States Investing the Most and Least in Children

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Most Americans agree that it is important to provide children with ample opportunities for success, regardless of where they live. To this end, state and local government budgets include provisions for children’s basic education, health care, social services, and other support programs.

Still, children receive widely varying amounts of resources depending largely on their state of residence — this is the conclusion of “Unequal Playing Field? State Differences in Spending on Children in 2013,” a report released Tuesday by nonprofit research organization Urban Institute. 24/7 Wall St. reviewed the 10 states investing the most in their children, and the 10 states investing the least.

States vary in many respects, so the presence of spending differences across the nation is not a major surprise. However, the differences may be much wider than what might be expected. Vermont, which leads the nation with per-child expenditure of $13,430 a year, spends nearly three times as much as last place Utah, which spends just $4,594 per child annually.

Click here to see the states investing the most (and least) in their children.

Generally, more taxes can be collected in states with higher income residents. The median household incomes in eight of the 10 states with the highest per-child expenditures exceed the national median income of $55,775 a year. The opposite is true in states with the lowest per-child expenditures.

In an interview with 24/7 Wall St., Julia Isaac, senior fellow at the Urban Institute, explained how the importance of incomes to state and local tax coffers is in many cases a self-perpetuating cycle. “A state that has more poverty is likely to have lower tax revenue, which makes it tighter for them to spend, and a state that has more families that are doing well has more capacity for raising taxes, which can then support spending.”

The concern is “[in] states that are spending less, it’s harder on the children today and it also may be hard on the state economy in the future,” Isaac said.

Based on current population projections, the already substantial disparity in spending between states is likely to increase. The populations of many of the states with the lowest per-child spending are projected to grow much faster than average, while many of the states with high per-child spending have relatively low projected population growth.

For example, if spending levels do not change In Vermont, where the child population is expected to decline, per-child expenditures will go up. In Arizona, by contrast, where the under 18 population is projected to grow by 16%, spending will have to increase proportionately just to maintain the already relatively low spending levels.

It appears that there is a relationship between the concentration of certain racial heritages in the United States and the level of state and local funding appropriated to children in the state. According to the Urban Institute, approximately 47% of Latino and Hispanic children live in states that spend less than $7,000 per child a year. Half of all Native American children are likely to grow up in a low-spending state. Just 28% of white children grow up in such states.

The federal government guarantees retirement income to seniors regardless of their state of residence. It is if anything more unfair for children to receive different levels of resources based on where their parent lives when they cannot even choose their state of residence. This is one reason Isaac suggests the federal government could do more to equalize spending across states.

To determine the states spending the most and least on children, 24/7 Wall St. reviewed expenditure data from the Urban Institute’s report “Unequal Playing Field? State Differences in Spending on Children in 2013.” The report measures total state and local government spending on K-12 education, Medicaid benefits for people under age 19, the Children’s Health Insurance Program, Maternal and Child Health Block Grants, the Child Care and Development Fund, child support enforcement, child welfare programs, state earned income tax credits, and the Temporary Assistance for Needy Families program. The final expenditure figures are for 2013 and are adjusted for cost of living. For additional analysis, data on the share of the population 19 and under was added from the U.S. Census Bureau’s 2015 American Community Survey. Data on median household income, child poverty rate, child dependency ratio, racial composition, share of foreign-born children, and private school enrollment also came from the ACS and is for 2015. The share of three- and four-year olds enrolled in school came from the National Institute for Early Education Research and is for 2015. Test results for fourth and eighth graders on the National Assessment of Educational Progress are for 2015 and came from Edweek.