In addition to tapping federal sources, states spend their own dollars to fund child welfare services and activities. State and local funds are used to match federal funds and pay for costs that federal funds do not cover.
Most states primarily use state dollars to fund child welfare, although some report using more local dollars than state dollars. The structure of a state’s child welfare system (i.e., whether it is state- or county-administered) contributes to the participation of local jurisdictions in financing child welfare activities.
In state fiscal year (SFY) 2022, child welfare agencies across the country spent $17.3 billion in state and local funds. This represents a 1 percent increase over the past decade, despite a recent 3 percent decline since SFY 2020.
Child welfare agencies’ use of state and local funds, SFYs 2012-2022*
Source: SFY 2022 Child Welfare Financing Survey
Note: All dollar amounts have been inflated to 2022 levels.
*The figures presented in this graph reflect an analysis of 34 states with sufficient data across all six surveys conducted by Child Trends from 2012 to 2022 (surveys are conducted every two years). Therefore, the total amount of SFY 2022 state and local expenditures presented in this graph ($13.5 billion) differs from the total amount presented in the text ($17.3 billion).
The recent decline in state and local expenditures should be expected given the influx of time-limited federal dollars in response to the COVID-19 pandemic, which reduced the need for state and local funding to cover child welfare activities. In addition, decreased child welfare caseloads have resulted in states needing to spend fewer of their own dollars.
Child Trends and Child Welfare Financing
Child Trends is a trusted source of information about how child welfare agencies finance their work. Every two years, Child Trends—with support from Casey Family Programs and the Annie E. Casey Foundation—conducts a national survey of how each state finances child welfare. These data are used to create a national report, state-level factsheets, funding source factsheets, and other products that describe funding sources such as Title IV-E, Temporary Assistance for Needy Families (TANF), state/local funding, and more.
Child Trends also works directly with states to help them map how their unique child welfare systems are financed, clarify how decisions are made, and offer insights into potential financing-related changes to promote best practices and improved outcomes for children and families. If you are interested in learning more about our work in this area, please contact Kristina Rosinsky.