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The Worrisome Relationship Between Population Projections and State Spending on Kids

A new study confirms a long-held assumption but also reveals a potentially big problem for the future.

(AP/The Star-News/Ken Blevins)
Should geography determine a child's chances for success? A new look at how much states spend per kid indicates that might be the case.

An analysis by the Urban Institute found that states that spend more per child tend to have better outcomes when taking public education, health and social services into account. At the two ends of the spectrum, Vermont spends nearly three times as much annually on children as Utah. The national average is $7,900 per child. A total of 14 states spend less than $7,000 per child and nine spend more than $10,000 each year.

The analysis also found regional trends: States in the Northeast are more likely to spend more while states spending less than $7,000 per child are mostly in the South and West.

Education spending accounts for most of the annual totals. The data, which count all children in each state, is adjusted for a state's cost of living. For those reasons, the annual spending total often appears lower than education formula funding levels per state.

Julia B. Isaacs, who co-authored the study, says the findings are troubling. "These wide disparities in public investment," she says, "raise concerns about whether children nationwide are on equal footing when pursuing the American Dream."

Isaacs is concerned about what the current spending trends may mean for future generations as well. That's because the states that tend to spend the least per child are also the ones where child populations are projected to grow the most. Conversely, states in the higher-spending Northeast are facing a child population decline.

For example, Texas is projected to see the most growth with 600,000 more children between 2013 and 2030. That means that Texas, just to keep pace with its annual $7,120 per child, would have to spend $4.4 billion more per year by 2030. On the other hand, New York would save $3.5 billion annually as its child population declines and if it keeps pace with its current $12,232 per child.

Isaacs says her findings raise broader policy questions about state and federal spending choices and whether more federal resources should be targeted to states with high population growth and low spending on children.

The analysis also showed that health and education outcomes correlate with each other. When it comes to health care, for instance, Medicaid provides a lot of support for services delivered in school, such as dental screenings or monitoring health conditions like asthma. In a recent survey of school superintendents, nearly half reported using their Medicaid reimbursement to expand health-related services and supplies.

In a new paper on the topic, the Center on Budget and Policy Priorities' Jessica Schubel notes that such expansions "benefit all children -- not just those enrolled in Medicaid." It's one of the many reasons, she adds, that "Medicaid coverage has a significant positive impact not only on children's health, but also on their educational attainment and job earnings."

Isaacs says other factors that influence a child's chance of success are also at play -- but much harder to measure. For example, the Northeast is also home to many of the nation's higher-income states. Higher earnings are known to correlate with better outcomes for kids. Still, she says, the numbers are a good baseline for considering each state's overall investment.

"It's not like the data says [Vermont] kids are doing three times better than in Utah," Isaacs says. "But where you look and control for differences, you still find that states that tend to spend more [is where kids] do better."

Liz Farmer is a former GOVERNING fiscal policy writer.
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