Prosperity is a Policy Choice
The COVID pandemic and Colorado’s economic recovery may appear to be in the rear view mirror, but an uneven recovery and end to many critical federal supports for working families has left some of our state’s children and families behind.
Our federal and state policy response to the pandemic provides a key lesson for Colorado’s elected officials: poverty is a policy choice. We must choose to continue to use policy tools like refundable tax credits to give families the tools they need to thrive.
In particular, elected leaders can learn from the expansion of the federal Child Tax Credit (CTC) and the historic reduction in child poverty that resulted. The fact that child poverty fell to its lowest level on record in 2021, despite the impact of the pandemic, is a testament to the power of this policy.
We must build our economy from the middle out and the bottom up; low-income and middle class families drive Colorado’s economy, and the government’s job is to provide working families with tools and resources like the CTC to ensure these families have the opportunity to thrive. 
Federal lawmakers have failed to rise to that challenge, and have chosen to let common sense policies like the improvements to the CTC lapse- which is already having real, harmful impacts across Colorado and across the nation. But Colorado has recently implemented its own reforms to ensure this program benefits the families who need it most, and now is the time to hold steady on those commitments.
Child Poverty “Bounced Back” Up after the CTC Expansion Led to a Historic Reduction
In 2022, the overall national poverty rate rose by the largest amount on record in more than 50 years, and national child poverty rates doubled from the year prior, according to new US Census data released in September. Child poverty skyrocketed across the nation from a historic low of 5.2% in 2021 to 12.4% in 2022. This was due almost entirely to the expiration of pandemic policy measures like the CTC enhancements. Congress chose to force 2.1 million kids into the hardship and trauma of living in poverty in America.
Pandemic policies helped ease economic pressures and lift people out of poverty right here in Colorado, and the American Rescue Plan’s expanded Child Tax Credit has been credited in lifting children out of poverty in states across the nation. One new analysis from Brookings found that the CTC caused substantial reductions in poverty in varying state economic contexts; the report found that even high cost of living and low poverty states, such as Colorado, experienced a 40% reduction in child poverty.
The Case in Colorado: Aiming to be the Exception, Not the Rule
Between 2019 and 2021, the number of children in poverty in Colorado climbed by 10,00. However, by 2022, the state was back down to its initial child poverty rate of 11%. Relative to the national trend, Colorado kept its child poverty rate fairly steady over the pandemic. Colorado also managed well through the recovery, avoiding the national trend of a drop and ensuing 2022 spike.
Still, in the richest nation on earth, and a state with a strong economy and an abundance of economic opportunity to be shared, even going back to the status quo is unacceptable. It is unacceptable that in 2022, 133,463 children in our state worry about having a stable roof over their head, or enough food on their table. Moreover, the overall rate of child poverty across the state masks huge disparities.
Persistent inequities in available resources to communities across the state leave children of color behind. Black, Latine, and Native American children and families were 1.5, 2, and 3 times more likely to experience poverty in 2022 than white families in Colorado, with nearly 30% of Native households earning incomes at or under the poverty line last year.
Child poverty rates are also much higher in certain regions in the state. For example, Costilla county’s child poverty rate was 36% in 2022. That is one in three children across the county. Policy choices produce and prolong these discrepancies and hold our state back from reaching its full potential for shared economic growth and thriving communities.
As more recent 2023 data comes in, Colorado may see a spike once again as the federal CTC expansion has sunset.
However, this data may support the claim that Colorado was able to counter the harms of federal inaction to extend the CTC through expanding state-level tax credits like the EITC early in the pandemic and expanding the CTC this past session.
Colorado is on track to be an exception to this concerning national trend, and can continue to be a leader in ensuring prosperity and opportunity for all children by sustaining these critical policies. Prosperity, too, is a policy choice. And we should make the right choice here in Colorado.
