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Connecticut's Fiscal Capacity Ranks First Among States
A joint report
by the Urban-Brookings Tax Policy Center and the New England Public
Policy Center at the Federal Reserve Bank of Boston finds that
Connecticut ranks first in fiscal capacity compared to all other
states.
Fiscal
capacity has to do with the relationship of the state’s capacity
to raise revenue, the revenue it raises as a result of policy
choices, and the states expenditure needs. A state's
revenue capacity measures the resources its state and local
governments can tap to finance public services. Revenue
effort is the ratio of actual revenues to revenue capacity.
Expenditure need is a measure of the cost of providing public
services at an average level given the state’s characteristics.
States with
high per capita income and high property values tend to have high
revenue capacity. A state with low fiscal capacity has a
relatively small revenue base, a relatively high need for
expenditures, or, as is often the case, a combination of both.
New Hampshire,
Delaware, Connecticut, Massachusetts, Nevada and New Jersey kept
their position in the top ten states with the highest fiscal
capacity. Connecticut ranks highest with a revenue capacity of
$6,272 per person and a revenue capacity index of 135.
Report authors
find little
relation between the amount of federal aid states receive and their
fiscal capacities. Differences in state revenue capacity and
expenditure need might justify federal intervention in terms of
equalizing grants. Indeed, the federal government may view
supplementing revenues for states with low fiscal capacity as part
of its redistributive role.
This analysis
should provide an interesting perspective of Connecticut's budget
situation. Earlier this month,
State Comptroller Nancy Wyman said the projected state budget
surplus has grown to $532.2 million and is expected to climb
significantly higher over the next few months. The estimated $516.5
million surplus is based on a budget of $16.07 billion for fiscal
2007. The state ended the 2006 fiscal year with a $940.5 million
surplus.
Connecticut Data;
Tax Policy Center Fiscal Disparities Page
Governors Collaborate on "Innovation America"
China overtook
the U.S. in 2004 to become the leading exporter of information
technology products. In 2005, only four American companies
ranked among the top 10 recipients of patents granted by the U.S.
Patent and Trademark Office. Finland, Israel, Japan, South
Korea and Sweden each spend more on research and development as a
share of GDP than the U.S.
Seeing the writing
on the wall,
the National
Governors Association has formed a bipartisan
Innovation America initiative, led by Governors. Janet
Napolitano (AZ) and Tim Pawlenty (MN). "Working with the NGA
Center for Best Practices, the task force will take the lead in
developing strategies that drive innovation," said Gov. Pawlenty.
"The work of this task force will be critical to ensuring every
state—and our nation—is equipped to excel in the global economy."
The 17-member task
force includes
governors,
business leaders and university presidents. The task force will
develop strategies to create clusters of innovation and new
approaches to math and science education for all students. The
agenda includes discussions centered around the state innovation
landscape, new approaches to K-12 science, technology, engineering
and mathematics education and the role of postsecondary education as
an engine of innovation. Key gubernatorial staff members will learn
about the resources being developed through the initiative and begin
framing an action plan for creating an "innovation environment" in
each state.
What's Connecticut's Innovation Environment?
More
Commission on
Education Finance Releases Report
The Governor's Commission
on Education Finance has released its final report, calling for just
over $1.2 billion in additional state education aid--$1.14 billion
for education cost sharing and $60 million for other grants.
More |
