When COVID-19 began spreading in March 2020, many predicted the resulting economic shut down and millions of job losses would create a downturn in the economy that would take years from which to recover. Instead, the unprecedented federal response helped boost the economy and provided millions of families with the support they needed to get by. Today, the faster than expected economic recovery, created in part by robust federal relief, has left many states with temporary budget surpluses. This is a once-in-a-generation opportunity to make down payments on programs that communities desperately need, like expanding the supply of child care centers, paying early child care professionals a living wage, and providing mental health services to combat the pandemic’s traumatic effects on children and youth.

Unfortunately, many states are squandering their opportunity. Instead of using their budget surpluses to invest in the health and well-being of the children who have been hit hard by the pandemic, dozens of states are passing costly tax cuts that will disproportionately help the wealthiest citizens. Idaho, Iowa, Indiana, Kansas, Kentucky, Mississippi, Utah, and Nebraska have all passed massive regressive tax cuts this year and the list is continuing to grow. For example, Georgia passed tax cuts last month that could total more than $2 billion, with nearly 40% of its benefits going to the richest 5% of all tax filers. At a time when we should be doubling down on our investments in children, these cuts leave us with fewer resources to do so.

In addition to being costly, the cuts will put state finances in a precarious position in the coming years. When federal relief dollars dry up and tax revenues return to normal levels, state governments will not be able to sustain themselves with such low taxes. Many of them will be forced to either raise taxes (an unlikely task for many legislatures) or they will make painful cuts to essential services and programs. Advocates for children know all too well that in budget crises, services for children and youth often are the first things cut. The last time states faced a budget crisis, in the aftermath of the 2008 financial crisis, nearly all states made major cuts to core public services. According to a study from the Center on Budget and Policy Priorities, 37 states out of the 44 states examined significantly cut education, social services, and health care from 2008 to 2012 (all services children disproportionately rely on). Permanently cutting taxes today puts states on a dangerous path for children and youth in the coming years.

A few states however are showing that there is a better way forward. In Connecticut, the legislature passed three bills during its most recent session that will dramatically expand mental health services for kids. The bills will invest a total of $223 million in expanding mental and behavioral health services including investments in school-based health centers, mobile crisis centers, increased wages for child care workers and expanded preschool. Meanwhile, in Oregon, Gov. Kate Brown signed into law a $100 million child care bill that includes $21 million to recruit and maintain the child care workforce, $27 million to increase subsidy rates for child care facilities, and $17 million for grants to community-based organizations to launch new providers to help alleviate the child care shortage. States like Oregon and Connecticut are great examples of how to use budget surpluses and federal relief funding to invest in those who need support the most.

Josh Weinstock is a policy associate at Children’s Funding Project.