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January 30, 2025

Investing in a Commonwealth Kids Credit Means Investing in a Healthier Virginia

We all want to live in a state where each family has the resources needed to give their children a healthy start. Research shows that poverty has harmful impacts on a child’s health. Unfortunately, approximately 1 out of 8 children in Virginia live in households with incomes below the poverty line, putting their health and their future at risk. Proven policy choices like the federal Child Tax Credit have significantly reduced child poverty in the past and allowed families to better afford housing, food, and more. Yet opportunities to build on these successful choices have not advanced at the state level. The health of Virginia’s children is at stake. By establishing a Commonwealth Kids Credit (a refundable state Child Tax Credit), lawmakers can choose to help families afford essentials like nutritious food, quality health care, and safer living conditions, ultimately supporting better health outcomes for children and adults alike. 

How Does Child Poverty Impact Health?

Economic security directly impacts a family’s ability to access health care and their opportunity to live a long, healthy life. Studies have proven that child poverty significantly affects health outcomes, but many Virginia families don’t need to see the research to realize how detrimental it is to their health — they have long been living in its impact. 

Poverty harms physical and mental health

Children who are raised in households with low incomes and under-resourced communities are more susceptible to a host of health risks beginning even before birth. Neonatal and infant mortality rates are a strong indicator of how economically secure a community is. Infants born into poverty are more likely to experience low birth weight compared to those in more economically secure households. Research shows that both income and income inequality determine infant health outcomes.

Poverty continues to harm health outcomes after childbirth, especially for families in under-resourced communities. Historical and recent policy choices have pushed low-income families into neighborhoods that have been subjected to more significant environmental hazards, exposing children and their families to poor water quality, infectious diseases, environmental pollution, toxins, and more. Families with low incomes are also far more likely to live in older homes containing lead paint, increasing their exposure to these hazards. Black families are particularly impacted. By boosting family income and increasing economic opportunity, families would be better able to afford a safer, healthier place to live.

A lack of access to fresh food only exacerbates these risks, making it harder for children in low-income families to have a healthy start in life. High-poverty communities are often “food deserts” due to the lack of grocery stores and fresh food options, forcing families to rely on processed foods that contribute to health complications. These factors collectively create a cycle of poor health, but a few hundred dollars from a Commonwealth Kids Credit could help with transportation to grocery stores or buying produce and healthy food options.

a young boy smiles at the camera while holding a spoon above a bowl with fruit and granola. Another young child and adult are blurred in the background

Increasing economic security would also support a child’s mental health. Research shows that the stress and instability associated with living in poverty make children more susceptible to psychological challenges that impact overall development. Additionally, caregivers with low incomes are more likely to struggle with depression, anxiety, and other forms of psychological distress, which can harm their children’s emotional well-being. Unfortunately, mental health challenges can perpetuate the cycle of poverty, causing children who grow up in emotionally and financially unstable environments to face more barriers to getting by, let alone getting ahead.

Poverty stands in the way of seeking treatment

Research shows that housing instability significantly increases the likelihood of children being in fair or poor health, as it creates additional barriers to maintaining stable health care access. Housing insecurity often leads to overcrowded homes and frequent moves, making it more difficult for families to establish a medical home and seek preventive health services for their children than securely housed families. Increasing economic security could make preventative care and treatments more accessible and affordable.  

Families with low incomes can’t always afford to take time off from work for medical appointments or preventative care. Even when they can, they may not be able to afford those services. For families without health insurance, an annual physical generally falls between $100 and $250. And lab tests can range from $25 to over $1,000, depending on the type of test. These costs could significantly increase if additional procedures are required. 

Financial barriers to health services can lead to all sorts of health complications. Studies show that children in low-income households experience higher rates of terminal or chronic health conditions, such as asthma, diabetes, and obesity. These conditions are often more severe and further complicated by limited access to preventative care and early intervention. Children who develop chronic or terminal illnesses, such as cancer, face worse outcomes simply due to their family’s income, as they are less likely to receive access to timely and appropriate treatments. Although these outcomes reflect the broader issues of inequality within the health care system, they can still be partly mitigated by making sure that families can afford the basic needs of their children. By helping families afford essentials like nutritious food, quality health care, and secure housing, a state Child Tax Credit could lead to better health outcomes for children and families alike. Every child deserves the opportunity to thrive, free from the health limitations of financial instability, and a Commonwealth Kids Credit could help remove some of those barriers.

A Commonwealth Kids Credit to Boost Economic Security and Health

Investing in children’s health not only requires improving access to health care but also providing economic support to families who need it most. By taking a holistic approach to poverty and health, we can create a healthier, more equitable commonwealth. Targeted economic support, like the federal Child Tax Credit (CTC), is a proven choice to increase economic opportunity and improve health outcomes for children. Federal lawmakers temporarily expanded the CTC in 2021 by increasing the credit amount, making it available to families with the lowest incomes through refundability, and providing monthly advance payments. Research shows that families used much of their Child Tax Credit to meet essential needs. The majority of what families spent went toward food and housing, and a fifth went toward their children’s specific needs, such as child care and children’s clothes. These payments were particularly impactful for low-income families and Hispanic and Black households, whose spending in response to the credit was greater than that of the average household.

Image Title: Child Tax Credits Help Families Better Afford the Basics and Raise Healthier Children. For each $100 received through the temporarily enhanced federal Child Tax Credit, families spent most of it on essential needs. A stacked bar graph shows that families spent $31 on housing, $28 on food, and $15 on child-specific spending, including books, clothing, child care, and more. Source: National Bureau of Economic Research, June 2023

The expanded federal CTC played a critical role in cutting child poverty rates in half across the nation. This direct correlation highlights that child poverty is a policy choice. Due to discrimination in and barriers to employment, education, and other areas of opportunity, Black and Latino families are more likely to have lower incomes. As a result, Black and Latino children are being harmed most by inaction on key family economic policies.  State lawmakers should choose to establish a Child Tax Credit at the state level for the health and well-being of our children. 

In recent years, state lawmakers have proposed a Commonwealth Kids Credit to provide financial relief to families across the state. Though the proposals vary, the bottom line is the same: Hundreds of thousands of families across the state would benefit. By establishing the Commonwealth Kids Credit, lawmakers would be prioritizing the health and well-being of our children and investing in our future.

Taking Action for the Health and Well-Being of Our Children

Every child deserves the opportunity to thrive and to reach their fullest potential. Unfortunately, when times are tough, families often struggle to maintain their health, perpetuating a cycle that harms both parents and children. Under-resourced communities are significantly more exposed to risks that endanger both physical and mental well-being, with particular long-term impacts on children. The proposed Commonwealth Kids Credit would help remove barriers that stand in the way of Virginia’s children reaching their full potential. That’s because a Commonwealth Kids Credit is more than just a financial break for families — it’s an investment in the health and well-being of Virginia’s communities.

Tsion Tesfaye

tsion@thecommonwealthinstitute.org

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