Image by Steward Masweneng from Pixabay
State legislatures across the nation gaveled into a tremendously challenging budget year in 2025. With federal ARPA funds and other COVID-era revenue streams exhausted, a highly volatile federal environment, and a still-rising cost of living continuing to put pressure on individuals and families, state legislators faced tough choices. Even so, many child advocates across the country reported meaningful progress and hard-fought wins at their state capitals this year (and others are still at it with several state legislatures in session, or in limbo, as of this writing).
The Growing Child Tax Credit Movement
Child Tax Credits are having a moment in state legislatures across the political spectrum. New or expanded Child/Family Tax Credits were passed in 2025 in Georgia, Illinois, and Colorado, with seventeen states now offering some form of a child tax credit to families. Colorado’s new Family Affordability Tax Credit is projected to make that state’s child poverty rate the lowest in the country, and 40% lower than the second-lowest state, according to Colorado Children’s Campaign.
Some states, like Colorado, Vermont, and Oregon, have crafted these tax credits to benefit families earning lower incomes; however, many leave out families at the lowest income levels – leaving more work for child advocates in future legislative sessions.
Victory from the jaws of deficit – state budget advocacy
Some states took the tax code by the horns this year, finding new revenue sources to help close gaping budget holes. The state of Illinois overhauled its tax code to generate $1 billion in new revenue. As a result, Children’s Advocates for Change and their allies were able to win significant investments in children with the creation of a state Child Tax Credit, additional funding for early childhood education and care, early intervention and home visiting programs, further investments in K-12 education, and funding for additional staff at the Department of Children and Family Services.
Facing a projected $16 billion deficit over the next four years, Washington state enacted a tax reform package through several pieces of related legislation. While falling short of advocates’ goals, the new tax package is projected to generate $9 billion over the next four years. The Children’s Agenda and their allies plan to continue their push in the next legislative cycle for tax code reforms that shift the state’s tax burden away from low- and middle-income families to ensure the ultra-wealthy pay their share.
Falling income tax rates on a collision course with federal cuts
Unfortunately, many states continued down a revenue-depressing path this session, following a trend towards reducing individual and corporate tax rates and/or enacting flat tax rates. These include Georgia, Colorado, Indiana, Kansas, Louisiana, Mississippi, and South Carolina. As of this writing, North Carolina’s state legislature is at a budget stalemate over how aggressively to reduce state income tax rates.
2025 has also brought massive unplanned cuts to federal funding, as well as substantial new federal costs being passed down to states. State budget writers in future sessions will have to reconcile falling state revenues and evaporating federal funds with their states’ essential programs and services. For example, Kansas Action for Children reports that due to falling tax revenue, Kansas is expected to experience a budget shortfall of $730 million by FY 2029 – and that figure does not include the $41 million SNAP cost share that the federal government will require Kansas to take on as a result of the recently-passed One Big Beautiful Bill Act.
Early Childhood shows big gains in a tough budget year
Despite very constrained state budgets, child advocates were able to advance meaningful public policies that improve the lives of children and families, across several policy areas, most notably in early childhood education and related programs.
Arizona made the largest state investment in over fifteen years, with almost $50 million in state general funds towards child care issues. Colorado preserved its child care subsidies and increased funding for its universal preschool program. Georgia made several significant new investments in child care and Pre-K programs, including $7.42 million in lottery funds to improve Pre-K teacher and assistant teacher pay. Nevada edged closer to a Universal Pre-K program with a $9 million appropriation over the biennium for free or low-cost Pre-K in underserved communities.
Iowa’s governor used executive power to extend a pilot program that allows eligible child care workers to qualify for Child Care Assistance – a big win for Common Good Iowa and their allies. New York state invested $400 million in a compensation fund intended to help stabilize the child care workforce. Virginia’s legislature enacted an Employee Child Care Assistance Pilot Program, with $25 million in funding, alongside several other policies aimed at improving early childhood programs and services in the state.
Utah introduced (and passed!) more early childhood legislation this year than in any session in the last decade, according to Voices for Utah Children. Utah enacted an increase in its preschool grant program, among other measures. The Texas legislature advanced several child care initiatives, including $100 million to reduce the waiting list for the state’s child care scholarship program. Unfortunately, Washington’s budget shortfall led to cuts into many early learning programs. However, state legislators prioritized early learning through several policy bills that make it easier for families in Washington to access child care and other needed support services.
- Early intervention and home visiting programs in several states, including Georgia, California, Washington, and Illinois, received budget increases.
- New or expanded paid parental leave policies were passed in Iowa and Tennessee, and Vermont passed new protections for unpaid leave. A new Paid Family and Medical Leave program passed both the House and Senate in Virginia, but was ultimately vetoed by Governor Youngkin.
- Following the national trend, both Kansas and Illinois established new Departments of Early Childhood – with Illinois appropriating $14 million to launch the department.
Mixed results in health care
With tremendous uncertainty around Medicaid at the federal level, many states shied away from improvements to health care coverage in their states – or even went backward. Iowa’s legislature enacted new red tape in the form of work reporting requirements on its state Medicaid program. Voices for Utah’s Children managed to fend off legislation that would have eliminated the state’s CHIP program.
There were also some bright spots: Virginia and Vermont both extended Medicaid coverage to include doula care. Colorado Children’s Campaign helped secure continuous coverage for children aged 0-3. Arkansas Advocates for Children and Families and its allies won “presumptive eligibility,” which fast-tracks Medicaid coverage for pregnant women, allowing them to receive prenatal care more quickly. Georgia made several investments to improve access to maternal health care, especially in rural and underserved areas. Kentucky Youth Advocates helped pass House Bill 90, which paves the way for freestanding birth centers in Kentucky, offering a safe and equitable alternative to hospital settings for prenatal, delivery, and postpartum care.
Taking tech threats to kids seriously
States are taking on a growing area of public policy concerning the threats that big tech and its various products pose to children’s mental health and safety. The Children’s Agenda collaborated with the Attorney General’s Office to advance legislation that holds big tech accountable for addictive online content targeting children. Georgia’s legislature dedicated $270 thousand to studying the impact of social media on the mental health of Georgia’s children. Tennessee and South Carolina both passed legislation to criminalize the use of AI or other technologies to create exploitative images of children.
New York, Tennessee, North Carolina, Alabama, and several other states passed legislation this session requiring schools to limit access to smartphones during the current school year. This policy brings the total to 17 states, plus Washington, D.C., that have phone-free school legislation or executive orders.
Child advocates worked hard to make gains in many other areas, including fighting human trafficking, tackling the high cost of housing, improving child welfare policies, juvenile justice reforms, and many other areas. Despite facing enormous budget headwinds, advocates for children across the nation deserve tremendous credit for making significant strides to improve the lives of children and families in the 2025 legislative session.
Acknowledgments
Thank you to the many network members who shared their legislative wrap-ups with the Partnership! Children’s Action Alliance (AZ); Arkansas Advocates for Children and Families; Children Now (CA); Colorado Children’s Campaign; Voices for Georgia’s Children; Children’s Advocates for Change (IL); Common Good Iowa; Kansas Action for Children; Kentucky Youth Advocates; Children’s Advocacy Alliance (NV); Citizens’ Committee for Children of New York; Schuyler Center for Analysis and Advocacy (NY); The Children’s Agenda (NY); Children’s Trust of South Carolina; Tennessee Commission on Children and Youth; Voices for Utah Children; Voices for Virginia’s Children; Children’s Alliance (WA); Voices for Vermont’s Children; and Children At Risk (TX).
Many thanks to Melissa Mason, Karabelle Pizzigati Initiative Fellow at the Partnership for America’s Children, for her research assistance with this blog.