Independent Analysis Sought for State's Economic Incentive Programs

Timing is everything.  Just days after the Yankee Institute for Public Policy reported that a federal grand jury has indicted a former Vernon resident for using a fake pita company to fraudulently obtain $3 million, including $400,000 from the State of Connecticut, the state legislature held a public hearing on a proposal designed to enhance Connecticut’s analysis of the efficiency and effectiveness of the state’s economic development investments. State Comptroller Kevin Lembo, joined by a broad coalition of open government advocates, testified in support of the legislation.  “Connecticut can and should be one of the most economically competitive states in the nation – but that can only happen if we adopt best practice in how we analyze the success and failures of our economic development programs,” Lembo said.

“The state provides hundreds of millions of dollars in economic incentive programs to Connecticut businesses every year for the purpose of advancing economic development and job creation,” Lembo said. “The state owes it to businesses and all taxpayers to fully analyze the return on investment that these sizable and important programs actually deliver in order to assess whether such resources are fulfilling their intended purpose or, if not, whether state funds would be better deployed to other economic development or infrastructure investments.

The proposal, House Bill 7316, would improve how Connecticut analyzes the success and failures of its economic development investments in several ways, according to the Comptroller’s Office. It will streamline the reporting requirements, while expanding the scope of reporting to include all business assistance and incentive programs. It will subject business assistance and incentive programs to performance reviews by the Auditors of Public Accounts and require the Auditors to review the analysis and reporting performed by DECD on such programs – providing necessary independent oversight.

Lembo pointed out that “Connecticut is now one of only two states in the nation where the success of economic development programs is analyzed by the same agency that administers the programs. An unbiased assessment of the performance and administration of these programs has in other states resulted in opportunities for savings.

The Comptroller noted that his office has worked with both the Auditors of Public Accounts and the Department of Economic and Community Development, to “come to mutual agreement on the bill’s language.” The legislation would also require specific legislative committees to hold public hearings to discuss the results of the evaluations and receive input from stakeholders.

The Yankee Institute report indicated that the state’s Small Business Express program, which offer grants and loans to small businesses, awarded the now-indicted former resident a $300,000 loan and a $100,000 grant in 2012.  The report said that the state funding was meant to retain 11 jobs and hire 25 more people.

A broad coalition of open government advocates and organizations submitted testimony in support of the legislation.

On behalf of The Pew Charitable Trusts, Robert Zahradnik, Director of Policy, State Fiscal Health, said, “In Connecticut, as in many other states, business incentives are both a primary economic development tool and a major budget commitment. For that reason, The Pew Charitable Trusts’ research shows that studying the results of incentives is a vital step for states to create jobs, raise wages, help businesses to grow, and to maintain a balanced budget.”

Derek Thomas, Fiscal Policy Fellow at Connecticut Voices for Children, said, “Unlike general fund spending on education, roads, and other spending on the building blocks to a healthy economy, business tax breaks lack transparency. Once on the books, they can remain for years, or even decades, without scrutiny. A more efficient, transparent, and fair budget process would include regular reviews of all economic development incentives to ensure that tax expenditures are yielding the promised economic development benefits. Just like spending, business tax breaks should undergo regular scrutiny to determine their effectiveness.”

The Small Business Express program, which gives grants and loans to smaller to medium sized businesses, has “assisted 1,687 companies — ranging from 'mom and pop' stores to advanced manufacturing firms — with $267 million in loans and grants to retain 18,671 and create 6,795 jobs,” according to the DECD 2016 Annual Report.  In 2016, there were 194 businesses receiving assistance in exchange for commitments to retain 2,912 jobs and create an additional 931.  Total funding commitments were $35,408, 428 in grants and loans.  A year ago, DECD celebrated the 1,500th company to take part in “the governor’s keystone small business development program, the Small Business Express program,” the DECD report indicated.

Joe Horvath, Assistant Policy Director at Yankee Institute for Public Policy, said, "Good economic policy is broad-based and does not favor single businesses, or even industries. This bill would help provide state officials with critical information in determining which economic development programs fail to provide the returns promised, an important step to ending waste and cronyism in Connecticut." Added Daniel J. Klau, President of the Connecticut Council of Freedom on Information (CCFOI):  “CCFOI is very pleased to support this legislation that enhances public confidence in the effectiveness of economic development investments.”

The streamlined report will focus on the most pertinent information, Lembo said, including economic impact of each program, the extent to which it is meeting statutory and programmatic goals, and the efficiency with which the program is being administered. “These incentive programs reduce tax revenue at both the state and local level, and increase state borrowing. It is essential that the legislature review their impact and make informed decisions about the continuation, expansion or elimination of each program. The changes proposed in this legislation will help our state make data-driven decisions about tax credit and abatement programs, ensuring that we are focusing state resources toward their highest and best use.

Municipal Finance to be Focus of Conference, State Leaders

State aid to municipalities will be the focus of attention Wednesday at the State Treasury’s Public Finance Outlook Conference, when Office of Policy and Management Secretary Ben Barnes is joined on a panel by House Minority Leader Themis Klarides and House Speaker Joe Aresimowicz before an audience of finance officials and municipal leaders from communities across the state. Proposed reductions and revisions to municipal aid, a by-product of the state’s anticipated deficit, have been the source of much conversation and contention in recent weeks, with leaders of the state’s cities and towns raising concerns about plans that would have them pay more for resident state troopers, teacher retirements, K-12 education and other programs.

The Connecticut Conference of Municipalities (CCM) recently pointed out that while the state economy grew by 17 percent between 2006 and 2015, state expenditures grew by 48.9 percent during the same period. The organization also reported that excluding K-12 education, local general government expenditures in Connecticut rank 50^th out of all states and the District of Columbia as a percentage of the U.S. Treasury’s measure of total taxable resources.

In a report recommending changes in the state’s fiscal relationship with cities and towns, CCM observed that “for over a decade prior to the Great Recession, governments in the state benefited from a strong economy and stable revenue. But this stability depended on reliable, adequate state aid and the local property tax. The lack of diversity in revenue sources and uncertainty at the state level are now eroding the capacity of local governments to meet their obligations to the public.”

State Rep. J.P. Sredzinski (R-112) wrote last month that “Monroe ranks among the top ten ‘biggest losers’ in terms of how much municipal aid was cut compared to their town budgets. For Monroe, the costs that the governor’s budget proposal will shift onto taxpayers clock in at a whopping $6.5 million for this year alone – nearly 10% of our revenue. This unprecedented transfer of costs is neither predictable, nor sustainable.”

The day-long conference on March 29 will also include a panel discussion with the U.S. Head of Government Regulations and Regulatory Policy, Bret Hester, and a review of methods to protect municipal governments from cyber hacking and theft, featuring David Geick, Director, IT Security Services, Bureau of Enterprise Systems and Technology, State Department of Administrative Services; Christopher Hauser, 2nd Vice President, Cyber Risk, The Travelers Companies, Inc.; Jack McCoy, Chief Information Officer, Town of Manchester.

An economic update, highlighting current and anticipated trends, will be provided by the state Department of Labor’s Patrick Flaherty, Assistant Director of Research and Information, and the Treasury’s Short-Term Investment fund and Municipal Employees Retirement Fund will provide updates.

The Treasurer’s Short-Term Investment Fund (STIF) is a Standard & Poor’s AAAm rated investment pool of “high-quality, short term money market instruments,” the Treasury website explains. STIF serves as an investment vehicle for the operating cash of the State Treasury, state agencies and authorities, municipalities, and other political subdivisions of the State. As of June 30, 2015, the fund administered 939 active accounts for 67 state agencies and authorities and 222 municipalities and local entities in Connecticut.

The conference will be held at Rentschler Field in East Hartford.

Connecticut Main Street Center Award Winners Reflect Excellence, Community Involvement

A downtown management organization engaging the community in envisioning two underutilized parks as places that downtown residents, visitors, workers and families can mingle with artists and creatives, and a regional planning organization that created a program focused on supporting local businesses, creating jobs and filling vacant spaces in eight village centers are just two of this year's Awards of Excellence winners being recognized by the Connecticut Main Street Center (CMSC). In total, eight recipients have been selected to receive the prestigious awards, including organizations and initiatives from Bridgeport, Unionville Village in Farmington, Hartford, Meriden, New Britain, New Haven, and the Northwest Corner.  The awards will be presented at CMSC's Vibrant Main Streets event in the atrium of the Legislative Office Building on May 18 in Hartford.

The other winning entries include:

• a 14-acre flood control project that created a public park and mixed-use economic development in downtown Meriden;
• a comprehensive and complete overhaul of the City of Hartford's zoning language and process;
• an interpretive wayfinding/signage program that connects Walnut Hill Park, Little Poland and Downtown New Britain;
• the restoration of a historic ball bearing mill on the banks of the Farmington River into a mixed-use campus in the heart of Unionville Village;
• a Twilight Bike Race & Street Festival that celebrates biking, food, culture and entertainment in Downtown New Haven; and
• the redevelopment of a 1903 factory building into 72 units of market rate housing within easy walking distance of jobs and transit in downtown Hartford.

"This year's winners represent both catalytic and keystone initiatives that ignite and support significant positive change in Main Street communities," said CMSC Associate Director Kimberley Parsons-Whitaker. "From engaging the community in playing a proactive role in local economic development and envisioning new life for their historic public places, to the complex redevelopment of historic mills and factories for modern residential and commercial uses, our 2017 award recipients are leaders in re-imagining Main Streets."

In addition to its Awards of Excellence, CMSC also named the recipient of its 2017 Founder's Award, presented by Eversource Energy. CMSC founding President & CEO John Simone, who will retire in August, was selected to receive the Founder's Award for his more than 17 years of leading the organization's evolution as the voice of downtown, and for championing the tools, resources and political will needed for Connecticut's Main Streets to thrive.

Connecticut Main Street Center's mission is to be "the catalyst that ignites Connecticut’s Main Streets as the cornerstone of thriving communities."  CMSC works at both the local and State level to create and implement successful downtowns that meet the needs of residents and visitors. The organization describes a successful downtown as "one that incorporates housing, retail, social and business opportunities with transportation options for all users – walkers, cyclists, motorists and more."   Created in 2003 to recognize outstanding projects, individuals and community efforts to bring traditional downtowns and neighborhood commercial districts back to life, socially and economically, the Awards of Excellence are presented annually.

2017 Connecticut Main Street Center Awards of Excellence

CT Main Street Catalyst Awards

•  Meriden Green - Recipient: City of Meriden. Partners: State of CT (DECD, DEEP, DOT); U.S. EPA; FEMA; Army Corps of Engineers; Meriden Flood Control Implementation Agency; Milone and MacBroom; AECOM; and La Rosa Construction.
• Downtown Bridgeport Placemaking Program & Downtown Farmers Market at McLevy Green - Recipient: Bridgeport Downtown Special Services District. Partners: Project for Public Spaces; New Venture Advisors LLC.
• ZoneHartford: Form-Based Code Zoning Regulations - Recipient: City of Hartford. Partners: Fitzgerald & Halliday, Inc.

CT Main Street Keystone Awards

• Collaborative Shared Economic Development Services Project - Recipient: NW Hills Council of Governments. Partners: Goman+York; One Eleven Group; State of CT (OPM); Towns of Canaan/ Falls Village, Cornwall, Goshen, Kent, North Canaan, Norfolk, Salisbury/Lakeville and Sharon
• New Britain Historic Trails & Signage Program - Recipients: City of New Britain; TO Design LLC. Partners: National Parks Service
• Upson Market Place, Unionville - Recipient: Brian Lyman of Parker Benjamin Real Estate Services LLC. Partners: Town of Farmington.
• New Haven Grand Prix: a Twilight Bicycle Race & Street Festival - Recipients: CT Cycling Advancement Program; Town Green District (New Haven). Partners: City of New Haven; Taste of New Haven.
• Capewell Lofts, Hartford - Recipient: CIL. Partners: Capital Regional Development Authority; State of CT (DECD); InsurBanc; Guilford Savings Bank; Crosskey Architects; TO Design

10 CT Companies Are Finalists at Entrepreneur Innovation Awards, Three Receive Funds to Boost Growth

Fledgling entrepreneurial businesses in West Hartford, New Haven and Marlborough will be getting a financial boost in their efforts to gain a foothold in their respective industries. CTNext, Connecticut’s go-to resource for entrepreneurial support, announced the three winners of the most recent Entrepreneur Innovation Awards (EIA), held this month at the Connecticut Historical Society in Hartford.

The finalists, Connecticut-based companies and entrepreneurs, presented their innovative project ideas to a panel of entrepreneurial experts for an opportunity to secure $10,000 awards to help support business growth. The top winners, to receive $10,000 awards, were:

• GinzVelo Hybrid Electric Cycles (West Hartford): A personal transportation solution powered by pedaling or the electric motor to effortlessly travel up to 100 miles to and from your destination.
• Sweetflexx (Marlborough): Resistance technology active wear enables muscles to work more efficiently, resulting in a higher rate of calorie burn.  McCullough Shriver founded Sweetflexx. (see video below)
• Verb Energy Manufacturing (New Haven): A healthy, caffeinated, energy bar that combines your cup of coffee and an energy bar for less cost. Verb Energy  was founded in 2016 by four Yale students.

The “judges’ favorite” went to Sweetflexx, and the “crowd favorite” was awarded to Verb Energy.  Each business will receive an additional $2,000.

The other finalists included:

• Global Hydro Pneumatic High Tech Inventions (Shelton) Developing an all-wheel hydraulic power jack system that is safer and less damaging to cars.
• Loki (Woodbridge) Creating an app that gives users control over their own multi-perspective visual experience.
• Mobile Sense Technologies (Farmington) Engineering an “off-the-chest” ECG monitor for 24/7 management of cardiac arrhythmias.
• Obvia (West Hartford) Creating a lightweight, dual-winglet blade for small to mid-sized wind turbines that is both energy- and cost-efficient.
• Olie Robotics (Manchester) Building a professional robotic vacuum that cleans offices at a third of the cost with no labor hassles.
• PennSMART (North Branford) Producing a universal retrofit for lighting fixtures that allows surveillance and sends alert notifications.
• Trekeffect (Niantic) Creating an app that allows individuals to sell their travel itineraries.

“The Entrepreneur Innovation Awards seek to give new and growing companies the support they need to thrive,” said Glendowlyn Thames, executive director of CTNext. “Through these events, we have seen a number of incredible companies that are changing their respective industries and creating a positive economic impact in our state. These grants continue to support companies at the earliest stages of growth and to drive them to the next level of development.”

To be eligible for an EIA, startups must be Connecticut-based, registered as CTNext members, and looking to conduct growth-related activities to help advance their business. Project examples include but are not limited to prototyping, performance testing, compliance testing, product or service development, market research, licensing and more.

A full list of criteria can be found on the application page. For more information on the program or to apply, please visit: http://ctnext.com/entrepreneur-innovation-awards/.  CTNext launched in 2012 and has more than 1,500 members in its network, since initiating the awards program in February 2014 CTNext has awarded $544,000 to 52 companies.

The goal of CTNext is to build a more robust community of entrepreneurs and to accelerate startup growth by providing access to talent, space, industry expertise, services, skill development and capital to foster innovation and create jobs for people in Connecticut.

https://youtu.be/f7AxJz-KsUA

Percentage of Unbanked, Underbanked Households Continues to Climb in CT, Now Exceeds 1 in 5 Households

One in five Connecticut households is unbanked or underbanked, according to data compiled by the Federal Deposit Insurance Corporation, and the percentage of residents unbanked – those that do not have an account at an insured institution - has climbed in the state over the past six years. The percentage of Connecticut households considered unbanked has risen steadily, from 5.3 percent in 2009 to 6.2 percent in 2015, the most recent year for which data is available.  Connecticut ranked 21st in the nation in the percentage of unbanked households. 

Overall, the percentage of state households thatare either unbanked or underbanked increased slightly, from 20 percent to 21 percent between 2013 and 2015.  Those considered unbanked had a checking or savings account but also obtained financial products and services outside of the banking system.

Connecticut’s percentage of unbanked and underbanked individuals is better than the national average, which is 26.9 percent.  Nationally, 68 percent are considered to be fully banked, with an account or accounts at an insured institution, compared with 73.3 percent in Connecticut.

To assess the inclusiveness of the nation’s banking system, and in partial fulfillment of a statutory responsibility, the FDIC conducts biennial surveys of households to estimate the proportion of households that do not fully participate in the banking system.  The survey provides estimates of the proportion of U.S. households that do not have an account at an insured institution, and the proportion that have an account but obtained (nonbank) alternative financial services in the past 12 months.

Estimates from the 2015 survey indicate that 7.0 percent of households in the United States were unbanked in 2015. This proportion represents approximately 9.0 million households. An additional 19.9 percent of U.S. households (24.5 million) were underbanked,

The 2015 FDIC National Survey of Unbanked and Underbanked Households presents new data and insights on the size of unbanked and underbanked markets at the national, regional, state, and large metropolitan statistical area (MSA) levels. This is the fourth installment of the report.

In the Hartford-East Hartford-West Hartford metropolitan statistical area, a slightly higher percentage of households are unbanked or underbanked – 25.6 percent.  In the New Haven-Milford MSA, that percentage is slightly lower than statewide, at 19.5 percent.  The Bridgeport-Stamford-Norwalk MSA is lower still, at 18 percent.

Lembo Develops Plan Aimed at Bringing Drug Costs Within Reach

State Comptroller Kevin Lembo, after what was described as “exhaustive research and consultation with representatives across all sectors of the health care industry,” has developed a five-point plan to address “skyrocketing pharmaceutical drug costs.” Lembo’s proposed legislation, which is to be considered by legislators in the five-month session that began earlier this month, aims to be comprehensive in addressing a range of interrelated issues.  Those issues include requiring justifications for sharp price increases, establishing oversight of drug costs that exceed certain thresholds, ensuring that consumers benefit from rebate savings, promoting insurance plans that emphasize affordable co-pays and preventive care, and eliminating incentives that perversely encourage providers to prescribe the most expensive drugs.

“In a divided country,” Lembo said, “when we’re desperate to find common ground, virtually everyone can agree that prescription drug costs are out of control and must be fixed.  This rise in patient cost share, combined with the rising prices of pharmaceuticals is creating a significant financial burden for Connecticut residents,” Lembo added, noting that “consumers are increasingly bearing a greater share of those costs.”

Lembo, who served as Connecticut’s first Healthcare Advocate prior to being elected State Comptroller in 2010, currently administers the state health plan on behalf of approximately 200,000 people.  The plan includes:

• Require pharmaceutical manufacturers to justify launch prices and price increases over a certain threshold

To address rising drug prices that appear to be arbitrary and unjustifiable, Lembo proposes a requirement that when drug manufacturers increase prices beyond certain thresholds, (for example, list prices increase over 50 percent in the last five years or 15 percent in the last year or launch prices 30 percent or more above the average price for other drugs in a therapeutic class) they must provide the state with information about total costs for producing specific drugs and costs for research and development, marketing, different prices charged for the drug, total profit from specific drugs, research and development efforts that have not resulted in any approved drugs, details about discounts and rebates provided and, of course, a justification for the launch price or the price increase in question.

The findings of a state review would be reported to the legislature and governor to evaluate the appropriateness of the price increases in question.

• Limit the launch price and annual increases of certain high cost drugs

Establish a working group to evaluate the potential of using the information reported above to regulate drug prices in certain egregious instances through the creation of a state-level drug price review board. The authority would review the launch prices of new drugs and annual increases of existing drugs that exceed certain thresholds. The working group should recommend a process for determining if the launch prices or price hikes are justified and recommend possible state actions to take when increases are deemed unjustified.

• Promote the adoption of value-based insurance design

The state Department of Insurance (DOI) and the state health exchange should be required to promote the adoption of plans that use a value-based insurance design. Value-based insurance for prescription drugs generally encourage medication adherence by reducing or eliminating co-payments and deductibles for drugs that help control chronic conditions.  Better managed chronic diseases reduce in-patient hospital stays and emergency room visits by individuals with chronic diseases. The state employee plan has seen significant increases in medication adherence since adopting a lower co-pay structure for maintenance drugs through the state Health Enhancement Plan.

• Allow consumers to benefit from negotiated drug rebates.

Require health plans to base co-insurance and deductible payments on the net price of the drug, post rebate, rather than the list price, allowing the consumer to share in rebate savings negotiated by the pharmacy benefit manager or plan administrator.  For certain highly rebated drugs the list price can be as much as three times more than the final price paid by a health plan after manufacturer rebates.

• Remove incentives for physicians to administer higher cost drugs.

In 2004, Medicare began to reimburse physicians 6 percent of the acquisition cost of drugs for administration. Commercial payers, which often base their reimbursement policies off Medicare, quickly followed suit. The new policy created a perverse incentive in which physicians were paid more for using more expensive drugs even when lower cost equally effective alternatives were available. It also incentivized drug manufacturers to significantly increase prices. As a result, many physician-administered drugs have seen massive price increases since 2004, with many oncology drugs well in excess of $100,000 per regimen. The state should require state-regulated insurance plans to completely delink the reimbursement for physician-administered drugs with the costs of the drugs administered in order to eliminate such perverse incentives.

“This plan emphasizes transparency, accountability and common-sense health care policy that puts quality and wellness for everyone above the corporate profits of big Pharma,” Lembo said in recommending the five-part plan.

Over the past several years, Lembo has been working with state leaders and Connecticut’s congressional delegation to investigate flaws in the pharmaceutical market and implement policies to address the problem.   Last year, he co-hosted a forum at the State Capitol with the Connecticut State Medical Society (CSMS) that brought together physicians, pharmaceutical companies, academicians, patient advocates and other industry experts to address the skyrocketing cost of medications.

Lembo also serves on a working group of the NASHP (National Academy for State Health Policy), which recently issued a report recommending proposed state action, some of which is reflected in Lembo’s legislative proposal.  The Office of the Healthcare Advocate, which Lembo led for six years a decade ago, is an independent agency that helps consumers when they have disputes with their health insurance company. They also educate people about their health care rights and serve as a watchdog over Connecticut’s healthcare marketplace.

CT’s Local Government Workforce Shrinks 7.4% in Past Decade; 10th Largest Reduction in US from Employment Peak

Connecticut’s local municipal workforce has been shrinking for the past decade, and had been reduced 7.4 percent by 2015 when compared with the peak employment year of 2005, according to a new analysis by Governing magazine.  The drop in local government employment is the 10^th largest in the country by percentage of workforce, when peak employment levels were compared with 2015 numbers. “Going on nearly a decade since the start of the recession, localities in many parts of the country have since restored public payrolls to prior levels. But some still employ far fewer workers than they did before the downturn,” Governing reported.

Governing compared each state's pre-2010 peak aggregate totals to the latest 2015 data, excluding the education sector.  In all, the magazine reported, local governments in 26 states had yet to see payroll expenditures return to prior levels when adjusted for inflation. Similarly, local public employment remains below previous highs in most states and is down 3.5 percent nationally from 2008.

The steepest declines in local government payrolls, when 2015 data was compared with the peak pre-recession year, came in Delaware (-20.5% from 2007), Michigan (-18.2% from 2003), Arizona (-17.1% from 2008), Rhode Island (-16.5% from 2003), Massachusetts (-14.4% from 2008), Nevada (-14.1% from 2009), Florida (-11.0% from 2008), Indiana (-8.8% from 2008), New Jersey (-8.3% from 2009) and Connecticut (-7.4% from 2005).

Where localities chose to make payroll cuts has varied, according to the analysis, but a number of patterns were pointed out, based on Census data.  When national employment estimates were compared with 2008 levels, non-sworn police employees sustained the single largest reduction of any major category of workers, the analysis indicated. Governing suggested the reductions were likely a result of police departments trimming civilian staff to maintain the size of police forces on the streets. Nationally, the number of police and firefighters were down 2.6 percent from 2008 while all other areas of local government, excluding education and hospitals, experienced a larger 4.5 percent decline.

At the opposite end of the spectrum, North Dakota, South Dakota, Wyoming, Montana and New Mexico recorded the biggest increases in noneducation payrolls since the recession began in 2008-2009.  Half the states showed an increase in local government payrolls, and despite the generally slow recovery across many regions of the country, U.S. local government payroll spending overall showed a slight three  percent nationwide uptick between 2014 and 2015, according to the analysis.

Financial Cost to Connecticut Smokers Among Highest in the Nation

The financial cost of smoking in Connecticut is higher than just about anywhere in the United States.  The total cost over a lifetime per smoker is $2,183,204, the third highest in the nation, and the annual cost per year per smoker of $42,808, is also third highest in the nation, just behind New York and Massachusetts. The lifetime health care cost per smoker, $274,272 in Connecticut, is higher than every state but one, (Massachusetts), and the out-of-pocket cost per smoking individual of $170,513 for smokers living in Connecticut is third highest in the nation.

The data was compiled by the financial website WalletHub, where analysts calculated the potential monetary losses — including the cumulative cost of a cigarette pack per day over several decades, health-care expenditures, income losses and other costs — brought on by smoking and exposure to secondhand smoke. 

Emphasizing that “the negative physical and financial effects of smoking can be significant,” WalletHub noted that Connecticut’s rankings placed it as among the most costly in every category.

Over a lifetime, the financial opportunity cost for smokers living in Connecticut was $1.436,335 and the income loss per smoker was calculated at $286,950.  Other costs per smoker, such as not being able to qualify for homeowner’s insurance discounts for non-smokers, were $15,133.  In each instance, the costs in Connecticut were among the three highest among the 50 states and District of Columbia.

Annual income loss for Connecticut smokers is calculated at $5,626.  Only Maryland, Alaska, New Jersey and D.C. were higher, according to the analysis. Attributable factors included absenteeism, workplace bias or lower productivity due to smoking-induced health problems.  The website also noted that according to a recent study from the Federal Reserve Bank of Atlanta, smokers earn 20 percent less than nonsmokers, 8 percent of which is attributed to smoking and 12 percent to other factors.

For the calculations, WalletHub assumed an adult who smokes one pack of cigarettes per day beginning at age 18, when a person can legally purchase tobacco products in the U.S., and a lifespan thereafter of 51 years, taking into account that 69 is the average age at which a smoker dies. Data used in developing the ranking were collected from the U.S. Census Bureau, Bureau of Labor Statistics, Centers for Disease Control and Prevention, Insurance Information Institute, NYsmokefree.com, Federal Reserve Economic Data (FRED), Kaiser Family Foundation and the Independent Insurance Agents & Brokers of America.

In 2016, the American Lung Association gave Connecticut an “F” grade in its spending of tobacco prevention and control funds.  The ALA points out that 40 states and Washington D.C. spend less than half of what the Centers for Disease Control and Prevention recommends on their state tobacco prevention programs.  Overall, states spend less than two cents of every dollar they get from tobacco settlement payments and tobacco taxes to fight tobacco use.  Each day, more than 2,600 kids under 18 try their first cigarette and about 600 kids become new, regular smokers, according to nationwide data from ALA.

A report on Connecticut's spending on tobacco prevention just over a year ago found that the state was being outspent over 67 times by tobacco companies' marketing efforts - due in large part to the state spending only a small portion of tobacco settlement funds on anti-smoking efforts.

The report, “Broken Promises to our Children: A State-by-State Look at the 1998 State Tobacco Settlement 17 Years Later," said the state was spending $1.2 million in FY 2016 to fight tobacco use. That's compared to an estimated marketing investment of $80.4 million by tobacco companies in Connecticut that year. The national average shows a margin of 20.1 to 1.  At that time, Connecticut ranked 38th in spending on a percentage basis.  The state has consistently spend less than the CDC has recommended.

The annual report was developed by the Campaign for Tobacco-Free Kids (CTFK), a coalition that includes the American Heart Association, the American Cancer Society Cancer Action Network, the American Lung Association, the Robert Wood Johnson Foundation, Americans for Nonsmokers’ Rights, and the Truth Initiative.

A year later, the next report ranked Connecticut last, as Connecticut’s projected spending on smoke cessation and tobacco prevention efforts for FY 2017 dropped to zero.  The report found that 13.5 percent of adult state residents are smokers, and 10.3 percent of high school students smoke.  Just under 5,000 deaths each year are caused by smoking in Connecticut, and 27 percent of cancer deaths are attributable to smoking.  Connecticut’s cigarette excise tax, $3.90 per pack, is the second highest in the nation. It was estimated that the state would collect $519.7 million in revenue this year from the 1998 state tobacco settlement and tobacco taxes, but will spend none of it on tobacco prevention programs.

CT Seen As Hiding Bad Budget News

In an article headlined “Bad Budget News? Some States Just Bury It.” Connecticut is one of two states selected as a poster child for what a national publication describes as “hindering transparency.” The Connecticut policy that brought the unwelcome attention was put in place last year.  As Governing explains:

“Connecticut ended its practice of current services projections. That’s a boring-sounding way of talking about how much programs will cost over time, assuming there are no policy changes. It’s a baseline against which to compare any proposed cuts or increases in spending.”

Ben Barnes, Connecticut’s budget director (Secretary of the Office of Policy and Management), said last year that it didn’t make sense to project shortfalls or surpluses into the future, Governing explains. “There’s no such thing, in my view, as a deficit or a surplus in years in which there is no appropriation in place,” said Barnes, whose photo accompanies the article.

Some legislators complained that the new rules would be a blow against transparency in the budget. The change was adopted anyway, the publication noted, adding that a majority of states already choose not to publish current services projections.

“There is kind of a tendency for policymakers to focus on the immediate and not the future,” Liz McNichol of the Center on Budget and Policy Priorities, told Governing. “This reduces the outside pressure to look beyond one year.”

The publication’s report notes that Connecticut “will have to fill a shortfall of more than $1 billion in its budget this year.”

The other state highlighted in the article is Kansas, where a state task force recommended that the department stop releasing monthly budget reports after numerous reports indicated that the state had fallen short of anticipated revenues.   The Governor’s administration also “decided to kill a quarterly economic report that was also habitually filled with bad numbers.”

Governing is the nation's leading media platform covering politics, policy and management for state and local government leaders.

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.