The Paid Leave Podcast

Exploring Connecticut's Family-Friendly Policies with State Treasurer Erick Russell

• The Connecticut Paid Leave Authority • Season 3 • Episode 23

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In the United States, the month with the largest number of births is typically August, with July a close second. In this episode of The Paid Leave Podcast, we talk to the State Treasurer Erick Russell about the Baby Bonds program. Treasurer Russell talks about the fact that Connecticut is the first state in the nation to have the Baby Bond program aimed at curbing racial and generational poverty. He talks about the program, and he highlights the potential to engage families and build long-term economic opportunities for their children. Treasurer Russell talks about his background and emphasizes the importance of teaching financial literacy to children in middle school, and the importance of teaching them about credit history and long-term investments, like a 401k retirement plan. He also touches on Connecticut's progress in stabilizing finances, and the importance of family-friendly policies in the state like the Baby Bonds program, CHET and CT Paid Leave. Treasurer Russell was sworn in as Connecticut’s 84th State Treasurer in January of 2023. 

For more information about the Baby Bond program please go to: CT Baby Bonds

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Nancy Barrow:

Nancy, hello Connecticut, and welcome to The Paid Leave Podcast. The title basically says it all. I'm Nancy Barrow, and I will be delving into this new state program and how it can help you and your family. This podcast will give you information you should know about Connecticut Paid Leave and maybe just a little bit more Connecticut Paid Leave brings peace of mind to your home, family and workplace. Welcome to The Paid Leave Podcast. State Treasurer Erick Russell is my guest today. And a little history about Erick is that he was sworn in in Connecticut as the 84th state treasurer in January of 2023. He grew up in New Haven and adopted the work ethic and financial responsibility of his parents by working in the family's small convenience store. He was the first in his family to graduate from college and law school, becoming a very successful attorney and as treasurer, he is continuing the public finance and social equity work that defined his legal career. And in addition to sound and ethical pension fund management, he's prioritizing financial literacy and long term investments to promote economic opportunity. And Treasurer Russell is the first black, LGBTQ person to win an election for statewide office in American history. First, congratulations on that being the first anything is is like, amazing and wonderful, and you're really paving a path for other people to get in to office.

State Treasurer Erick Russell:

No it's really an honor. And I think you know, what it reminds me of is the fact that so many people before me really paved the way for me to be here. And I think that's what it's all about. It's reaching back and making sure you're bringing folks along with you as well.

Nancy Barrow:

Well thank you for coming on to The Paid Leave Podcast.

State Treasurer Erick Russell:

No happy to be here. Thanks for having me.

Nancy Barrow:

So let's go back to young Erick, working in the family's business. How young were you when you had to start working? And when did you learn about money?

State Treasurer Erick Russell:

So I was probably six years old. I grew up working in the store. It was a family business, so always saw my my parents there working, and we were really the hub in the community. In many ways, it's where I learned a lot about life generally, and things that were important to people and how to interact with folks, and really sparked my curiosity and just learning about people's backgrounds and what motivated people. But yeah, from the time I was about six, you could find me stocking shelves or sweeping the floor, standing on a milk crate, doing the cash register. You know, it was a great experience in so many ways. One, being able to spend that time with my family, yeah, sure. But also, really just to learn about life in so many ways as well. My parents always worked incredibly hard. It's really where I got my work ethic from. My dad worked around the clock in the business. My mother was worked in the business as well, but also, obviously taking care of myself and my siblings, and so it was something that I really just grew up around there. I can't say there was any one specific moment, but I think what I learned really early is that anything that you really wanted you had to work for. Whether it was something that was financial or, you know, watching my parents sacrifice for me to have opportunities like going to college or law school, my understanding was always that you had to put that time and dedication in in order to achieve those goals. The fact that my parents didn't have access to a 401K, didn't have the resources to really think about saving for college or thinking about saving for retirement. You know, those are all it's why it's so important to me now in this role to be out talking to students and young people and folks in the community about really investing in their future, because those are skill sets and tools that folks in my community growing up just didn't have inherently and I think until we talk about those things and get folks thinking about it earlier, it really sets people up for longer term success.

Nancy Barrow:

Yeah, it's interesting. So you go talk to kids as young as fifth grade, is that right?

State Treasurer Erick Russell:

Totally, yes.

Nancy Barrow:

And you think it's important to instill that kind of financial wellness in their brain, or at least being aware of it.

State Treasurer Erick Russell:

I think it's so many of the basics, because what financial literacy or financial education is all about is it's a lifelong learning process, some of the really basic things that I sure wish I knew when I was 18, for example, and I had to find out the hard way, right? If you're getting folks thinking about what a credit score is, or what different types of loans are, and what it means to take on credit, you know, those are all I think a really it's a foundation and it's a base, and we all are building on those really fundamental skills every day. I remember in middle school, so I had a teacher she had started in school as a kind of permanent substitute for another teacher that was out, and they essentially let her, kind of come up with her own curriculum for that class. And she was called it, I believe, business planning, but it was really all about the fundamentals of financial literacy, how to balance a checkbook, what a credit score was. Space, and I remember when I'm still in touch with her today, but I learned more in that class in terms of skills that I was able to apply and use on a daily basis throughout my life than I had in any other course. The great thing in Connecticut now is we've really prioritized financial literacy, one through many offices, the Comptroller and I have gone around the state to schools talking about the importance of financial literacy, talking to high school students, but we also recently passed legislation here in Connecticut that actually makes a financial literacy course a requirement for high school graduation, and so all of the freshmen that entered school last year, starting in October of last year, will actually be required to complete that course prior to graduation. That's so fantastic. I mean, just this year going into schools and going into high schools, so impressed with some of these students who clearly had taken this course in the last year or two and really had so much knowledge about a lot of the really fundamental basics of finance.

Nancy Barrow:

It's so important. And let's fast forward a bit, the State Treasurer's position. How did that happen? And did you ever have plans that you want to get into state government?

State Treasurer Erick Russell:

I did not. I did not have any plans to run for office. I've been involved politically for quite some time. My husband was a state representative when we met, and first kind of started dating, I had been involved. I really got involved individually when I was in law school, so I was working in the governor's Governor malloy's General Counsel's Office. And then after I finished law school, went back home to New Haven, got involved in the local DTC, then became vice chair of the state Democratic Party in Connecticut. So I've always been really involved, and part of that was because I didn't know about politics growing up. I didn't know about the legislative process. I didn't know a lot about state government, and my first invite up to the Capitol was actually through a college professor named Mike Lawler, and it was when there was a bill to abolish the death penalty that was being discussed. And I had taken a lot of interest in criminal justice policy, and it was my first time seeing government and inaction in that way on the state level. And I realized that all of these really important decisions that were impacting communities like the one I grew up in were being made, and frankly, there weren't a lot of folks with seats at the table that came from my community right necessarily look like me. So I always said it was important to be involved, and I really found a lot of enjoyment in that. But again, was was fine doing that from kind of more behind the scenes roles. And this opportunity presented itself. I was an attorney at a private firm where I was a partner in our public and private finance group. So I had actually represented the treasurer's office and state agencies, quasi public agencies, a lot of municipalities in the state on various finance matters, particularly on the debt side, debt management, pension restructuring. And so I got a lot of phone calls when treasurer wooden announced that he was not going to run and really felt like there was an opportunity for me to combine my interest in public service with my professional skill set that I think really lended itself well to the office, and thought there was a really good opportunity to make some great things happen in Connecticut with some with a great team, and I think we're well on our way there.

Nancy Barrow:

So how has your first year been?

State Treasurer Erick Russell:

I had a very smooth transition with treasurer wooden and can't thank him enough for how well he really set me up for success coming into this role, I finished up my practice at Pullman at the end of November, and I spent the month of December pretty much in the treasurer's office, before I started. I was able to put my team together really get up to speed, and so we were able to hit the ground running. It's hard to believe that almost a year and a half has passed already, and things have been really busy, but there are so many great things going on in Connecticut who are making so much progress, and so I'm really enjoying the work. And I think with my work with the office before there was a lot of the team there, dedicated public servants who have spent so much time working on behalf of Connecticut residents that you know really made again, that transition really easy and been able to help continue the progress that we've been making over the last several years.

Nancy Barrow:

Yeah, it's amazing that time flies so quickly.

State Treasurer Erick Russell:

Certainly. so the Program. This is a first Governor Ned Lamont says that Connecticut is leading the way in creating a family friendly state. He said that numerous in the nation program that we were able to pass and get fully times. Here's the intersection with baby bonds, because we both focus on family and financial security. Baby bonds are an innovative policy to address racial wealth and the racial divide. Can you tell me how you do this with baby bonds? funded here in Connecticut, and it was something that took a few years, really in the making to get over the finish line. But the program is about addressing generational poverty in our state, and cycles of generational poverty. Connecticut is one of the wealthiest states in the country, but we have one of the largest wealth gaps, and it is a wealth gap that has continued to widen over time. That's not specific to Connecticut. We're seeing that all across the country. And you know, this concept was developed by an economist named Dr Derek Hamilton. And so the idea is that, you know, we know that the biggest indicator on someone's ability to build wealth over time is having some access to capital to start. And I think about my family and the community I grew up in, folks that worked really hard every day to help provide for their families and to make ends meet, and the difference between them being able to them paying rent every month, and being able to purchase a home and have an asset that was going to actually appreciate in value over time, was having the money for a down payment, and that's really the concept here. So under baby bonds, for every child now born in Connecticut, whose birth is covered by Husky the state's Medicaid, there will be up to$3,200 invested in a trust on their behalf. And that money will be invested and managed by my office and will grow over the life of that child. And when they're between the ages of 18 and 30, they can access those resources for purposes that are all about wealth building. So they can use it to purchase a home here in Connecticut, to start or invest in a Connecticut business to help pay for post secondary education or job training or to roll into a retirement savings account. That's great. So again, all initiatives here that are designed to help people build wealth over an extended period of time.

Nancy Barrow:

So you're going to have to wait 18 years, really, to figure out how it's working and when they take that money,

State Treasurer Erick Russell:

Correct and you know, so the there's a few things here. I mean, there's one, there's the access to capital, right, which is the 18 plus years down the road. But we also look at this as a really unique opportunity to engage with some of the most in need, families and children in our state. And you know, it's access to capital down the road is helpful, but if folks are off track or disconnected prior to that, right, there's that access to capital is not going to be as impactful. And so we're really planning to do a lot of work to engage with these children and families throughout their lives, whether it's connecting folks with existing services and resources that are out there already through the state, understanding that a lot of people haven't always had the best experiences with government, have not always had positive experiences with government, and being able to engage through a really trusted way now, where people see this long term benefit, I think there's a lot of value. But you know, it's also opportunities to look at new ways to build in additional supports and wraparounds for families throughout this process, and so we're excited about having the program over the finish line in terms of the ultimate access to capital, but really, we're doing a lot of work now to maximize this opportunity and to really use the program as a vehicle for a lot of additional services and supports.

Nancy Barrow:

So do you have a lot of partnerships that you're working with in the community?

State Treasurer Erick Russell:

We do, and we are currently building more of those out. This took a really broad coalition and a lot of collaboration to get over the finish line, and I think that is the only way to get big, innovative things done, is through really building strong networks and coalitions. And so we had educators and local leaders, legislators. We had the business community, hospitals, right, healthcare industry, all of these folks really coming together. A lot of our community organizations and advocacy groups that spent a lot of time really pushing for this program and then ultimately really supporting our work to get the program funded. And it's those same groups that we are collaborating with now, because the best way to connect with people are going to be through these trusted community organizations, people that know the constituencies that they're serving the best. It's how we're going to build out you know the best ways to make this program effective and make it the most impactful. And so we want as many people at the table in that process as possible. We've recently announced a partnership with the community health centers who will be working with parents to be and that's amazing, providing information about the program very early on, and so we will continue to announce more of those partnerships and to develop that coalition as we move forward.

Nancy Barrow:

It's really amazing that Connecticut was the first in the nation to have this I mean, what does that say about our state?

State Treasurer Erick Russell:

I think it's huge, and I think folks in Connecticut should be incredibly. Out, as you mentioned, there's this program is not going to fully pay out until 18 plus years down the road. And I think particularly in politics and in government, we are very used to looking at things from a short term perspective. Because the people who stepped up and supported this, the legislators, the elected officials, it takes a lot of political courage to support something and to fund something that isn't going to bear fruit until you know, I, frankly, will be out of office, and many of the people who supported this program will be out of office. And I think as we are doing the work, we've made incredible progress in really stabilizing the state's finances, improving our fiscal health. So much work has been done over the last many years. This is a way that we can really invest in our long term future as well, and it's just as important as making sure that we're paying down debt and our unfunded liabilities, it's investing in the next generation and investing in building a stronger economic future in Connecticut. And so I'm incredibly proud of, really, the support that was built more broadly, but the courage that people really took to step up behind this program.

Nancy Barrow:

How important is generational wealth?

State Treasurer Erick Russell:

It's critical. And you know, to your point, just about the investing in the future, right? There's investing in these children, yeah, and addressing the problem of generational wealth, understanding that if we have more people who are participating, who have real opportunity at changing their circumstance, that's going to benefit everyone in our state, we're going to have a stronger economy. We're going to have more people paying into the state. We're going to have more skilled workers to help support our business industry. And I think, think again, this is why we were able to build such a broad coalition of support. But it's also the fact that these resources are going to be reinvested back here in Connecticut, right? The program was designed that people are going to be purchasing homes here in the state and starting or investing in Connecticut businesses. We have, again, more educated folks here in our state, and that's what's going to build up our stronger local communities and the state as a whole.

Nancy Barrow:

Yeah I think it's that's part of the provision that they stay here to be able to get this money.

State Treasurer Erick Russell:

Correct. Someone may leave. So if you have a child that may say, the parents move in when they're 10 years old, and they're in California, if they come back here at 25 and it's the time that they're going to be starting a family or in purchasing a home, and you know, that's another incentive for people to continue to move back to Connecticut. We've seen a really significant inflow of people over the last several years. Net, over 33,000 people moving into Connecticut. We want to make sure, again, we're making these longer term investments to continue those trends as well.

Nancy Barrow:

It's interesting I've talked to a bunch of people, and a father, actually, who moved to Connecticut because of Connecticut Paid Leave, which I found really amazing. He was in Florida, had his first child in Florida, and they sat there and they said, Listen, we couldn't take any time off. We we didn't get any paid time off. Let's go to a place when we have our when we grow our family, where it's a really good paid leave process. And so they moved to Connecticut because of Connecticut Paid Leave. And these policies that are really family friendly are so important.

State Treasurer Erick Russell:

It's critical, whether it's paid family leave, it's our investment in our education systems, right? People looking at the work life balance you can have. And I think that was one thing that was really brought to light during covid. Oh, yeah, folks who have been in this grind in some of these big cities and realize now you could have come and have a great quality of life and still and have access to great schools and programs that really support families in our state and people, I think, really appreciate that balance, I think, now more than they did in the past.

Nancy Barrow:

And programs that will support them.

State Treasurer Erick Russell:

For sure, absolutely.

Nancy Barrow:

Yeah, I think that that's so important. Other states have now started the baby bonds. Are you getting contacted by any other states about how we did it so well and planned out for it so thoughtfully?

State Treasurer Erick Russell:

We've been working very closely with other states. So there aren't any other states that have fully gotten it over the finish line, but we've been working with many states who are very interested. So I spent time in Vermont. They've been very interested in we're moving legislation this session. Rhode Island, Massachusetts, New Mexico will be looking at some programs. Nevada was working on some legislation a couple of years ago. They have a funky session that only comes up every couple of years, so they'll be revisiting. And so we're doing a lot of work. We've actually been both, you know, nationally, but also some international conversations. People are very interested in the program. And so, you know, I think this is really important, because it's not one. It's about creating this opportunity and addressing a. Challenge that exists, not just in Connecticut, but across the country. But it also benefits us when other people are engaged, I think, in thinking about programs like this, because it's how we collect broader data in supporting, you know, these types of initiatives. Also from a resource perspective, we have a 501, c3 sleeve of our baby bonds trust that, you know, we're partnering with philanthropy and existing nonprofits and organizations thinking about how we can maybe build out some additional supports and wraparound services for children born eligible for the program. You know, if we have broader reach in terms of a program like this across the country, I think that there are also additional resources that may come with that. So I'm enjoying the conversations right now. We're working very closely with many states that are excited about the opportunity. when it

Nancy Barrow:

When it comes to poverty, Connecticut Paid Leave also does kind of even the playing field, because you're looking at a minimum wage worker that really needs this and really needs to have some help. And so I think that's another really important feature of Connecticut Paid Leave, that it really does help, kind of even the playing field, because everybody who is working in Connecticut can actually use these services and get and get income replacement.

State Treasurer Erick Russell:

No, I think that's so important, and I think a lot of times for and this is why, to my earlier point about needing different perspectives and people from different backgrounds with seats at the table, right is that for a long time, you know, in government generally, we had people who were oftentimes in positions of privilege in some ways, or who had certain types of jobs or made a certain amount of money, and that allowed them the flexibility to actually serve in many of these roles and perspectives of folks who were struggling and were living paycheck to paycheck or working minimum wage jobs, or who had to decide between going to work or staying home with a sick child, and meant they weren't going to be getting paid. You know, policy was informed in that same way as well. And I think the more you know, as we have more diverse perspectives, people with different backgrounds at the table were able to really impact policy in a way that represents everyone in our state.

Nancy Barrow:

And how does Chet help in that aspect as well? Because that's also a family friendly policy as well.

State Treasurer Erick Russell:

Absolutely so Chet is our 529 college savings program here in Connecticut, and I serve as trustee of of that trust, and it's huge. Just as we talked about thinking about the future, investing in the future, it's about making college more affordable. We all know how expensive college has become, or any education, really additional education. And so through the chat program, families can create an account and can contribute on a tax advantage basis. That money is then invested, and the earnings on that investment are not taxed if they're used for educational expenses once a child goes and there's a really broad definition of what those educational expenses can be, but it's again, thinking about getting families engaged in this process early. There's also tax benefits to money that's contributed to your account on an annual basis. And so we've seen it's been really effective. We've had a lot of families that are buying into it, and there are also some great programs off of it. So we have our baby Scholars Program, where if you open an account within the first year of a child being born or an adoption, there's automatically$100 contributed to that account to kick it off. We also have our dream big competition, which is a scholarship program for K through 12 students, which they can enter into by either drafting a short essay or a painting or a drawing or a video, and can win scholarship money that will be contributed to their chat account. You

Nancy Barrow:

You do have a lot of really cool programs in the treasurer's office that I didn't know about.

State Treasurer Erick Russell:

It's great! A lot of it is spreading the word. It's why we really want to make sure we're out engaging with the community around these programs so that people can take advantage of them. There's so many resources that are out there, but it's also, you know, takes people making that investment in the future, and again, that education around the importance of that is is a priority for our

Nancy Barrow:

One of the stats that I thought that was so

State Treasurer Erick Russell:

Totally. And I actually was just having office as well. fascinating about Connecticut paid leave is that 43% of men this conversation with my sister, who just had her second child about a month ago, and my brother in law was going to be are taking bonding leave to bond with their their kids, which I'm taking some time they were able to stagger that a little bit, so happy about that, because there used to be this big stigma about men taking any time off to be with their kids, but it showed to help with postpartum, and it really helps the child in development. yeah, which is great give them some time together, to give her a break, but just bonding, think with your child, and really highlighting the importance of that and prioritizing it.

Nancy Barrow:

What are some of the challenges that you're facing as treasurer?

State Treasurer Erick Russell:

So the state is making a lot of progress, and I think we're doing really well. You know, I think with any long term kind of investment, and we have to be patient. We dug ourselves a hole as a state over many decades, and for us to get where, exactly where we need to be, it's going to take us some time, but we, I think there's been an incredible culture and incredible leadership around really addressing the long standing challenges we've had. We have a full rainy day fund as a state. We'll have nearly $4 billion at the end of this fiscal year put aside. It's, you know, 18% will be close to 18% of our budget, which puts us in a really strong spot compared to our peers across the country. We've paid down over $7 billion in unfunded pension liability. That number will bump up over eight at the end of this fiscal year. We have had several balanced budgets and surpluses, and we've really set ourselves up for long term, sustained success. On that front, we've improved our credit rating, you know. So I think in terms of a we there's still plenty more work to do, and I think it's about keeping our head down and staying focused, and making sure that we don't revert back to many of the poor practices, poor fiscal practices that really put us in a tough spot over time. I think big picture we've were in some spaces five years ago where we were really jumping from crisis to crisis as a state. We didn't have resources. We were really struggling with with many of our budgeting practices, and we are now in a spot where we can really make decisions about where and how we're going to make investments. We need to balance investing in people in our state and programs that are important with the need to, you know, make sure that we're being fiscally responsible. But I think we're in a really strong spot to do that moving forward.

Nancy Barrow:

I love that, investing in people. That's, like, the whole point, right?

State Treasurer Erick Russell:

I think that's what, you know, baby bonds, and many of these programs that we're talking about, paid leave, it's all about, it's in that's just as important. We can look at a spreadsheet right and think about numbers, but our responsibility is to make sure that we are creating a strong quality of life for people in our state and providing opportunities for people to build families and to create a future for themselves that they can, you know, thrive and be successful. And it takes this collaboration, I think to do it.

Nancy Barrow:

Your family must be really proud of you.

State Treasurer Erick Russell:

They are, they are, and, you know, it's, it's great. My family is all doing very well, my sister and my brother, and, you know, it's, again, a testament to my parents, who I watch, sacrifice so much for us to have those opportunities. So it's been, it's been great.

Nancy Barrow:

It's been really an honor speaking with you, and thank you so much for what you do for the state of Connecticut and serving the people of Connecticut. It's really an honor to have you here.

State Treasurer Erick Russell:

Well very happy to be here. Thank you for having me, and thank you for all the work that you're doing as well.

Nancy Barrow:

To get more information or to apply for benefits. Go to ctpaidleave.org This has been another edition of The Paid Leave Podcast. Please like and subscribe so you'll be notified about new podcasts that become available. Connecticut Paid Leave is a public act with a personal purpose. I'm Nancy Barrow, and thanks for listening.

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