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Revenue Options

There are numerous funding strategies state advocates and leaders can pursue for increasing the revenue from state and local sources that can be directed to high-quality early care and education. There  has been significant work done at both at the state and local levels, to support quality early care and education through dedicated taxes. These revenues can have a significant impact on long-term goals, and there have already been several early successes in using them to  help close the extreme funding gap in early care and education.

Funding Our Future: Generating State and Local Tax Revenue for Quality Early Care and Education

The BUILD Initiative, Center for American Progress, Children’s Funding Project, Institute on Taxation and Economic Policy, and University of Maryland College Park, Schools of Public Health and Public Policy — This brief introduces state and local tax policy areas for consideration as part of the push for expanded public investment in early care and education. Seven tax policy areas are presented. Each tax is defined, and examples are included showing current use of these taxes for early care and education, policy ideas that have been tried but have not yet passed and new, next-generation ideas.

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Creating a Bigger Pie: Allies Share State Revenue-Generating Strategies for Early Childhood Programs

Alliance for Early Success — In October, the Alliance for Early Success was joined by the Children’s Funding Project for an important conversation about funding streams. As we begin to think beyond COVID relief funding and about a future where early childhood programs are better and more sustainably funded, it will be important to consider all of the revenue streams possible. We discussed ways to advocate for both a bigger slice—and a bigger pie.

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Innovative Financing to Expand Services So Children Can Thrive

Children's Funding Project and Harvard Graduate School of Education — This policy brief shines light on ten innovative methods to finance services for children and youth. Some of these methods have been successfully

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Prioritizing Our Future: How Cities and States Dedicate Funds for Early Care and Education

Louisiana Policy Institute —This paper highlights models of public, dedicated funding for early childhood to show the variety of creative financing mechanisms that states and localities have used to protect investments in early childhood from reallocation or reduction.

State Enabling Legislation for Special Taxing Districts

State Enabling Legislation for Special Taxing Districts

Children's Funding Project —This is a short brief on state-enabling legislation that gives localities (either alone or together) the authority to create a special taxing district dedicated to child and youth services. It’s important to note that this legislation does not establish any districts or levy funding; individual districts must be established by local or regional voter approval.

Moving Toward More Equitable State Tax Systems

Institute on Taxation and Economic Policy — This resource contains a series of policy recommendations that can serve as a guide to new lawmakers, advocates, and others seeking to improve their state’s tax codes.It explains the importance of favoring taxes on income and wealth over taxes on consumption, the value of certain targeted tax benefits for families living in poverty, the need to abandon ineffective, unnecessary tax subsidies for high-income households, and the promise of bold new options for improving the regressive distributional outcomes of state and local tax policies.

State Preemption Toolkit

AHA Voices for Healthy Kids —States are increasingly passing preemption laws that limit the ability of local governments from taking action on an issue, so this toolkit was created to provide information and resources that support advocacy for local governments maintaining their ability to pass laws about issues that are important to their communities.

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Guide to COVID-19 Funding Streams

Federal COVID-19 relief has created numerous shorter-term funds for early childhood, and Children's Funding Project has put together this comprehensive guide to the key ones.