Federal and Connecticut Financial and Competitiveness Challenges No Labels, CBIA and CT Voices for...

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)

7

% 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

10

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

12

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)

13

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