880 $13,009 - $25,760 $25,889 - $38,640
2 $0 - $17,420 $17,594 - $34,840 $35,014 - $52,260
3 $0 - $21,960 $22,180 - $43,920 $44,140 - $65,880
4 $0 - $26,500 $26,765 - $53,000 $53,265 - $79,500
5 $0 - $31,040 $31,350 - $62,080 $62,390 - $93,120
6 $0 - $35,580 $35,936 - $71,160 $71,516 - $106,740
7 $0 - $40,120 $40,521 - $80,240 $80,641 - $120,360
8 $0 - $44,660 $45,107 - $89,320 $89,767 - $133,980
ANNUAL DEPOSIT $1000 $800 $600
Note: This table only accounts for income requirements under the federal poverty guidelines. The table does not account for DC
Medicaid income requirements, which seem substantially more fluid.

The bill requires the CTF to be administered by the Office of the Chief Financial Officer (OCFO) or whomever
the OCFO choses to administer the CTF in their place. The OCFO currently administers various savings and
retirement programs for District residents, District Government employees, and District Government
retirees. 9 OCFO testified that its Office of Finance and Treasury (OFT) would manage the CTF program for
the District, similar to OFT’s administration of the District’s 529 College Savings Plan.
The final trust fund amount will depend on the number of years a family remains eligible, their income each
year, and if the annual deposit amounts are affected by changes in the Consumer Price Index.
At age eighteen, enrolled residents would be able to withdraw funds and use them towards specific
purposes such as education, business ownership, business investment, residential or commercial property
ownership, and certain types of growth investments (such as retirement investments, stocks, or bonds) 10

8
Readers may notice that incomes between 100% and 101% as well as between 200% and 201% of the federal poverty guidelines
are not accounted for in the table. For example, it is unclear if a family of three earning $22,000 would receive an annual deposit of
$1000 or $800. The Council Office of Racial Equity was unsure how to resolve the issue based on the Committee Print and therefore
left the table as seen here.
9
See testimony of Eugenia Collis, Associate Treasurer – Asset Management, Office of Finance and Treasury, Office of the Chief
Financial Officer Government of the District of Columbia, provided on May 25, 2021 before the Committee on Business and
Economic Development of the Council of the District of Columbia.
10
For an exhaustive list of eligible uses, see section seven of the Committee Print.

RACIAL EQUITY IMPACT ASSESSMENT: BILL 24-0236 3

CTF Program Eligibility and DC Medicaid Enrollment
As written, Bill 24-0236 determines eligibility for the CTF based on enrollment in DC Medicaid. In 2020, there
were approximately 248,500 District residents enrolled in Medicaid and roughly 3,320 babies born to a
parent receiving Medicaid benefits. 11 12
Medicaid is a federal and state government program that provides health insurance to low income and
disabled individuals, along with families that meet a variety of residential and financial eligibility
requirements. While the federal government determines broad requirements around coverage and income
eligibility, states can decide which additional benefits they will provide via their Medicaid programs. 13
DC refers to its Medicaid program as DC Medicaid. Eligible residents can apply for DC Medicaid through DC
Health Link, a program and online health insurance marketplace, which is governed by the DC Health
Benefit Exchange Executive Board. 14 Currently, the Department of Health Care Finance manages DC
Medicaid. However, Bill 24-0236 assigns the Department of Human Services and the Department of Health
Care Finance certain administrative responsibilities related to the CTF.
Currently, pregnant people, infants and children between the ages of zero and twenty, individuals of all
ages, individuals with certain disabilities, and children in foster care are eligible for DC Medicaid. 15 One
source noted that “Medicaid eligibility levels in DC are among the most generous in the nation, and about
one in three DC residents is covered by Medicaid.” Using recent Medicaid enrollment data and DC birth
estimates, OCFO estimates that 4,150 children would be eligible for initial deposits into a CTF and that
roughly 45,000 participants would be in the program in year eighteen. 16
The Baby Bonds Concept
From the first savings bond (called a “Series A” bond) issued by President Franklin D. Roosevelt (FDR) in
1935, to Senator Cory Booker’s introduction of the American Opportunity Accounts Act (AOAA) in 2018, the
concept of baby bond has existed in the United States for decades.
Roosevelt created one of the first types of baby bond programs through the Series A Bond and refined that
program until arriving at the Series E Bond (commonly known as War Bonds). The Series E Bond was
created to finance US involvement in World War II and to encourage Americans to accumulate wealth
through opening savings accounts. FDR sought to use the full power of government intervention to remedy
inequality (although it must be noted that he mostly failed at remedying racial inequity and in many regards
exacerbated racial inequity). 17

11
District of Columbia and ACA Medicaid expansion. Healthinsurance.org – Medicaid DC.
12
The financial requirements are based on income thresholds that fall under the federal poverty guidelines. According to the
Department of Health Care Finance, income thresholds range for different populations.
13
DC has the same flexibility as other states to determine their own eligibility requirements. See Federal Requirements and State
Options: How States Exercise Flexibility under a Medicaid State Plan: MACPAC. DC’s income limits for Medicaid eligibility are among
the highest in the nation. See Louise Norris, Health insurance & health reform authority, October 20, 2020.
14
About the DC Health Benefit Exchange Authority.
15
DC Department of Health Care Finance, “Who may be Eligible for Medicaid?”
16
See the Fiscal Impact Statement, Bill 24-0236, Committee Print provided to the Office of Revenue Analysis on July 7, 2021 and
issued on July 8, 2021.
17
Karen Ferguson, Black Politics in New Deal Atlanta. University of North Carolina Press, April 2003.

RACIAL EQUITY IMPACT ASSESSMENT: BILL 24-0236 4

Senator Booker’s baby bonds proposal would allow eligible children to receive $1,000 in a trust fund at
birth, followed by payments up to $2,000 a year until a child is eighteen years old. 18 Most recently, in June
2021, Connecticut became the first jurisdiction to sign a comprehensive Baby Bonds program into law. 19
Evidence on Baby Bonds and Related Programs
Because Connecticut is the first jurisdiction to sign a true baby bonds bill into law, there is minimal
measurable evidence that evaluates the actual impacts such an initiative would have on closing the racial
wealth gap. However, there is research, scientific simulation models, and pilot programs of similar types of
trust funds that begin to reveal the positive impacts such an initiative as the CTF program could have.
One simulation predicted that a baby bonds program would narrow wealth inequalities by over ninety
percent while improving the wealth of young adults between the ages of eighteen and twenty five. 20 The
simulation was conducted by Naomi Zewde. In her simulation, the initial bond amount ranged from $200 to
$50,000, with the highest amount for the families with the lowest net worth. 21 Zewde estimated that
although racial differences would still exist, the program would reduce the Black-white wealth disparity
from a factor of about sixteen down to a factor of about one and a half. 22 Nationally, one out of every four
young adult households do not own financial assets or are in debt. Zewde’s report found that baby bonds
would boost the median financial assets of young adults in the lowest quintile from zero dollars to nearly
$31,000. 23
The Pew Charitable Trusts (Pew) summarized research on child development accounts (CDA), a type of
savings account that an adult controls for a child. 24 One program referenced by Pew is Oklahoma’s Savings
for Education, Entrepreneurship, and Down payment of Oklahoma Kids (SEED OK). SEED OK was a pilot
program that automatically opened accounts for children and deposited $1,000.
To date, the findings from the SEED OK program are promising. 25 For example, it found that having a CDA
savings account generated positive effects on parental educational expectations and helped protect
children from material hardships (a household’s inability to afford basic needs). The program was also
found to reduce maternal depressive systems after three and a half years of participation, with the greatest
benefits for disadvantaged mothers. Evaluations of the SEED OK program also revealed that that children
who received CDAs through the SEED OK experiment ended up with wealth nearly six times greater than
children in the control group, who did not receive accounts. 26 Importantly, Pew also notes that the SEED OK
experiment revealed the effects on savings were greater for families with higher incomes than for families
with lower incomes, which may be attributable to low income families having less or no discretionary
income available for saving.

18
Cory Booker’s American Opportunity Accounts Act, introduced December 18, 2018; also see Katherine Landergan, “Booker
reintroduces ‘baby bonds’ bill to give all newborns a $1k savings account”. Politico, February 4, 2021.
19
Russell Blair, “Connecticut ‘Baby Bonds’ would provide $3,200 at birth to children of low-income mothers.” Hartford Courant,
June 9, 2021; also see the Oklahoma College Savings Plan account (SEED OK account) under the Oklahoma State Treasurer. This
program was a pilot.
20
Naomi Zwede, “Universal Baby Bonds Reduce Black-White Wealth Inequality, Progressively Raise Net Worth of All Young Adults”
Review of Black Political Economy 47, no. 1 (2019): 3–19.
21
Ibid.
22
Douglas Blackmon, Slavery by Another Name: The Re-enslavement of Black Americans from the Civil War to World War Two, 2012.
23
M.M. Clancy et al., “Testing Universal Child Development Accounts: Financial Effects in a Large Social Experiment,” Social Service
Review 90, no. 4(2016): 683-708.
24
The Pew Charitable Trusts Health Impact Project, Health Note: Child Wealth Building Act of 2021.
25
CORE encourages readers to independently review this research as well, to understand how the structure of the SEED OK program
compares to the Child Trust Fund program.
26
Ibid.

RACIAL EQUITY IMPACT ASSESSMENT: BILL 24-0236 5

As noted by Pew, there are some important distinctions between what is being proposed for the CTF fund
by B24-0236 and CDAs in other jurisdictions. The CTF program is different from a traditional CDA in the
following ways:
1) the CTF program automatically enrolls eligible children in the District;
2) the CTF program prioritizes wealth-building in a more expansive sense—it does not only fund
education;
3) the CTF program does not emphasize personal saving, in fact the bill does not allow custodians
(parents or legal guardians) to deposit funds into the CTF accounts; and
4) for children born into low-wealth families, the aim is for the endowment to be large enough to
cover the down payment on a home, pay for a college education, or help get a business off the
ground. 27
While there are important distinctions, the CTF program proposed by Bill 24-0236 would most closely
resemble the District’s existing 529 Savings Plan. 28 The 529 College Savings Program Trust is a trust backed
by the DC Government and allows participants to save for certain higher education expenses. As of
September 2019, the program had 28,504 participants with a net asset value (total funds and investments)
of almost $700 million. 29 In 2019, contributions to new and current participants totaled $89.1 million.
Although public information on 529 Savings Program participants is unavailable, the 2019 Annual Report
did note that Wards 7 and 8 have the lowest per capita income in the District and that those wards have the
fewest DC College Savings Plan participants. 30 Wards 7 and 8 also have populations that are 90% Black. It is
likely that the CTF program would likely capture more Black residents as well as residents that live in Wards
7 or 8 than the 529 College Savings Program currently does.
The Importance of Wealth
According to Professor Darrick Hamilton, Henry Cohen Professor of Economics and Urban Policy at The New
School, the true essence of wealth is functional—its “what it [wealth] can do for you.” 31 There are tangible
privileges that come with having wealth. “Wealth is as much the beginning as it is the end of an
economically secure life,” he concluded. 32
Additional research supports this claim and suggests that wealthier families are better positioned to afford
post-secondary education, have funds to start a business, live in higher amenity neighborhoods, have
political influence; afford better legal representation, leave a bequest, and withstand financial hardships. 33
Equally, there are disadvantages for those that do not have wealth. Not having wealth directly correlates to
worse outcomes in business ownership, educational attainment, homeownership, savings, mental health,
socio-health determinants, mobility, and overall social and economic well-being. 34

27
Statement of Steven Brown, Senior Research Associate and Associate Director of the Racial Equity Analytics Lab, Urban Institute,
and Signe-Mary McKernan, Vice President, Center on Labor, Human Services and Population, Urban Institute, provided on May 25,
2021 before the Committee on Business and Economic Development.
28
See DC College Savings Plan.
29
2019 DC 529 Plan Financial Statements.
30
Ibid.
31
Testimony of Darrick Hamilton, May 25, 2021 provided to the Committee on Business and Economic Development.
32
“A Birthright to Capital: Equitably Designing Baby Bonds to Promote Economic and Racial Justice.” February 2020.
33
Ibid., Hamilton testimony page 2.
34
Council Office of Racial Equity and DC Policy Center, “DC Racial Equity Profile for Economic Outcomes.” January 2021; also see DC
Health, Health Equity Report for the District of Columbia, 2018.

RACIAL EQUITY IMPACT ASSESSMENT: BILL 24-0236 6

Other research has shown that wealth is “insurance against tough times, tuition to get better education and
a job, capital to build a small business or buy a home, savings to retire on, and a springboard into the
middle class.” 35
The Racial Wealth Gap
The racial wealth gap is the inequity in median wealth between races and ethnicities. 36 For example, the
racial wealth gap is the difference between the median white family’s wealth and the median Black family’s
wealth.
To find the median wealth for a race or ethnicity, you would need to find out the wealth amounts of all
families of a particular race or ethnicity—let’s say Black families in this example. Once you had the wealth
amounts for all Black families, 37 you would order them from smallest to largest. Finally, to find the median
wealth for Black families, you would choose the number right in the middle of all the ordered wealth
amounts. As a reminder, wealth is the difference between a family’s property and resources (their assets)
and what they owe to others (their debts).
The racial wealth gap persists both nationwide and in the District. Nationally, the median white household
has wealth holdings of $111,146—compared to $7,113 for the median Black household and $8,348 for the
median Latino household. In DC, a white family’s median wealth ($284,000) is eighty one times higher than
the median wealth of a Black family ($3,500). 38
Contributing Factors to the Racial Wealth Gap
There are several forces that led to the creation of and sustain the existence of the racial wealth gap. White
supremacy ideology and state sanctioned violence against Black and Indigenous Americans are the root
causes of the racial wealth gap. The racial wealth gap is upheld through exploitation, 39 racist government
practices, 40 theft, 41 and other acts of racialized violence. 42 These acts occurred right here in DC—like the
Snow Race Riot where white residents deliberately sought out, stole from, and destroyed Black owned
establishments such as Beverly Snow’s Epicurean Eating House and even Arthur Bowen Elementary
School. 43
These systems have resulted in deep and pervasive racial inequities—including but not limited to inequality
in incomes, homeownership, education, employment, and business outcomes. Each of these systems
contribute to the racial wealth gap. 44 Other factors such as community resources and debt management
also play a role in creating and sustaining the racial wealth gap. One recent report noted that “the best life
outcomes are found in highly segregated white neighborhoods” and is “consistent with a theory of

35
Urban Institute, May 25, 2021 Testimony.
36
Amy Traub, Catherine Ruetschlin, Laura Sullivan, Tatjana Meschede, Lars Dietrich, Thomas Shapiro, Demos, “The Racial Wealth
Gap: Why Policy Matters,” 2016; also see Kimberly Amadeo, “Racial Wealth Gap in the United States,” the balance, November 2020.
37
It’s nearly impossible to get all the wealth amounts for all District families, so it is likely that the median was calculated using the
wealth amounts of some District families. The researchers would have made sure that the “sample” of District families they were
analyzing did a good job of representing all families in the District.
38
Kilolo Kijakazi, Rachel Marie Brooks Atkins, Mark Paul, Anne Price, Darrick Hamilton, and William A. Darity, Jr., “The Color of
Wealth in the Nation’s Capital,” Urban Institute. November 1, 2016.
39
Eric Williams, Capitalism & Slavery, 1944.
40
Nick Sibila, “After Cops Seized and Kept Cash, Washington, D.C. Settles Almost Million Dollar Forfeiture Class Action,” Institute for
Justice, 2014.
41
Ibid.
42
Gillian Brockell, “The deadly race riot ‘aided and abetted’ by The Washington Post a century ago,” The Washington Post. July 15,
2019.
43
Jae Jones, “The Snow Riot: Riot and Lynch Mob Attack on Free Blacks in Washington DC,” April 27, 2021.
44
Demos, How Homeownership Contributes to the Racial Wealth Gap.

RACIAL EQUITY IMPACT ASSESSMENT: BILL 24-0236 7

opportunity hoarding that predominately white cities and communities have greater resources and often
have the fewest people of color living in them.” 45
The impact of racial inequities pertaining to the racial wealth gap are felt at the individual, community, city,
and regional level. For the individual or family, wealth enables positive life outcomes, such as longer,
healthier lives and economic mobility. At the community level, wealth provides resources that allows
communities to be resilient and to grow.
The Color of Wealth in Washington, DC
The persistent racial wealth gap and its outcomes illustrate the District’s historically racist past. The racial
wealth gap and its outcomes are “rooted in history in which [w]hite Americans have been privileged by
government and political and economic interventions that have afforded them access to resources and
iterative and intergenerational accumulation,” as one scholar noted. 46
The long history of racist policies and white racial violence against Black and Indigenous communities in the
District has been well documented. 47 Examples of how systemic and institutional racism created barriers
and led to racial inequities are outlined in detail in the Color of Wealth Report 48 and are summarized below
for emphasis:

45
Stephen Menendian, Arthur Gailes, and Samir Gambhir, The Roots of Structural Racism: Twenty-First Century Racial Residential
Segregation in the United States. Othering & Belonging Institute. June 21, 2021.
46
See Hamilton Testimony, page 2.
47
See Jefferson Morley, “The Snow Riot,” The Washington Post. February 6, 2005; 1853, March 3-10 Stat. 244, Act to Extend
Preemption Rights to Public Land.
48
“The Color of Wealth in the Nation’s Capital,” Urban Institute.

RACIAL EQUITY IMPACT ASSESSMENT: BILL 24-0236 8

 YEAR EVENT
Black Codes was passed into law. The codes enforced strict curfews, imprisoned freed Black Americans
unable to present documents verifying “good character” and proof of freed status, barred them from jobs in
well-paid sectors, and denied them ownership of restaurants. It governed all aspects of life and behavior for
1808 Black Americans in the District of Columbia and lasted for over 50 years.
If Black Americans followed the law, they were denied of wealth and asset building opportunities. If Black
Americans did not, they were given fines or jail time.
The Compensated Emancipation Act provided slaveholders up to $300 per freed slave, in exchange for their
1860s “losses.” People who were newly freed were only given up to $100—if they chose to leave the United States.
Otherwise, formerly enslaved Black people were not compensated at all.
Legislation set aside a portion of Black-paid taxes to Black schools. These funds were only a small fraction of
1862
what white schools received.
1901 Congress codified District laws, but without civil rights provisions. Segregation was made legal.
Redlining emerged; a practice that “graded” areas of cities based on several factors—including race. People
living in lower-graded areas were denied both bank mortgages and subsidized Federal Housing
1930s Administration insurance products. Racial covenants, which barred selling or renting a property to people
-40s who were not white, also segregated neighborhoods.
Black families and other families of color were effectively forced to remain renting substandard housing.
Black families continued to be excluded from most suburban developments, confining them to central cities
1950s while federal housing policy drew white families, and their tax dollars, out to the segregated suburbs. Racial
covenants continued to make it difficult for Black people to find suitable housing.
Urban renewal swept through DC. Largely Black SW neighborhoods were targeted by eminent domain. More
than 500 acres were bulldozed, along with 1,500 businesses—including many Black-owned businesses—and
6,000 homes. Approximately 23,000 residents, predominantly Black, were displaced with little
1960s compensation. The 5,800 new homes were to be for 13,000 middle- and upper-middle-class residents.
-70s
Zoning policy sustained and entrenched racial and economic segregation. Some areas of the city were zoned
exclusively for single-family units, unaffordable to the Black homeowner who has been excluded from high-
paying jobs through relentless education and employment discrimination.
1980s Local and national drug, policing, and sentencing policies disparately impacted Black residents.
Adapted from The Racial Wealth Gap in Washington, D.C. (MITRE, forthcoming), The Color of Wealth in the Nation’s Capital (Urban
Institute), and Discriminatory Housing Practices in the District: A Brief History (DC Policy Center)

RACIAL EQUITY IMPACTS

The intent of Bill 24-0236 is to close the racial wealth gap. Closing the racial wealth gap requires well-
coordinated, targeted interventions to disrupt current system dynamics. Providing families, particularly
Black families and other families of color, with money towards wealth building activities is an important
start. However, Bill 24-0236 alone may not be enough sustained intervention to build wealth across
generations for residents with low and very low incomes, or to eliminate the racial wealth gap.
Further, while some of Bill 24-0236’s provisions have positive racial equity impacts (for those enrolled in the
program), some of the provisions may carry unintended consequences, diluting the program’s potential
impact. A snapshot of CORE’s analysis is immediately below, and an in-depth analysis follows.

RACIAL EQUITY IMPACT ASSESSMENT: BILL 24-0236 9

RACIALLY EQUITABLE ELEMENTS
Bill 24-0236 would likely improve health outcomes for Black residents and other residents of color, as they are most
likely to be impacted by the passage of the bill.
Bill 24-0236 would provide larger yearly trust fund deposits to children in families with lower incomes. In the District,
Black households are overrepresented in low income brackets, meaning they would likely receive more.
Automatically enrolling residents receiving Medicaid into the Child Trust Fund program will likely result in CTF program
participation by Black residents and other residents of color.
Children in foster care may be eligible for the Child Trust Fund program.
Funds deposited into the trusts are excluded from eligibility calculations for local and federal safety net programs.
The Print requires the OCFO to include the race or ethnicity of each eligible child in its yearly report.
Some research shows that even modest savings specifically dedicated towards paying for college increases the
likelihood of college enrollment.

RACIAL EQUITY CONCERNS

Using DC Medicaid to provide a new government benefit maintains the challenges and barriers created by DC Medicaid.
Basing eligibility for the CTF program on Medicaid enrollment would exclude many residents experiencing deep
racialized poverty.
Changes in DC Medicaid enrollment status could disrupt access to the CTF program.
The bill only allows funds to be distributed to a child whose family meets residency requirements.
The program’s income requirements mean that families would continue to endure the physical, mental, and
educational consequences of poverty to receive funds.
The final trust fund’s purchasing power may not be in proportion to the actual cost of education, business ownership,
and property ownership.
Fund restrictions do not allow for the same self-determination middle- and upper-class white families have been
afforded for centuries.

Positively, Bill 24-0236 would likely improve health outcomes for Black residents and other residents
of color, as they are most likely to be impacted by the passage of the bill. During the hearing for Bill 24-
0236, Pew Charitable Trusts (Pew) testified about promising research—automatic savings accounts are
likely to benefit child development, parental health, children’s educational outcomes, and offer other
health benefits over the course of enrollees’ lives. 49
Positively, Bill 24-0236 would provide larger yearly trust fund deposits to children in families with
lower incomes. In the District, Black households are overrepresented in low income brackets,
meaning they would likely receive more. In fact, Black households make up over fifty percent of
households with earnings below $60,000 dollars per year and seventy five percent of households making
less than $10,000 dollars per year. 50 White households in the District are overrepresented in higher income
brackets, with eighty percent of white households making over $75,000 a year. 51

49
Pew testimony, page 8.
50
Council Office of Racial Equity and DC Policy Center, “DC Racial Equity Profile for Economic Outcomes.” January 2021.
51
Ibid.

RACIAL EQUITY IMPACT ASSESSMENT: BILL 24-0236 10

The Child Trust Fund -FIGURE 2- Family income affects how much a child would receive every
program provides higher year. The chart below assumes each family is made up of three
amounts of funds to individuals and earns the median income of all families of their race.
residents living further Source: DC Health Matters
below the federal poverty
line. Although Bill 24-0236 FAMILY RACE AND AMOUNT RECEIVED BY
MEDIAN INCOME
is race neutral, given the ETHNICITY CHILD IN FAMILY OF 3
District’s racial income AMERICAN INDIAN/
$35,563 $800
inequality, the bill would ALASKAN NATIVE
overwhelmingly benefit BLACK/
$46,201 $600
persons of color in the AFRICAN AMERICAN
District, specifically SOME OTHER RACE $61,410 $600
Indigenous and Black
residents. For example, HISPANIC/LATINO $83,170 $0
imagine an Indigenous NON-HISPANIC/
$92,445 $0
family of three and a white LATINO
family of three in the 2+ RACES $97,732 $0
District and each
household’s income ASIAN $110,365 $0
matches the median NATIVE HAWAIIAN/
$113,158 $0
income for their race. In PACIFIC ISLANDER
this scenario, each child in WHITE $143,150 $0
an Indigenous family
Note: For illustrative purposes, this chart assumes that families receiving trust fund
would receive $800 per
deposits are enrolled in DC Medicaid.
year (as long as they were
enrolled in DC Medicaid), and a child in a white median income family would receive no funds (Figure 2).
Concerningly, when a family’s income goes up, their trust fund deposit goes down. If family’s income
increases “too much,” they would become ineligible to receive contributions. For example, consider a Black
household of four earning $79,400 annually and enrolled in Medicaid. If their income increased by $200,
their new annual income would be $79,600. Based on the CTF program rules, the family would no longer be
eligible to participate and the enrolled child(ren) would lose their yearly $600 trust fund deposit. 52 They
would however, be able to keep any amount that has accrued up until that time.
The complex relationship between family size, income, and deposit amount is further illustrated in Figure 3.

52
For context, a recent analysis by Smart Asset showed that a household needs to earn around $132,600 before taxes to afford rent
for the average two-bedroom apartment in DC, which is about $3,100/month.

RACIAL EQUITY IMPACT ASSESSMENT: BILL 24-0236 11

-FIGURE 3- Family size, income, and Medicaid enrollment affect deposit amounts. Children would no longer
receive deposits if their family’s income is more than 3 times (or 300%) of the federal poverty guidelines.
Source: DC Health Matters

FAMILY OF 2 FAMILY OF 3 FAMILY OF 4 FAMILY OF 5

They make $30,000. They make $100,000. They make $60,000. They make $160,000.
This is between 101% This is between 401% This is between 201% This is over 500%
and 200% of the FPL. and 500% of the FPL. and 300% of the FPL. of the FPL.
Each child receives Each child receives Each child receives Each child receives
$800 every year. $0 every year. $600 every year. $0 every year.
This contribution structure creates tension between family income and the size of the child’s trust fund.
When family income goes up, the trust fund deposit goes down. A salary bump due to a promotion, more
stable role, or additional education would result in a smaller trust fund contribution—meaning less money
for the future.
However, for a higher income family (not enrolled in the Child Trust Fund), a raise might result in more
money for the future. A raise could allow that family to save more, invest more, or earn more in interest. This
tension—an increase in income resulting in a decrease in benefits—is built into many public programs.
In addition, this contribution structure creates a tension within the Child Trust Fund Program itself. To
receive deposits and withdraw the funds at eighteen, the enrolled child’s family must stay in DC for sixteen
years while earning below the income eligibility guidelines. Living in DC at 300% of the federal poverty
guidelines is very difficult.
A living wage calculation by MIT estimates that a family of four would need about $109,700 to support their
family in DC. 53 This amount is more than 400% of the federal poverty guidelines, meaning that this family
would be ineligible for the CTF. But the creators of this living wage calculation acknowledge that this “living
wage is perhaps better defined as a minimum subsistence wage for persons living in the United States.” The
$109,700 figure “does not…cover what many may consider as necessities enjoyed by many Americans,”
including pre-prepared meals, restaurant outings, entertainment, unpaid vacations, or holidays. 54 In
addition, “the calculated living wage does not provide a financial means to enable savings and investment
or for the purchase of capital assets (e.g., provisions for retirement or home purchases).”
While a family’s income is usually bolstered by government assistance programs to help cover expenses, the
CTF program’s structure would likely make it difficult for a child to remain eligible to receive funds.

53
Living Wage Calculation for District of Columbia, Dr. Amy K. Glasmeier and the Massachusetts Institute of Technology.
54
About the Living Wage Calculator, Dr. Amy K. Glasmeier.

RACIAL EQUITY IMPACT ASSESSMENT: BILL 24-0236 12

Positively, automatically enrolling residents receiving Medicaid into the Child Trust Fund program
will likely result in CTF program participation by Black residents and other residents of color. OCFO
would determine CTF program eligibility by using DC Medicaid participant information. Using DC Medicaid
as an eligibility requirement means families do not have to bear the administrative burden of applying for
another program.
This would particularly benefit Black families. As of 2019, eighty percent of nonelderly Medicaid recipients in
DC were Black, twelve percent were Hispanic, and two percent were multiple races. 55
Concerningly, using DC Medicaid to provide a new government benefit maintains the challenges and
barriers created by DC Medicaid. To be eligible for the CTF program, residents need to first apply and be
approved for DC Medicaid. Enrollment in DC Medicaid is high, 56 suggesting that most eligible residents apply
for the program and are approved. However, the process can be complex and difficult to navigate for
residents. Issues have historically persisted around the renewal process, long wait and processing times at
service centers, IT issues, and lost documentation. 57
Concerningly, basing eligibility for the CTF program on Medicaid enrollment would exclude many
residents experiencing deep racialized poverty. To be eligible to receive DC Medicaid, an individual must
be a US citizen or have eligible immigration status. Programs such as the Immigrant Children Program (ICP)
were designed to cover individuals under the age of twenty-one who are ineligible for Medicaid due to their
immigration status. However, individuals covered by ICP are not included based on the Committee Print
(almost 4,000 children as of December 2020 58).
Notably, the bill also excludes some Black families and families of color experiencing wide inequities in
wealth attainment. This includes families between 301 percent and 500 percent of the federal poverty
guidelines and families with higher incomes but without wealth (due to factors such as student loan debt). 59
Concerningly, changes in DC Medicaid enrollment status could disrupt access to the CTF program. DC
Medicaid enrollment status may change for any number of reasons—from an individual not renewing on
time to a possible repeal of the Affordable Care Act. A repeal “could leave tens of thousands of District
residents without insurance unless the District stepped in to fill the gap,” noted the Office of the DC
Auditor. 60 DC Medicaid beneficiaries are required to renew their eligibility every twelve months and risks
losing their eligibility if they do not. An untimely renewal may disqualify that individual from the CTF
program.
Positively, children in foster care may be eligible for the Child Trust Fund program. In the District, there
are deep racial inequities in foster care. Most of the children that enter foster care are Black and Hispanic. 61
In Fiscal Year 2021, the District reported that roughly eighty percent (515) of children in foster care were
Black and sixteen percent (102) were Hispanic. And while the aim of foster care is to reunite the child with
their family, adoption is the second most likely reason children in the District exited foster care (in Fiscal

55
Distribution of the Nonelderly with Medicaid by Race/Ethnicity, KFF, 2019. Numbers for Asian/Native Hawaiian and Pacific Islander
and American Indian/Alaska Native residents were unavailable. 2.8% of nonelderly Medicaid recipients in DC are white.
56
98% of all eligible children in DC are enrolled in Medicaid according to the Department of Health Care Finance.
57
Wes Rivers, “DC Medicaid IT Problems Threaten to Leave Thousands of Residents without Coverage, Unless Addressed Soon,”
DCFPI, December 2015.
58
District of Columbia Department of Health Care Finance: Monthly Enrollment Report, January 2021.
59
Kery Murakami, “Would Canceling Student Debt Promote Racial Equity?” Inside Higher Ed, February 23, 2021.
60
Office of the District of Columbia Auditor, Changes Proposed to the Affordable Care Act and Medicaid Could Cost the District $1
Billion or More Each Year, January 25, 2017.
61
Foster Care Demographics, Child and Family Services Agency.

RACIAL EQUITY IMPACT ASSESSMENT: BILL 24-0236 13

Year 2020). 62 Therefore, extending eligibility to children that are adopted has the potential to improve future
outcomes especially for residents that are disproportionately represented in the District’s foster care
services.
Although the bill allows children that are adopted to be included in the CTF program, the bill does not
provide clear guidance on what constitutes eligibility for a child who is adopted, but not at birth.
Notably, the bill only allows funds to be distributed to a child whose family meets residency
requirements. Unfortunately, many enrolled Black residents may not be in the District eighteen years from
now and may not benefit from the bill’s full impact. As drafted, the bill only allows an enrolled child to
withdraw funds 1) when they turn eighteen 2) if they’ve been a DC resident for at least sixteen years before
turning eighteen and 3) if they have been a District resident for at least twelve months immediately before
turning eighteen. The Print provides a grace period for families who leave the District for up to two years,
however the Print is not explicit on how that process would work.
Between 2010 and 2013, at least 20,000 Black residents were forcibly pushed out of the District due to
gentrification. 63 Given that Black residents are still being pushed out of the District, it is likely that many
residents who may enroll at birth may be pushed out prior to turning eighteen. In addition, some residents
(such as military families or foster children placed out of the District) may leave for other reasons prior to
being able to draw down from the account.
Concerningly, the program’s income requirements mean that families would continue to endure the
physical, mental, and educational consequences of poverty to receive funds. To be clear, the Council
Office of Racial Equity (CORE) is not saying that poverty is a choice and that residents could choose to
remain below the income requirements to remain eligible. Rather, CORE is highlighting that the program’s
structure means that trust fund receipt comes at a cost to residents’ well-being.
“[Child] poverty is linked with negative conditions such as substandard housing, homelessness, inadequate
nutrition and food insecurity, inadequate child care, lack of access to health care, unsafe neighborhoods,
and under resourced schools,” notes the American Psychological Association. 64 Consequences also affect
education—“poorer children and teens are also at greater risk for several negative outcomes such as poor
academic achievement, school dropout, abuse and neglect, behavioral and socioemotional problems,
physical health problems, and developmental delays.” 65
Physical health is also impacted—“children and teens living in poorer communities are at increased risk
[of]…low birth weight, poor nutrition, chronic conditions such as asthma, anemia, and pneumonia, risky
behaviors such as smoking and engaging in early sexual activity, exposure to environmental contaminants,
and exposure to violence in their communities which can lead to trauma, injury, disability, and mortality.” 66
Adults in poverty also experience a range of serious effects to their physical and mental health.
Positively, funds deposited into the trusts are excluded from eligibility calculations for local and federal
safety net programs. Bill 24-0236 prevents funds designated for an enrolled child to be considered gross
income of the eligible child or parent. It also prevents funds in the CTF account to be counted when
determining eligibility of the child or parent for local or federal financial aid, including Temporary Assistance

62
Exits by Reason, Child and Family Services Agency.
63
National Community Reinvestment Coalition, “Shifting Neighborhoods: Gentrification and cultural displacement in American
cities,” March 2019.
64
Effects of Poverty, Hunger, and Homelessness on Youth, American Psychological Association.
65
Ibid.
66
Ibid.

RACIAL EQUITY IMPACT ASSESSMENT: BILL 24-0236 14

for Needy Families, the federal Low Income Home Energy Assistance Program, educational aid or grants, or
any other need-based aid or grant. 67
If this provision was left out, it is likely that Black residents and other residents of color would be negatively
affected. For example, eighty one percent of households eligible for the federal energy assistance program
based on income are led by a non-Hispanic Black or Hispanic head of household. 68 The CTF may have
prevented these households from receiving assistance with their utility bills without this provision.
Positively, the Print requires the OCFO to include the race or ethnicity of each eligible child in its
yearly report. Disaggregating data by race is a best practice in writing racially equitable policy.
Concerningly, the final trust fund’s purchasing power may not be in proportion to the actual cost of
education, business ownership, and property ownership. CORE is unable to definitively calculate how
much could be saved through the Child Trust Fund program, but we can estimate a range. If enrolled
children remain eligible every year until they turn eighteen, final trust fund amounts at age eighteen would
be roughly between $7,700 and $18,500 (not factoring in compounded interest). 69
In his testimony, Professor Hamilton noted that accounts must be large enough to ensure entry into wealth-
building assets (homeownership, business ownership, or access to higher education). While we may be able
to assess purchasing power against current costs, it is difficult to definitively conclude how far trust funds
will be able to go in the future. Therefore, it is difficult to definitively assess how an enrollee may sustain
long term wealth accumulation across generations. 70
Let’s look at the example of using the funds to pay college tuition. Student loan debt is a major barrier to
wealth, especially for Black families. Brookings reported that “Black households carry more student debt”
than white households and “four years after graduation, the average Black college graduate owes $52,726,
compared to $28,006 for the average white college graduate.” 71 Further, Black families are more likely to
borrow than students from other racial and ethnic groups pursuing similar types of degrees, and are also
more likely to borrow larger amounts than their white or Hispanic peers. 72 More debt equals less wealth.
Even with the additional funds provided by the CTF, it still may not be enough to pay for full tuition at a local
institution (note: to be clear, the bill does appear to allow funds spent on educational purposes to be spent
both inside the District and out of state). The lone public university in the District is the University of the
District of Columbia (UDC). At UDC, the average cost of in-state tuition is $6,152. Comparatively, there are
over a dozen four-year, private institutions located in the District. The most expensive for in-state tuition is
George Washington University ($58,640) and the most inexpensive is Gallaudet University, where in-state
tuition is $17,038 a year. Assume an enrollee at 300% of the FPL uses all their trust fund on tuition

67
See page 4 of the Committee Print for Bill 24-0236.
68
District of Columbia LIHEAP Energy Burden Analysis, Applied Public Policy Research Institute for Study and Evaluation, September
2020.
69
These estimates do not account for inflation or interest. The Committee Print does note that if funds are available, yearly deposits
will increase in proportion with the Consumer Price Index (which measures inflation). However, the Committee Print does not
promise that accounts will accrue interest.
70
Urban Institute, “Meeting the Washington Region’s Future Housing Needs: A Framework for Regional Deliberations,” September 4,
2019; and Andrew Giambrone, “D.C. region needs 374k new homes by 2030 to accommodate expected growth, report finds,” Curbed
Washington DC, September 5, 2019.
71
“Student loans, the racial wealth divide, and why we need full student debt cancellation,” Brookings. June 23, 2021.
72
Sandy Baum, “Student Debt: The Unique Circumstances of African American Students,” American Council on Education and the
Andrew Mellon Foundation.”

RACIAL EQUITY IMPACT ASSESSMENT: BILL 24-0236 15

assistance. Over eighteen years, they would have received $7,700. That student would not have enough to
pay for one year of tuition at Gallaudet and would likely only be able to fully cover one years of costs at UDC.
In terms of other wealth-building investments, the fund may be enough to make a down payment (if
supplemented by programs such as the District’s Home Purchase Assistance Program) but it may not be
enough to pay the subsequent mortgage. Positively, the Minority Business Development Agency and the
Ewing Marion Kauffman Foundation estimated that many small businesses, particularly freelance, online,
and home owned businesses, often need “only a few thousand to get started.” 73
Positively, some research shows that even modest savings specifically dedicated towards paying for
college increases the likelihood of college enrollment. Low or moderate income families that have saved
between $100 to $500 towards paying for college are three times more likely to enroll in college and four
times more likely to graduate from college than children who have no savings specifically dedicated for
school. 74 However, it is worth considering what other factors contribute to the ability to have a separate
savings account for college and the possibility that these modest savings alone propel students to graduate
years after enrollment.
Concerningly, fund restrictions do not allow for the same self-determination middle- and upper-class
white families have been afforded for centuries. Currently, the bill restricts what the funds can be spent
on, requires proof of an approved use to access the funds, and limits many of the allowed spending uses to
within the District.
As Professor Hamilton testified, “wealthier families are better positioned to finance elite educations, access
capital to start a business, reside in higher amenity neighborhoods, exert political influence; purchase
better counsel if confronted with an expensive legal system, leave a bequest, and withstand financial
hardship resulting from any number of emergencies.” 75 However, many of these uses are impossibilities
under the bill’s restrictions.
It is understandable that the bill limits the uses of funds to “wealth appreciating opportunities” given its
intent to close the racial wealth gap. However, this may accidentally preserve “the framing of the racial
wealth gap…[as] the poor financial choices and decision-making on the part of largely, [B]lack, Latinx, and
poor borrowers” 76 and reinforce the paternalism of many other government programs.

FURTHER CONSIDERATIONS
The bill does not track patterns in eligibility, nor does it disaggregate and track the effect of the
program on the racial wealth gap. Although the bill requires OCFO to submit a report to Council with
certain data points, it does not require OCFO to track and assess how families’ eligibility may change over
time. For example, it would be helpful to understand how many enrollees are phased out of the program
due to income changes or because they move out of the District. Tracking such data could help the program
iterate over time. 77
In addition, a key step in achieving racial equity is monitoring disparate impacts or other unintended
consequences along racial lines. The CTF program will be a new policy tool to the District and to the nation.

73
MBDA, How to Estimate the Cost of Starting a Business.
74
W. Elliott and S. Beverly, H.a.Song, and I. Nam, “Small-Dollar Children’s Savings Accounts and Children’s College Outcomes,”
Children and Youth Services Review 3, no.7 (2011): 1101-11; Also see Pew Testimony.
75
Testimony of Darrick Hamilton, May 25, 2021 provided to the Committee on Business and Economic Development.
76
Ibid.
77
See section eight of the Committee Print for Bill 24-0236, Reporting Requirements.

RACIAL EQUITY IMPACT ASSESSMENT: BILL 24-0236 16

It is critically important that OCFO (or another executive agency) monitor the short-term indicators and
longer-term outcomes associated with the bill. This may help the District assess how effective policy
interventions are in driving change in the racial wealth gap or recreating disparate outcomes.
The bill bases eligibility on income rather than wealth. The Urban Institute testified that “the racial
wealth gap is three times larger than the racial income gap.” However, the bill bases the amount of a
family’s annual contribution largely on household income (the amount a family earns in a year) as opposed
to household wealth. 78 Given that the racial wealth gap in the District exceeds disparities in income based
on race, using wealth as opposed to income as the criterion for eligibility “might benefit even more families”
based on race, as noted by Pew. 79 They also noted that researchers pointed to two alternative approaches:
1) provide bonds for all children whose family falls below the national median wealth; or
2) universal, progressive baby bonds, where all babies born in the US would receive accounts with
initial deposits and contribution amounts determined by household wealth. 80 81

ASSESSMENT LIMITATIONS
Alongside the analysis provided above, the Council Office of Racial Equity encourages readers to keep the
following limitations in mind:
Assessing legislation’s potential racial equity impacts is a rigorous, analytical, and uncertain
undertaking. Assessing policy for racial equity is a rigorous and organized exercise but also one with
constraints. It is impossible for anyone to predict the future, implementation does not always match the
intent of the law, critical data may be unavailable, and today’s circumstances may change tomorrow. Our
assessment is our most educated and critical hypothesis of the bill’s racial equity impacts.
This assessment intends to inform the public, Councilmembers, and Council staff about the legislation
through a racial equity lens. As a reminder, a REIA is not binding. Regardless of the Council Office of Racial
Equity’s final assessment, the legislation can still pass.
This assessment aims to be accurate and useful, but omissions may exist. Given the density of racial
equity issues, it is unlikely that we will raise all relevant racial equity issues present in a bill. In addition, an
omission from our assessment should not: 1) be interpreted as a provision having no racial equity impact or
2) invalidate another party’s racial equity concern.

78
Pew Research Center, Juliana Menasce Horowitz, Ruth Igielnik, and Rakesh Kochhar, “Trends in income and wealth inequality.”
January 9, 2020. Also see Lines 114-121 of the Committee Print for B24-0236. It states that the OCFO “shall use the income of the
most recent taxable year for which information is available”.
79
Pew testimony, page 6.
80
Angela Hanks et. al., “Systematic Inequality: How America’s Structural Racism Helped Create the Black-White Wealth Gap,” Center
for American Progress. February 21, 2018; and Darrick Hamilton, William Darity, Jr., “Can Baby Bonds Eliminate the Racial Wealth
Gap in Putative post-Racial America?” The Review of Black Political Economy. January 1, 2010.
81
“A Birthright to Capital: Equitably Designing Baby Bonds to Promote Economic and Racial Justice.” February 2020.

RACIAL EQUITY IMPACT ASSESSMENT: BILL 24-0236 17