Unequal Playing Field?

Research Report

Unequal Playing Field?

State Differences in Spending on Children in 2013

Abstract

For children to thrive and reach their full potential, they need adequate food and shelter, high-quality health care and education, safe environments, and supportive parents and families. Though families play a key role in meeting children’s needs, society also provides resources and services to support children’s healthy development.

Through their funding of public schools, health systems, and social services, state and local governments provide resources and services to support children’s healthy development. Although not all investments translate directly into better child outcomes, a wide disparity in public investments raises concerns about whether children from low-spending states are on equal footing when pursuing the American Dream.

How much do states differ in spending on children?

State spending on children varies widely, with Vermont spending nearly three times as much on children as Utah. States spending $10,000 or more are generally concentrated in the Northeast, while many states spending $7,000 or less are found in the South and West.

Differences in education allocations drive most of the spending differences on children. Though children’s outcomes are affected by multiple factors, health and education outcomes tend to be higher in states with higher spending levels.

Do children of color tend to live in low-spending states?

Latino and American Indian children are more likely than non-Latino white and black children to live in low-spending states. Half of American Indian/Alaska Native children live in Arizona, Oklahoma, South Dakota, and other states spending less than $7,000 per child.

Similarly, 47 percent of Latino children live in low-spending states, with particular concentrations in California and Florida. Only 28 percent of non-Latino white children and 30 percent of black children live in states spending less than $7,000 per child.



How will growth in child populations affect future spending?

Child populations are projected to grow in southern and western states such as Florida and Texas that spend less per child and to decline in states such as New York and Ohio that spend more. 

It is uncertain whether states that have traditionally spent low amounts per child will boost spending on children to keep up with population growth. If they do not, spending per child will fall in many states, widening the gap between high-spending and low-spending states and heightening concerns about child outcomes.

Policy Implications

  • Low-spending states with increasing child populations may face a fiscal and political challenge of increasing spending on children to keep up with population growth. Although growth in child populations will be accompanied by growth in the adult parent populations (voters and income-earning workers who help support state spending policies), it still may be challenging for these states to increase spending to keep up with population growth.
  • The federal government also could respond to shifts in child populations and disparities in state spending on children. The federal government already plays some role in redistributing resources across states. It spent about $4,500 per child in 2013, and its share of spending on children rose during the Great Recession. But we do not know how average federal spending per child varies across states.
  • We should avoid block grants, which lock in current spending patterns at the expense of children in states experiencing population growth. If converted to federal block grants with fixed funding amounts to each state regardless of the number of children, federal spending per child for federal entitlement programs (e.g., Medicaid) would decline in the 35 states with increasing child populations, while those states may be facing declines in the state spending per child.
  • Should we consider increasing federal spending on children to offset declines in state and local spending and to target federal resources on states with high population growth or low spending on children? Doing so would run counter to the long history of relying on state and local investment in children and public education. We might consider approaches that maintain control of public education at the state and local level while providing less-affluent states with more shared federal and state tax revenue or develop new financing mechanisms for joint federal-state programs.

Before considering whether state and federal policymakers should do more to equalize spending on children across states, we have to address basic assumptions within the status quo. For example, we take it for granted that seniors in various states generally receive the same minimum retirement benefit and have the same access to Medicare. If we expect equity for seniors living in different states, why are we so accepting of large differences in state spending on children?

It may be hard to reach agreement on policy solutions to the disparities in public spending on children, but the first step is to acknowledge the problem.

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