Smart money
A new data map courtesy of Fitch Ratings shows which states have the highest college tuition growth (for both public and private institutions) in the last five years and to what degree wage growth hasn’t kept up. Hawaii’s tuition increases easily beat out the rest of the country with an astonishing 34 percent hike over the past five years. The Oct 23 release indicates that wages there have only increased by just under 12 percent. (Separately this week, Standard & Poor’s revised its outlook on Hawaii’s AA general obligation rating from positive to stable, meaning it’s unlikely the state will see a credit rating upgrade in the near future.) Three states – Washington, Alabama and Georgia – had higher education costs increase by just over 25 percent. Thanks to passing an increased minimum wage, Washington’s wage growth has increased substantially too – by more than 17 percent. But not so with the southern states. Georgia and Alabama’s wages increased by 13 percent and 11.5 percent, respectively.West Virginia’s tuition rates have increased by the smallest amount at 9.3 percent. And thanks to the fracking business, wages have increased there by more than 13 percent. And speaking of booms, North Dakotaoans are the big winners in this matchup – tuition rates have increased by nearly 13 percent but wages have exploded, increasing nearly 44 percent over the past five years. Oil, that it. Black gold, Texas tea…
Greening up the joint
A month ago, New York City announced it planned to issue its first-ever green bond offering. Now Connecticut is poised to do the same. State Treasurer Denise Nappier’s office has announced it also plans to sell the bonds to finance environmentally sustainable projects. Bond sales next month will provide funding for up to $60 million of wastewater infrastructure projects statewide through the State’s Clean Water Program. Established in 1986, the Clean Water Program has provided nearly $3 Billion for projects in more than 120 cities and towns. It partners with local governments to fund and build projects to improve water quality and protect public health.“We are developing the new Green Bonds product to meet the needs of the growing group of investors who have mandates to invest in sustainable projects that will help preserve our environment for future generations,” said Treasurer Nappier in a press statement.
Connecticut’s Green Bonds will be included as part of a larger $300 million General Obligation bond issue. The World Bank started Green Bonds in 2008 to financing environmentally friendly projects. To date, $51 billion in Green Bonds have been issued worldwide, but only recently have U.S. governments have begun issuing such bonds. Five municipal issuers have issued Green Bonds in 2014.
Slow as molasses
Fitch has produced another interesting tidbit this week on the nation’s job recovery that addresses why some states are lagging behind. First off, analyst Eric Kim notes that it took us six years for national payrolls to get back to their pre-recession peak. That’s quite different than the last recession that ended in 2001, where payroll recovery took three years. Still the U.S. labor market seems to be improving at long last.All in all, state economies are strong. “That said,” Kim warned, “there are definitely places where legacy issues are affecting employment, dragging down jobs growth and holding back tax revenue growth.” The problem is we all figured out how to do more with less during the Great Recession. Now, in recovery, there are fewer jobs out there for the offering. Through July only 17 states had returned to their pre-recession employment levels. The reasons vary state by state. In Michigan, the problem is industry. “That state has been undergoing a truly fundamental restructuring of the auto industry, and that’s a main driver of the state’s economy,” said Kim, who noted that Michigan is has the farthest to go of any state in getting back to pre-recession employment peak. In Nevada, the problem is recession-driven: that state’s housing market took such a hard hit, it’s still trying to make up lost ground even with big gains in recent years. In Maine, the problem is demographics: its population is declining and getting older.
Slow jobs growth impacts state budget. Take New Jersey, which has only gained back 3 percent of its jobs since it bottomed out in 2011, said Kim. Meanwhile, between 2009 and 2013, the state ranked 47th in terms of total tax revenue growth – “hand-in-hand,” Kim noted, “with its employment growth picture.”
