As we enter the new year, states across the country are gearing up for their legislative sessions—and this year will bring potential funding challenges that advocates for children and youth must face. For years, states have had record-breaking budget surpluses, largely thanks to federal action in response to the COVID-19 pandemic. However, because of the expiration of federal pandemic aid programs and the fact that most states have pursued tax cuts since 2020, states are collectively expected to reduce spending from their general funds by more than $1 trillion in 2025. At the same time, major federal action is expected to address the expiration of many provisions contained in the 2017 Tax Cuts and Jobs Act, including significant tax cuts that disproportionately benefitted wealthy Americans and corporations. Extending these tax cuts at the federal level, combined with rounds of tax cuts at the state level, will reduce available revenue for crucial programs and services at a time when we know they are vitally needed for the well-being of children and families. For instance, child care costs continue to climb, already constituting one-fifth of a family’s annual income—and cost more than rent—in every state. Meanwhile, youth mental health needs continue to increase with more high school-age students experiencing persistent feelings of sadness, hopelessness, or even considering suicide. Families and children need more support not less; consequently, it has never been more critical for advocates for children and youth to engage policymakers about the need for adequate revenue, defend against harmful reductions in funding, and explore ways to raise new revenue to support programs and services for kids.Preparing for a New Funding LandscapeState and federal spending represents the vast majority of the funding for programs for children and youth. An unprecedented increase in federal spending in response to the COVID-19 pandemic coincided with an unprecedented increase in state spending too, with some of the fastest growing general fund spending since that data has been collected. Accordingly, states expanded eligibility for programs, enhanced subsidies, and/or enacted new tax credits or other benefits for children and families in recent years.However, it is likely that many states will face pressure to reduce funding across the board this year. For example, the Center on Budget and Policy Priorities is already tracking the fallout from these recent state tax cuts. The State Priorities Partnership, a network of more than 40 nonprofit research and policy organizations across the country, can provide more context and information about developments with your state’s budget and revenue.Advocates need to prepare to defend against ill-advised cuts or attempts to reduce program quality or safety. For example, decreasing the required ratio of staff members to children might seem an attractive way to some policymakers to expand or maintain access to early care and education or out-of-school time programs while reducing spending. But these ratios are critical both for staffing and child development. Advocates can prevent misguided policy changes by reaching out to their state legislators to build relationships and provide foundational information about child and youth programs and services in their state. Advocates should bring data and personal stories about the impact of programs and services, who they serve, how they work, and how they’re funded. By educating policymakers on these issues early and often, advocates can equip state leaders with the facts and data they need to make better-informed funding decisions.Funding for Kids Remains Popular with VotersWe know that increasing government spending on programs for children and youth remains popular with voters, despite the price tag. In the November 2024 election alone, voters in local communities approved an additional $133 million in public spending for kids with revenue from budget set-asides and new sales, property, and excise taxes. In addition, voters in Washington state rejected an attempt to repeal a 2021 tax on capital gains that provides funding for both K-12 education and child care services. When given the chance, voters are more than willing to raise and dedicate public revenue to early childhood education and care, after-school and out-of-school programs, youth mental health, and more. Advocates can share these examples with their state legislators as evidence of constituent support for sustained or new funding for kids.While it won’t happen overnight, a dedicated community of advocates equipped with the right tools can secure significant new revenue for kids in a variety of states and political contexts.Laying Groundwork for Future State FundingAdmittedly, winning significant new state revenue—as we’ve seen advocates do with New Mexico’s land grant permanent fund and Vermont’s payroll tax—can take years of work and planning. Advocates, community leaders, service providers, and families need the information, skills, organizational structure, and ability to mobilize supporters to persuade voters and elected officials of the need.Advocates can begin laying the groundwork now with their state legislatures, though. For example, even without a dedicated source of revenue, state legislatures can create a container for future funds as a powerful first step. In 2017 in Louisiana, for example, advocates successfully championed the creation of a special fund known as the Louisiana Early Childhood Education Fund, to begin to set aside funding for early childhood care and education programs. But this fund was initially empty. In subsequent years, revenue from taxes on various sources, including sports betting, hemp-derived CBD products, land-based casinos, and more, has been dedicated to this fund; as of fiscal year 2024 the fund’s various sources generate more than $15 million annually.These examples show that, while it won’t happen overnight, a dedicated community of advocates equipped with the right tools can secure significant new revenue for kids in a variety of states and political contexts.We’re Here to HelpFortunately, Children’s Funding Project can help equip policymakers and advocates with the tools necessary to develop their fiscal data infrastructure to support the needs of children and youth at the state level. Our fiscal mapping services can help advocates and policymakers identify how much money their state currently invests in programs and services for children and youth and quickly analyze how state policy changes might impact funding for specific programs or outcome areas. Meanwhile, cost estimation and cost modeling can help state leaders and advocates examine costs related to specific program requirements, staffing needs, employee wages and benefits, and more. Finally, our sourcing additional funding team can help analyze which sources of revenue are legally and politically feasible in your state as well as how much money different approaches might raise for programs for children and youth. Contact us to learn more about how we can support your state-level efforts.Bruno Showers is state policy manager at Children’s Funding Project. Sign up for our monthly newsletter to receive the latest news about funding for kids, new resources, webinar opportunities, and more! Close Share it! Share on Facebook Share on X Share on LinkedIn Click to copy URL Link Copied!
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