Today, more than 36 million families will receive their first advance child tax credit payments. This marks a historic new investment in the nation’s children, and the Biden administration has signaled it will continue to prioritize lifting families out of poverty.

Now, state and local governments must determine how to spend other new federal funding from the American Rescue Plan Act in ways that complement existing investments. An accurate picture of current public spending can help them make the best use of new public funds, helps the federal government ensure its new investments do not exacerbate existing spending differences across states, and enables a better understanding of the effects of public spending on the families and children who rely on it.

Our State-by-State Spending on Kids Dataset offers the most comprehensive account of public spending on children available, and it gives state and federal administrators the data they need to make informed decisions amid pandemic relief.

The State-by-State Spending on Kids Dataset illustrates where and how new federal investments can best support children and families. Take New Jersey as a case study: we found state investments in public education drive per child spending in New Jersey higher than in many other states, but New Jersey spends less on health and economic supports, and draws down less in federal spending across all categories, than the US average. This pattern of investments may explain why New Jersey ranks high (PDF) on educational outcomes, but large socioeconomic, racial, and ethnic disparities remain.

Public investments matter for families’ ability to support children’s healthy development. As the American Rescue Plan Act funding rolls out, advance child tax credit payments hit families’ bank accounts, and Congress considers additional proposals, now is the time for data and evidence to drive smarter public spending. Our dataset can inform policies meant to address long-standing budget constraints and policies to advance equity across states so all American children have an equal opportunity to thrive.

Read the full article about spending for relief of family poverty by Erica Greenberg, Julia B. Isaacs, Eleanor Lauderback, and Margot Jackson at Urban Institute.