federal and connecticut financial and competitiveness challenges no labels, cbia and ct voices for...
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Federal and Connecticut Financial and Competitiveness Challenges
No Labels, CBIA and CT Voices for ChildrenMake Government Work Forum
Hartford, CTNovember 22, 2013
Hon. David M. WalkerNational Co-Founder of No Labels and
Former Comptroller General of the United States
2
The Federal Government has Grown Dramatically
2%
Federal Spending$16 Billion in 2012 Dollars
1912
Source: Historical Statistics of the United States, Millennial Edition On Line, Cambridge 2006; Congressional Budget Office, Long-Term Budget Outlook, June 2012. Compiled by TCAII
3
We’ve Lost Control of the Budget
3% 97%
Controlled Yearly
1912
64%36%
Auto Pilot
2012Source: Historical Statistics of the United States, Millennial Edition On Line, Table Ea636–643 Federal government expenditure, by major function: 1789–1970. Congressional Budget Office, The Budget and Economic Outlook: fiscal Years 2013 to 2023, Feb. 2013. Compiled by TCAII.
4
U.S. Federal Government Debt Historical and Projected
1790 1801 1812 1823 1834 1845 1856 1867 1878 1889 1900 1911 1922 1933 1944 1955 1966 1977 1988 1999 2010 2021 2032 20430%
50%
100%
150%
200%
250%
300%
Public Debt Extended Baseline - GAO Alternative Scenario - GAOP
ubli
c D
ebt %
of G
DP
Source: CBO, 2013; GAO, 2013
5
Comparative Government Debt Burdens as a % of GDP (2012)
Germany Spain France United Kingdom
United States Portugal Italy Greece0%
20%
40%
60%
80%
100%
120%
140%
160%
82.0% 84.1%90.3% 90.3%
106.5%
123.0% 127.0%
158.5%
0.306
Gen
eral
Gov
ern
men
t G
ross
Deb
t as
a P
erce
nta
ge o
f G
DP
Source: IMF, World Economic Outlook, April 2013; U.S. Treasury, Debt to the Penny. Compiled by TCAII. Note: Additional data with dotted line represents intra-governmental holdings for the United States. All figures for 2012.
Total U.S. Debt137.1%
6
Federal Financial Sink Hole
2000 2012$0
$10
$20
$30
$40
$50
$60
$70
$80
$6.9
$18.8$0.5
$2.4
$3.8
$11.3
$9.2
$37.2
Explicit Liabilities Commitments & Contingencies Social Security Medicare
Tri
llion
s of
Pre
sen
t V
alu
e D
olla
rs
SOURCE: Data from the Department of Treasury, 2012 Financial Report of the United States Government. Compiled by TCAII.Note: Actuary’s alternative estimates are used for 2012 Medicare projected benefits cost.
$69.7 Trillion(Your Share $221,400)
$20.4 Trillion(Your Share $72,500)
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% Saying Deficit is a Top Priority
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 201320%
30%
40%
50%
60%
70%
80%
90%
Republican Democrat Independent Overall
Source: Pew Research, 2013
8
Congressional District Polarization
2012
2000
1992
0 50 100 150 200 250 300 350 400
35
61
103
Landslide Dem. Lean/Strong Dem. Swing Lean/Strong Rep. Landslide Rep.
Source: Nate Silver, 2012
9
Congressional Favorably
1990
1991
1994
1995
1995
1996
1997
1997
1997
1998
1999
1999
2001
2005
2006
2007
2009
2009
2011
2012
2012
0
10
20
30
40
50
60
70
80
Favorable Unfavorable
Source: Pew Research, 2013
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Source: 2012, Institute for Truth in AccountingNumbers in red denote burden per taxpayer, Numbers in black denote a surplus per taxpayer
Taxpayer’s Burden by State 2012
1.Alaska $ 45,0002.Wyoming $ 23,5003.North Dakota $ 16,1004.Utah $ 2,5005.Nebraska $ 2,0006.South Dakota $ 1,7007.Tennessee $ 300 8.Iowa $ 100 9.Montana $ 1,000
10.Oregon $ 1,300 11.Idaho $ 1,700 12.Florida $ 2,500 13.Arizona $ 3,000 14.Minnesota $ 3,000 15.Arkansas $ 3,000 16.Colorado $ 3,100 17.Nevada $ 3,100
18. Virginia $ 3,400 19. Indiana $ 3,500 20. Missouri $ 4,600 21. Wisconsin $ 4,800 22. Kansas $ 5,200 23. Georgia $ 5,300 24. Texas $ 7,400 25. Ohio $ 7,400 26. Oklahoma $ 7,600 27. South Carolina $ 7,800 28. Washington $ 7,900 29. New Hampshire $ 9,000 30. Mississippi $ 10,400 31. Maine $ 11,500 32. Alabama $ 12,100 33. North Carolina $ 12,600 34. Pennsylvania $ 13,300
35.New Mexico $ 13,600 36.Rhode Island $ 14,000 37.Vermont $ 14,500 38.Louisiana $ 14,600 39.Maryland $ 14,800 40.Delaware $ 17,700 41.West Virginia $ 18,600 42.New York $ 19,800 43.California $ 23,500 44.Michigan $ 23,600 45.Massachusetts $ 25,500 46.Kentucky $ 26,700 47.New Jersey $ 34,200 48.Hawaii $ 39,900 49.Illinois $ 42,000 50.Connecticut $ 46,000
Total Unfunded LiabilitiesPer Taxpayer with Tax Liability
CT MA NY NJ RI PA VA NC IL FL TX$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
Bonded Debt per Taxpayer OPEB per Taxpayer Pension per Taxpayer
Total $37,693
Total $8,810
Total $6,458
Total $22,728
Total $14,734
Total $11,152
Total $8,815
Total $14,680
Total $36,480
Total $20,081
Total $25,535
Source: CCEA
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Change in Non-Farm Payroll 1990 - 2013
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 201380%
90%
100%
110%
120%
130%
140%
Connecticut United States
Source: BLS (Base Year 1990)
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Select States Overall Ranking
Texas 1
Virginia 3
North Carolina 4
Massachusetts 28
Florida 29
New York 34
New Jersey 41
Connecticut 44
Rhode Island 50
State Competitiveness
Source: CNBC, America’s Top States for Business 2012. Compiled by TCAII. Note: Categories include: Cost of Business, Workforce, Quality of Life, Economy, Infrastructure and Transportation, Education, Business Friendliness, Access to Capital, and Cost of Living.
14
2010 Education Levels – Residents 25 and Older, by Tiered Levels of Poverty
Source: Meeting the Challenge-The Dynamics of Poverty in Connecticut, CAFCA, CCEA, BWB Solutions
15
Effective Property Tax Rates Across Connecticut
0%
1%
2%
3%
4%
5%
6%
BridgeportEast Hartford
Hartford
New Haven
Salisbury
Waterbury
Eff
ecti
ve P
rope
rty
Tax
In
CT
Source: Connecticut Office of Policy and Management
16
• Pass a budget
• Focus on debt/GDP
• Address both short-term investment and structural challenges
• Reform social insurance programs, address health care promises and costs, engage in comprehensive tax reform, and move beyond sequester approaches
• Address key infrastructure, energy, education, immigration, R+D and other competitiveness challenges
A Way Forward – Selected Federal Actions
17
• Honor the Constitution
• Comprehensive tax and regulatory reform
• Restructure retirement plans
• Address key infrastructure, energy, education and other competitiveness challenges
• Improve governance practices
A Way Forward – Selected Connecticut Actions