Rate of Success Obtaining Venture Capital is High in Hartford, Study Finds

A look at the nation’s 50 largest metropolitan areas to see how entrepreneurs have fared in their quests to secure money from venture capitalists, angel investors, and online crowds brought a somewhat surprising result – among the cities mentioned as ranking high in venture funding success rates was Hartford. Connecticut’s Capitol was listed among a handful of cities with success rates for businesses seeking venture capital that “are about twice as high as the national average.” According to a new report issued this month by the Kauffman Foundation, roughly $68 billion was invested in venture capital (VC) deals in the United States in 2014 and 7,878 employer businesses reported receiving venture capital funds. Thirty percent of those recipients were located in just four metro areas: New York, Los Angeles, San Francisco, and Boston. The national average was 0.2%.

Among the metro areas that rank highly in terms of those venture funding success rates, according to the report “Trends in Venture Capital, Angel Investing and Crowdfunding,” include: San Francisco, CA (0.8%), San Jose, CA (0.8%), Boston, MA (0.5%), Hartford, CT (0.5%), Memphis, TN (0.4%), Minneapolis, MN (0.4%), Philadelphia, PA, (0.4%), Richmond, VA (0.4%), Washington, D.C. (0.4%). Among the lowest ranked of the 50 largest metropolitan regions in the nation, at 0.1 percent, were Baltimore, Denver, Jacksonville, Las Vegas, Orlando, Riverside, and Tampa.

The report noted that “Some perhaps unlikely metro areas rank highly in terms of those venture funding success rates: Hartford, Memphis, Richmond, and Buffalo. This doesn’t necessarily mean that there are higher quality firms there, and, of course, the volume of firms seeking VC is smaller…And, these data don’t mean that all the funding came from local sources: venture capital firms in New York could be investing in Hartford businesses. But these numbers lend credence to arguments…that high-quality deals can be found everywhere, and that firms in these regions can succeed in raising equity capital.”

While 10.3 percent of entrepreneurs report using personal credit cards when starting their business, nationally, only 0.6 percent initially received venture capital, the analysis found.

The metros with the highest percentage of firms receiving venture capital funding when starting include: San Jose (2.4%), San Francisco (1.5%), Salt Lake City (1.3%), Austin (1.2%), Baltimore (1.1%), Birmingham (1.1%), and Nashville (1.1%).

According to the report, based on the 2014 Annual Survey of Entrepreneurs (ASE), “the primary sources of initial financing for new businesses in the United States are: personal and family savings, bank business loans, and personal credit cards.”  The report notes, however, that “entrepreneurs also tap other sources of funding, including venture capital, which “can be disproportionately important for business growth.”

The ASE, conducted by the U.S. Census Bureau, is the largest annual survey of American entrepreneurs ever done, and is done in a public-private partnership between the Census Bureau, the Kauffman Foundation, and the Minority Business Development Agency. The ASE samples approximately 290,000 employer businesses across all U.S. geographies and demographics, the report explained.

The top metropolitan statistical area for crowdfunding success in 2014 was Charlotte; for angel investing, San Jose led the way.  The report concludes that the concentration of venture capital firms in California, Massachusetts, and New York, “is well-correlated with the relative concentration of firms that receive VC investments.” Crowdfunding campaigns in Minneapolis and Oklahoma City, the report indicates, “may not be entirely due to local funders.”

“The ASE data add quantitative confirmation to what we know from other sources: high-quality entrepreneurs can be found—and can get funding—in nearly every corner of the United States.”

Including Hartford.

CT is Among 24 States Seeing Weak Revenues, Highest Number Since Recession

Connecticut is not alone. According to the National Association of State Budget Officers’ (NASBO) annual state spending survey, half of all states saw revenues come in lower than budgeted in fiscal 2016 and 24 states – including Connecticut - are seeing those weak revenue conditions carry into fiscal 2017. That is the highest number of states falling short of revenue projections since 36 states budgets missed their mark in 2010, according to the NASBO report and Governing.  As a result, 19 states made mid-year budget cuts in 2016, totaling $2.8 billion, Connecticut among them. That number of states “is historically high outside of a recessionary period,” according to the report.  The revenue slowdown is caused mainly by slow income tax growth, even slower sales tax growth and an outright decline in corporate tax revenue, the report explains, stating that “progress since the Great Recession has been uneven, and many states are seeing softening state tax collections.”

Overall, state spending totaled $786 billion last fiscal year, a 3.7 percent annual increase. Although it marks the seventh straight year of spending growth, it represents a slowdown from fiscal 2015 when spending increased by 4.4 percent.

“Weaker-than-anticipated revenue collections and resulting budget gaps in fiscal 2016 led some states to cut spending during the year,” the report indicated, with overall spending increasing just 1.8 percent to $781 billion in fiscal 2016, compared with the previous year’s growth of 5 percent. When accounting for inflation, 32 states are still spending less than they did before the Great Recession and total state spending also has yet to surpass pre-recession levels.  Across the states, cuts enacted by legislatures come most often in K-12 education, an “all other” category, followed by Medicaid, higher education and corrections, according to data compiled for the NASBO report.

The state has an estimated $1.3 billion or $1.5 billion budget deficit, according to reports from the governor’s Office of Policy and Management and the legislature’s nonpartisan Office of Fiscal Analysis, CTNewsJunkie reported recently.

“Certainly a recession is coming sometime soon,” said NASBO President-elect Michael Cohen, who is also California’s finance director, told Governing. “But I think economists in all of the state offices would tell you that’s a really hard economic forecasting [task] of predicting when that’s going to happen.”  NASBO had previously predicted that fiscal 2016 would mark the full recovery of state budgets from the recession, but the cutbacks and increased inflation has delayed that at least another year.

The report indicates that eight (including energy-producing states like Alaska, North Dakota and Oklahoma) planned to spend less in 2017, and 11 states planned to up their spending by 6 percent or more next year. In those states, sales tax increases have improved their revenue with Louisiana, for example, anticipating a 17 percent increase in revenue, driven by an expected $800 million increase in sales tax collections.

Most states have focused on strengthening their rainy day funds, according to the report, though some states – particularly energy-producing ones – have had to tap their reserves to help address budget shortfalls. Twenty-nine states increased their rainy day fund balances in fiscal 2016, and 25 states project increases in fiscal 2017. Since aggregate rainy day fund levels hit a recent low in fiscal 2010, 40 states had increased their amounts as of the end of fiscal 2016, at least in nominal terms, the report said.

“States will also have to contend with rising spending demands in areas such as health care and education, long-term pressures such as pensions and infrastructure, and increasing federal uncertainty,” the report predicted, “particularly concerning the prospects of tax reform and health care policy. In this environment, states are likely to be cautious in their spending and revenue forecasts, as they continue to focus on ensuring structurally balanced budgets.”

https://youtu.be/uAvz-zo9NQw

Public Hearings Conclude; State Spending Cap Commission Seeks Definitions to Impact Spending Decisions

“Stop with the financial games and own up to the problem.”  That was the succinct comment provided to the 24-member state Spending Cap Commission by Darien resident Ken Weil at a public hearing this fall.  Small business owner Justin Higgins, of Orange, added that citizens should “always know where we stand financially without loopholes and political gamesmanship.” The Commission has held 18 meetings, beginning in March and most recently on November 14, as well as five public hearings during the past two months, during which nearly two dozen people filed testimony.  With the state anticipating an estimated $3.1 billion deficit for the next two fiscal years, dollars and sense will be front and center when the legislature, with 30 new members and a dead-even split in the State Senate, convenes in January.

The Commission next meets on Nov. 28, according to CT-N.  Public Act 15-1, December Special Session (Section 24) established the Spending Cap Commission, charged with creating, for the purposes of the state's constitutional general budget expenditures requirements, proposed definitions of (1) "increase in personal income", (2) "increase in inflation", and (3) "general budget expenditures".

What the commission has been asked to address is two decades in the making - definitional questions with fiscal implications that have influenced policy and budget balancing since the passage of the state income tax in the early ‘90’s.  The Director of UConn’s Center for Economic Analysis, Fred Carstensen, said in an article published this month that “the spending cap as designed has been an unmitigated disaster, fiscally and economically.” 

The Commission is chaired by William Cibes, a former state legislator and Secretary of the Office of Policy and Management when the income tax was imposed and state spending cap was approved by voters, and Patricia Widlitz, also a veteran former legislator.  Members include Republicans and Democrats currently serving in the legislature, and others who have extensive experience with state government, in the public or private sector.  It is likely that the incoming state legislature will be looking to the Commission’s findings, as it grapples with the way forward for state finances.

As the public hearings approached in October, the Commission voted to include the following proposed definitions to be addressed:

• “Increase in personal income” means the compound annual growth rate of personal income in the state over the preceding five calendar years, according to United States Bureau of Economic Analysis data
• “Increase in inflation” means the increase in the consumer price index for urban consumers, all items less food and energy, during the preceding calendar year, calculated on a December over December basis, according to United States Bureau of Labor
• The Commission is still considering potential optional language for the third proposed definition – “general budget expenditures” – it is charged with creating. That language may concern, among others, such expenditures as payments for bonds, notes and other evidences of indebtedness, court orders, federal mandates, grants to distressed municipalities, as well as the use of federal funds and monies contained in the budget reserve fund. Proposed language pertaining to these and other additional topics pertaining to general budget expenditures may also be suggested at the public hearing, and considered by the Commission.

Some of the comments received by the Commission, at hearings in Hartford, New Haven, Bridgeport, Willimantic and Waterbury, are quite clear on what the result ought to be done, even if precise wording is not offered:

Louise DiCocco, Assistant Counsel for the Connecticut Business & Industry Association, noted that “24 years ago, more than 80 percent of Connecticut votes overwhelmingly approved a spending cap to keep the cost of state government within the taxpayers’ means to afford it.  Voters demanded the cap as an offset to the persona income tax in Connecticut.  The state must enact a spending cap that is ironclad and works.”

Added the MetroHartford Alliance in testimony by Vice President Patrick McGloin: “Adoption by the legislature of well-crafted spending cap definitions will clearly demonstrate to our fellow residents and private sector employers that we have the political will to be fiscally disciplined.”  DiCocco noted that “the spending cap has always had a safety valve or escape mechanism.  They include bonded debt service, aid to distressed municipalities and first year costs of federal or court ordered mandates.”

The Connecticut affiliate of the National Federation of Independent Businesses pointed out that “reasonably understood, clear definitions of the key terms that will lead to additional budget transparency, predictability and ultimately cap state spending on an annual basis in a way that aptly reflects the will of the voters,” adding that “business owners feel that the legislature absolutely needs to stop allowing excessive spending to be an option and to recognize the ‘new economic reality’, just as small business owners have had to do. Achieving that goal is the most effective economic development policy we could have, and we believe that implementing the constitutional spending cap, and properly defining component terms, would go a long way in this regard.”

Westport resident Tom Lasersohn observed that “In business you learn that for every one customer that complains, there are many you have already lost as customers. For every citizen who gives testimony to this Commission, there are many who are so disgusted with the State’s fiscal mismanagement and chicanery that they will leave at the earliest convenient opportunity. Many outside the State peer in and resolve ‘no, not for me until the State gets its fiscal act together.’ A responsible definition for ‘general fund expenditures’ will communicate to both current and prospective residents and businesses that we are serious about fixing our problems.”

State Senator Toni Boucher of Danbury told the Commission:  “I hope that the commission to adopt a definition of general budget expenditures that is comprehensive and gives a complete and realistic account of all the money that the state spends… it is equally critical that the legislature not be allowed to move what was once an expenditure included under the cap to bonding or fund it with a revenue intercept for the purpose of undermining the cap’s integrity.”

The final form of Commission recommendations remains unclear.  Minutes of the Commission’s most recent scheduled meetings, on October 31 and November 14, have not yet been posted to the Commission’s website, nor has an agenda for the Nov. 28 meeting (as of Nov. 27).

While Boucher is not a member of the Commission, a number of her legislative colleagues are.  The definitions – and the implications for the state’s budget and taxpayers – may soon be theirs to decide.  A decade ago, a UConn report observed that “the spending cap is only as restrictive as the legislative process decides it should be; its strictures are not written in stone.”

UPDATE: 

link to Agenda for Commission's Final Meeting on Nov. 28, 2016 and CTNewsJunkie article reporting on meeting.

link to CT-N video of Commission's Meeting on Nov. 28  at the Legislative Office Building in Hartford; Next meeting scheduled for Dec. 5

First Niagara Transitions to KeyBank This Weekend

For customers of the soon-to-be-history First Niagara Bank, this will be a holiday weekend of banking transition, as KeyBank becomes the new name on the door on Tuesday morning after a host of changes inside. First Niagara branches, converting to KeyBank, will close at 3 p.m. Oct. 7 and reopen for business the morning of Oct. 11, the day after Columbus Day. The company promises a smooth transition, and has been providing customers of the bank’s more than 60 branches in Connecticut with step by-step previews of what to expect. The changes represent the completion of the $4.1 billion KeyCorp purchase of First Niagara.

“As KeyBank and First Niagara come together you can continue to bank as you currently do, using your same account number, checks, debit card, ATM card, credit card, telephone banking, online access and branches,” the company website points out.

First Niagara has 65 branches in Connecticut that will be transitioned to KeyBank branches. There were no existing KeyBank branches in the state prior to the merger, so there was no overlap that required branch closings, as is often the case with bank mergers.

Headquartered in Cleveland, KeyBank’s footprint includes 15 states via a network of more than 1,200 branches and more than 1,500 KeyBank ATMs. The company’s roots trace back 190 years to Albany, New York. Since then, KeyCorp has grown into one of the nation's largest bank-based financial services companies, among the top 15, with assets of approximately $135 billion, according to the company.

In recent months, First Niagara did consolidate five Connecticut branches (Woodstock, Dayville, Hamden, East Haven and Madison), and all of the employees who worked at those branches were offered positions within the bank, officials indicated, and no layoffs were associated with that consolidation.

"By asset size, this is the largest bank merger since the financial crisis,” Beth E. Mooney, Key’s chairwoman and CEO, told the Buffalo News last month, during a visit to Key’s Northeast regional headquarters in Buffalo, which had been First Niagara’s corporate headquarters.

“So there is a significance and an importance for us to do it well that’s critical for our communities, our clients, our employees and our shareholders. But from an industry perspective, this is actually one that there’s a fair amount of eyes on us, as well.”

The conversion of First Niagara accounts and services to KeyBank will begin at with a 3 p.m. close of business on Friday, October 7.  Due to Online Banking updates, customer balances that appears online on Thursday, October 6 at 11:59 p.m. will not change until Saturday, October 8, at 6 a.m., so any purchases or deposits made during that time will not be reflected on online balances until Saturday. Customers can continue to use current First Niagara ATM/debit card, account numbers and PINs will not change.

The acquisition of First Niagara by Keycorp was announced on Oct. 30, 2015, and includes the addition of approximately 300 First Niagara branches in New York, Pennsylvania, Connecticut and Massachusetts.  First Niagara had entered the Connecticut market in 2011 with the purchase of New Alliance Bank.

Connecticut Public Accounting Firms Reach National Rankings

The largest Connecticut-based public accounting firm, BlumShapiro, earned the #54 position in the nation’s top 100, according to the publication Inside Public Accounting.  It is one of a handful of Connecticut firms to make the annual top 300 list, in addition to regional firms with offices in Connecticut. BlumShapiro is the largest regional business advisory firm based in New England providing accounting, tax and business consulting services. The firm serves clients from six offices offices in Connecticut (West Hartford and Shelton), Massachusetts and Rhode Island. BlumShapiro ranked #53 last year. 

Noted among the nation’s top 200 public accounting firms is Hartford headquartered Whittlesey & Hadley.  The firm, ranked at #155 this year, up from #178 a year ago, and #192 in 2014, has two additional offices, located in Hamden, CT and Holyoke, MA. The firm provides a comprehensive array of accounting, auditing, tax, and advisory services to a broad range of businesses and individuals.

Ranked #285 is Reynolds & Rowella LLP, which maintains offices in Ridgefield and New Canaan.  “We are proud to be counted among the top-ranked accounting firms nationwide on a list that includes Deloitte, PwC, Ernst & Young and KPMG,” Frank Rowella, Reynolds & Rowella’s managing partner, told the Fairfield County Business Journal. “The IPA list is known as one of the most thorough and accurate sets of rankings in the accounting profession. Our inclusion reflects our determination to provide the very best quality compliance and financial services solutions to our valued clients.”

At #296 is Glastonbury-based Fiondella Milone & LaSaracina.  FML was founded in 2002 “for the purpose of providing professional auditing, tax and business consulting services to a wide range of clients and industries throughout the Northeast,” the company’s website indicates.  After working together at Ernst & Young, the firm’s founding partners, Jeff Fiondella, Frank Milone and Lisa LaSaracina launched FML.

Inside Public Accounting (IPA), founded in 1987, is published by The Platt Group. The Platt Group publishes both the award-winning Inside Public Accounting newsletter and the award-winning National Benchmarking Report.

Beginning in 1994, INSIDE Public Accounting’s Survey and Analysis of Firms and the resulting national benchmarking report on the nation’s largest accounting firms has served as a barometer of the overall health, challenges and opportunities of the profession, according to the publication.

Annually more than 500 accounting firms across the North America complete the in-depth financial and operational survey. The data is then used to compile the annual ranking of the nation’s largest accounting firms, which is unveiled in August of each year. The annual IPA rankings are considered to be among the longest-running, most accurate and up-to-date for the nation’s largest accounting firms.

Leading the list nationally were Deloitte, PricewaterhouseCopers, Ernst & Young, KPMG, RSM, and Grant Thornton.  Ranked at #11 is New York based CohnReznick, which has offices in Hartford.  Marcum LLP ranked #16, Citrin Cooperman & Company, also based in New York and ranked #21, has offices in Fairfield County.

Financial Capital Remains Hurdle for Women Entrepreneurs

“Data reveal that an increasing number of women are choosing entrepreneurship as a career path, and of those, a growing number of them share aspirations for growth.”  That fact, pointed out in the preface of a new book co-written by a local university professor, is the proverbial tip of the iceberg. According to the U.S. Census Bureau, there are roughly 9.9 million women-owned firms in the United States, representing over a third of all firms in the country—and the ranks of new enterprises with women at the helm are growing rapidly. Between 2007 and 2012, women-owned firms in the U.S. grew by 27 percent compared to a growth rate of 2 percent for firms overall.

“But in spite of their impressive growth in numbers,” writes University of Hartford finance professor Susan Coleman, “the business ventures women are launching today continue to lag behind those launched by men in terms of revenues and employment. So while an increasing number of women can count themselves as entrepreneurs, many appear to be running into barriers, as the vast majority of their businesses remain quite small.”

Coleman, along with Alicia M. Robb, have co-authored The Next Wave: Financing Women’s Growth-Oriented Firms (published by Stanford University Press), which points to “three essential factors that women entrepreneurs need to thrive: knowledge, networks, and investors. In tandem, these three ingredients connect and empower emerging entrepreneurs with those who have succeeded in growing their firms while also realizing the financial and economic returns that come with doing so.”

Robb is Senior Fellow with the Ewing Marion Kauffman Foundation and Visiting Scholar at the University of California, Berkeley and the University of Colorado, Boulder. She previously worked with the Office of Economic Research in the Small Business Administration and the Federal Reserve Board of Governors. Coleman is Professor of Finance and Ansley Chair at the Barney School of Business at the University of Hartford.

Coleman notes that “A crucial pitfall is that women face unique challenges in their attempts to acquire financial capital. Growth-oriented firms typically require substantial investment—both in the form of bank loans and external equity in the form of angel or venture capital funding—to scale up.” Studies reveal, however, that “women entrepreneurs raise significantly smaller amounts of capital than men and face continued barriers in their attempts to secure external equity in particular,” Coleman points out.

In the book’s forward, the authors explain that the motives behind women-run entrepreneurial businesses vary.  “Some of these growth-oriented entrepreneurs are motivated by a desire to pursue an opportunity or an unmet need in the marketplace.  Others are frustrated by the constraints imposed by a ‘glass ceiling’ that prevents them from reaching the most senior ranks of corporations.  Still others are drawn by the financial and economic rewards that can come from leading a firm that achieves scale.”

According to IRS data, women represent over 40 percent of top wealth holders in the United States, yet estimates from the University of New Hampshire’s Center for Venture Research indicate that they represented only 25 percent of angel investors in 2015, Coleman notes.

Optimistic about the future success of women entrepreneurs, Coleman and Robb observe that “Successful women entrepreneurs who are paying it forward in a variety of ways are a driving force” in what they describe as the “next wave.”

“In a virtuous cycle, women entrepreneurs evolve from being the recipients of human, social, and financial capital into becoming the providers of those key resources as their firms grow and create economic value. The more successful women at the helm of businesses that kick off cash, the more women there are to invest in others, and the faster we see the number of women grow in the ranks of larger businesses and investing.”

In addition to appreciation expressed to the Kansas City-based Kauffman Foundation for financial support, the book’s acknowledgements note that the Barney School of Business and the University of Hartford’s Women’s Education and Leadership Fund provided grants that helped support initial research and development of case studies on women entrepreneurs. The authors also expressed appreciation to three University of Hartford graduate assistants – Ece Karhan, Mert Karhan, and Isha Sen – who “played an invaluable role in the book’s development.”

Student Loans Grow; Home Ownership Pushed Back 5 Years, on Average

An analysis on the cost of student loans and home-buying nationwide finds that it takes graduates with the average student loan debt of $28,950 about 5 years longer to save a 20 percent home down payment. Thereafter, these graduates have almost $50,000 less in home equity 15 years after graduation compared to debt-free graduates, according to an analysis by GoodCall, The Real Cost of Student Loans. In Connecticut, where 62 percent of students graduate with debt averaging $29,750, above the national average, and home prices tend to be higher than in most states, the challenge is particularly acute.  Delaware has the highest average student loan balances, at $33,808. Utah has the lowest, with $18,921, according to data compiled by the Institute for College Access & Success and included in the report.

Nationally, average debt for new bachelor’s degree recipients rose at more than double the rate of inflation from 2004 to 2014, but in some states it grew even faster.  In Connecticut, the percentage of graduating students with debt rose from 57 percent in 2004 to 62 percent in 2014; the average amount of debt increased by 57 percent (20^th highest increase among the states), from $18,906 to $29,750.

Homeownership has generally fallen over the past decade, and for college graduates with student loan debt, the downward trend is even more marked, according to research by the Federal Reserve Bank of New York, the report indicates. What is clear, the report notes, is that after college, graduates with student debt must use part of their income to pay down loans. This means less income is available for saving compared to debt-free graduates.

It also means that graduates with student loan debt will have to save at a higher rate than their debt-free counterparts to buy a home sooner. This points to another challenge student loan borrowers face: making tough decisions over whether to pay student loans off as quickly as possible or save for big purchases like a home, the report explains.

Waiting longer to buy a home can mean missing out on accruing home equity, an important part of building wealth and financial security over the long term. Home equity is how much of the home’s current value is owned by the homeowner. This is calculated by taking the current market value, which typically grows year over year, and subtracting any remaining mortgage payments.

A recent Harvard study noted in the report revealed the consequences for wealth building that these financial decisions can have over the long-term, where college-educated households with student loan debt were found to have significantly less in assets, cash savings, and net wealth compared to college-educated households without student loans.

Among the report’s key findings regarding the home buying timeline:

• A 23-year-old debt-free college graduate today will be ready to buy a home with a 20 percent down payment in 2021 at age 28. That’s five years earlier than the 33-year-old average home buyer today.
• Graduates with $12,000 in student loan debt can expect to save until 2022 before they’re able to put a 20% down payment on a median price home.
• A 23-year-old graduate with $28,950 in student loan debt today will be saving until 2026 before she can make a 20% down payment on a home, at age 33 – the current average age for home buying.
• Graduates with $50,000 in student loans will be saving until age 36 in 2029 before they’ll have enough for a 20 percent home down payment.

The report also highlights the impact of student loans on the age at which people decide to get married, their job choices, starting salaries and retirement savings – and the impact those choices have on their ability to pay off student loans.

Add a Teen Driver to Policy? Rates Double in CT, 8th Highest Increase in Nation

Adding a teen driver to the family automobile insurance policy drives up rates.  That’s true everywhere across the United States, and in Connecticut the increase is among the highest in the nation, almost doubling the policy's premium. A new survey reveals that the average premium increase in Connecticut when adding a teen driver to an existing policy is 96.3 percent, which is the 8^th highest increase in the U.S.  The only states with higher jumps in premiums are New Hampshire, Rhode Island, Arizona, Wyoming, Ohio, Oregon and Maine.

The study, by insuranceQuotes, found that the average increase in premiums across the country when a teen driver is added to an existing policy is 79 percent.  That is a slight improvement from a few years ago, when the increase nationwide averaged 84 percent.

The study also found that it costs more to add a young male driver than a female driver to an existing policy - adding a male teen to a married couple's policy results in a national average premium increase of 91 percent, compared to an increase of 67 percent for a female.  The difference is wider the younger the driver.  For 16 year old male driver is added, for example, the premium cost more than doubles on an existing policy.

Connecticut has consistently been ranked in the top ten, with among the highest increases when a teenage driver is added to an existing policy.  A year ago, Connecticut was ranked 7^th, with a 98.3 percent increase in insurance rates after adding a teen driver.  The previous year, Connecticut ranked 5^th in the annual survey, with an increase of 102.4 percent in the policy cost when a teen driver was added.

According to the data, the largest increases in Connecticut were in New Haven County, more than 11 percent higher than the statewide average.  Tolland, Windham, Middlesex and New London counties were slightly lower than the statewide average; Hartford and Fairfield counties slightly higher.

Laura Adams, senior insurance analyst at insuranceQuotes stressed that states differ considerably when it comes to the cost of insuring a teenage driver – noting that a teen added to a married adult's auto policy in New Hampshire results in an average annual premium increase of 125 percent, while in Hawaii the average increase is just 17 percent.  New Hampshire had the highest increase in each of the past three years.

"Insurance companies have pretty wide lattitude in many states in the reasons for raising rates, and in some states adding a teen really moves the needle," Adams told CT by the Numbers.  As for Connecticut, Adams said she doesn't see any reprieve anytime soon.  "Teen drivers are among the riskiest, and companies take advantage of the opportunity to raise rates."

Perhaps the most significant underlying factor is that each state regulates insurance differently, and those regulatory differences account for some of the variations in the study’s findings, according to insuranceQuotes.  For instance, Hawaii is the only state that doesn't allow insurance providers to consider age, gender or length of driving experience when determining premiums. That means that the cost for teens doesn't differ much from the cost for adults buying auto insurance.  This may also account for lower increases in states such as New York, Michigan and North Carolina, where insurance is regulated more strictly and rating factors are more stringent, insuranceQuotes points out.   The increases in those states when adding a teen to an existing policy were all below 60 percent, among the lowest increases in the nation.

Adams noted that people often notice the difference in rates when they move to another state.  "You are penalized for where you live.  States handle this very differently."

She added that "regardless of the costs to insure your teen driver, safety is the No. 1 priority. We suggest parents educate teens on the dangers of driving, especially when it comes to texting while driving, or driving under the influence.”

Kathy Bernstein, senior manager of the National Safety Council's Teen Driving Initiatives, told insuranceQuotes that the riskiness of teens behind the wheel may be "leveling off."  For instance, in 1978 there were nearly 10,000 teen driver deaths, according to the Insurance Institute for Highway Safety (IIHS). That number has dropped every year since then. In 2014, the number of teen driver deaths was about 2,600.  The percentage of teens on the road has steadily declined as well. According to a recent study from the University of Michigan, 69 percent of 17-year-old Americans had a license 30 years ago. Now, less than half have a license - 45 percent.

Adams indicated that as teen drivers get older and gain driving experience, rates tend to come down, unless, of course, they happen to have an accident in which they are at fault.  In those instances, "very high rates" result.

For the annual study, insuranceQuotes and Quadrant Information Services examined the economic impact of adding a driver between the ages of 16 and 19 to a family's existing car insurance policy.  The insuranceQuotes website provides consumers with a free, easy way to compare insurance quotes online for auto, home, health, life and business policies.

Most Valuable States in America: Connecticut Ranks #3

A recent study estimates that the combined value of all land in the contiguous United States is worth nearly $23 trillion. The most valuable state, according to the survey, is California, which accounted for 17 percent of the total value of the 48 bordering states. New Jersey, however, had the most valuable real estate relative to its size, estimated at $196,400 per acre, or 16 times the average value per acre across the contiguous U.S. Connecticut ranked third overall.  Although the third smallest state in the country, containing just over 3 million acres, Connecticut is also one of just four states where land is valued at over $100,000 per acre on average. By contrast, the estimated value of an average acre across the country is just over $12,000.

The study, authored by William Larson, senior economist at the Federal Housing Finance Agency and previously at the Bureau of Economic Analysis, estimated the value of different property types, including agricultural areas, federal land, and developed suburban and urban areas.  The study is featured on the website 24/7 Wall St.

States with generally larger rural areas tended to have a lower value relative to their size, while more densely populated states that contain large urban centers had the highest estimated worth per acre. The value of Connecticut’s land is reflected in the higher cost of a house in the state. The typical house is worth $267,200, compared to a national median home value of $181,200, according to the analysis.

Key data for Connecticut includes:

• Value of land per acre: $128,824
• Total value: $400 billion (18th highest)
• Total acres: 3.1 million (3rd lowest)
• Percent land mass rural: 62.3% (4th lowest)

The top 10 “most valuable” states:  New Jersey, Rhode Island, Connecticut, Massachusetts, Maryland, Delaware, New York, California, Ohio, and Pennsylvania.  Next are Florida, Michigan, Illinois, Virginia, New Hampshire, South Carolina, Indiana, Washington, North Carolina and Tennessee.

The analysis points out that the type of land in a given area has a significant impact on its worth. Agricultural and other largely undeveloped areas are generally worth significantly less than cities and suburbs land.  Developed land, or land where housing, roads, and other structures are located, is valued at an estimated $106,000 per acre, while undeveloped land was estimated at $6,500 per acre, and farmland at only $2,000 per acre, according to the analysis.

That said, the analysis notes that it is not surprising that most of the states with the highest per acre land values are predominantly urban, such as New Jersey, Rhode Island, Connecticut, and Massachusetts. These Northeastern states are smaller and have less rural acreage “to bring the average value down.”  The data reflects that the six most valuable states were also among the 10 smallest states by landmass. In New Jersey, for example, 39.7 percent of the area is considered urban, compared to a national urban share of just 3 percent.

The entirety of Delaware is worth just $72 billion, the second smallest total value compared to the other states in the lower 48, the analysis notes. On a per acre basis, however, the state is valued at $57,692 on average, the sixth highest in the country. Just behind Delaware is New York, with more than 30 million acres worth $41,314 each, on average. In total, the Empire State’s acreage is worth $1.25 trillion, based on the analysis. Because of the large rural areas in the state, the analysis explains, less than 10 percent of New York’s total area is considered developed. However, that developed property is so valuable it accounts for roughly two-thirds of the state’s total value.

All 10 of the states with the largest proportions of federally-owned land are west of Kansas, reflecting the way in large swaths of that land entered the United States at various junctures in U.S. history.   The Louisiana Purchase and the conclusion of the Mexican-American War left considerable areas across the western United States in the hands of the federal government.

While less than 25 percent of all land in the lower 48 states is owned by the federal government, in Nevada, as one prime example, the third least valuable state by acre, 86.8 percent is federal, the highest share in the country.  As a result, western states with a lot of federal land tend to have lower average values per acre. More than 30 percent of land in nine of the 15 “least valuable” states was federally-owned as of 2009.

Six State Commissions, Victims of Budget Consolidations, Disappear After Decades-Long Record of Achievement

After 43 years, the ironically-named Permanent Commission on the Status of Women began the organization’s final newsletter with an ironic observation:  “the PCSW had its most successful legislative session ever, celebrating the passage of four bills instrumental in protecting women's health and safety.” The PCSW is one of six legislative commissions eliminated in a last-minute budget compromise at the end of the legislative session a month ago.  The six ceased to exist on Thursday (June 9).  In their place will be two Commissions, each a mash-up of three of the organizations.

Wiped from the roster of state agencies are the PCSW, Legislative Commission on Aging, Commission on Children, Latino and Puerto Rican Affairs Commission, African American Affairs Commission and Asian Pacific American Affairs Commission.  Replacing them will be the Commission on Women, Children and Seniors and a Commission that merges the Latino, African-American and Asian Pacific American Commissions.

All staff members were effectively laid off, some applied for the handful of jobs that are to exist in support of the new Commissions.  The volunteer Commissioners will be holdovers, meaning that 63 Commissions will remain in place to set policy direction.

The 23 year old Commission on Aging was eliminated as Connecticut rapidly approaches a new, long-term reality—older adults will comprise an increasingly large proportion of the population.  At least 20 percent of almost every town’s population in the state will be 65 years of age or older by 2025, with some towns exceeding 40 percent.  Already, Connecticut is the 7^th oldest state in the nation.

The Asian Pacific American Affairs Commission, the most recent of the six, was established in 2008 to respond to a growing population in Connecticut.  With the smallest budget, the agency struggled to gain traction, and was just beginning to fulfill its mission when the end arrived.  Connecticut's Asian American population grew from 95,368 in 2000 to 157,088 in 2010 – a 65% increase. Asians represent the majority minority in 40 percent of Connecticut school districts, according to the Commission. 

The Permanent Commission on the Status of Women was formed in 1973 to study and improve Connecticut women’s economic security, health and safety; to promote consideration of qualified women to leadership positions; and to work toward the elimination of gender discrimination.

Over the next four decades, the organization played a pivotal role in the passage of more than 50 significant pieces of legislation, often placing Connecticut at the forefront of progress towards greater justice or equal treatment for women.

That was certainly true in 2016, in what turned out to be, as was once said in a different context, the best of times and the worst of times.  This year, PCSW advocated for major initiatives that gained legislative approval:

• Allow judges to remove firearms during temporary restraining orders in domestic violence;
• Make affirmative consent the standard for investigating alleged campus sexual assaults;
• Establish a working group to study possible labor violations in the nail salon industry;
• Eliminate the discriminatory tax on feminine hygiene products and diapers;
• Dramatically strengthen anti-trafficking laws by: shifting the focus of arrests in prostitution cases to the "demand side"; raising penalties against buyers of sex; removing the "mistake of age" defense; and requiring hotels and motels to keep records of those who rent rooms by the hour; and
• Give judges authority to remove parental rights from rapists in cases of clear and convincing evidence of sexual assault resulting in pregnancy.

Established in 1997, the mission of the African-American Affairs Commission (AAAC) was to improve and promote the economic development, education, health and political well-being of the African-American community in the State of Connecticut.  The Commission has been at the forefront of a range of issues impacting the African American community in Connecticut, and its demise occurs when race relations and equal opportunity remain under heavy scrutiny in Connecticut and across the country.   

Glenn A. Cassis Executive Director of the African-American Affairs Commission, when the consolidation plan was announced, said merging the panels will cause "irreparable damage to the African-American community in Connecticut."

"The elimination of AAAC tells the African-American community that their issues are not important to the state,'' Cassis wrote in an open letter to the leaders of the General Assembly. "The message that resonates is that despite the successful efforts of the past to eliminate the disparities that exist for this constituency in education, health, economic development, criminal justice and incarceration, and social well-being have become marginalized. Years of progress made has been cut short from being fully impacted to the level that this growing segment of Connecticut’s population deserves and expects."

The Latino and Puerto Rican Affairs Commission (LPRAC) was created by an act of the Connecticut General Assembly (CGA) in 1994. This 21 member non-partisan commission is mandated to make recommendations to the CGA and the Governor for new or enhanced policies that will foster progress in achieving health, safety, educational success, economic self-sufficiency, and end discrimination in Connecticut.  As of 2014, the state’s Hispanic population exceeded 500,000, about 15 percent of the state’s overall population.

In an Open Letter, LPRAC Executive Director Werner Oyanadel said “The decision to eliminate LRPAC does not in any way diminish the significant pride of the Commissioners and LPRAC staff, present and past, in the far-reaching and often ground-breaking work that has been accomplished to advance the quality of life for our state’s steadily growing Latino population.”  He added that “the end of a distinguished and impactful decades-long history does not diminish or eviscerate the landmark laws, policy-changing research and enduring impact of LPRAC on countless families, businesses and individuals of Hispanic heritage, and all the citizens of Connecticut.”

The Commission on Children, established in 1985, was borne of the legislature’s desire for the development of “policies that would ensure the health, safety, and education of Connecticut children.”  Said long-time Executive Director Elaine Zimmerman: “We feel we’ve succeeded beyond anyone’s wildest hopes, taking a leading role in issues as important—and diverse—as closing the achievement gap in reading, school climate, immunization, disaster planning for families, school readiness, children’s mental health, home visitation, youth employment, equity, and poverty reduction.”

One of the testimonials on the PCSW website, said succinctly: “The commission boldly tackles the issues that matter to my survival and prosperity! Their work to identify and eradicate inequality (whether of the deliberate kind or not), to serve as a public voice for women’s issues which are underrepresented in all public spheres, and to engage the public is integral in working toward a fair and just society.”

Regarding the state’s Latino population, Oyanadel said “the successor combined Commission will not be nearly the same; we can only hope that its impact will not be diluted or weakened, though we are concerned that our community will have a softer voice advocating for those issues of particular importance in and impact on the Latino community.”

Back in 2011, when consolidations and eliminations were under consideration by legislators, but ultimately not approved, as was the case repeatedly since the 2008 recession, Gov. Malloy told the CT Mirror: "If they asked my advice, I'd consolidate a bunch of them."

And in 2016, it came to pass.