The Most Overstaffed? Hardly

–by Thomas Hooker

At a town hall meeting in Greenwich on March 31st hosted by Republican state representatives Lile Gibbons (R-150), Livvy Floren (R-149), and Fred Camillo (R-151), and Republican state senators L. Scott Frantz (R-36) and John McKinney (R-28) Representative Floren emphatically asserted that the state doesn’t need to raise taxes, because it can easily cut spending sufficiently on its bloated state government workforce. Representative Floren stated that Connecticut’s state government employs more workers per capita than any other state in the nation. Senator L. Scott Frantz backed her up, stating that there were “multiple sources” for her contention.

Really? Let’s take a look at the facts, shall we?

According to data in the U.S. Census Bureau’s 2009 Statistical Abstract of the United States, Connecticut employed 62,000 full-time equivalent (FTE) employees in 2006, the latest year for which it listed data. That translated into 17.8 state employees per 1,000 population. The figure ranks Connecticut not tops in the nation, but 23rd. In other words, Representative Floren’s claim is nowhere close to the truth. Furthermore, also using data from the Census Bureau’s 2009 Abstract, a look at staffing levels of local governments in the state shows that all of Connecticut’s municipalities together employed 126,000 FTE employees in 2006. That translates into 36.1 FTE employees per 1,000 population. That figure ranks the Nutmeg State 38th lowest nationwide (the lower the rank, the more efficient the staffing levels, or the lower the services rendered).

To understand the overall efficiency of a state’s staffing, it is important to examine combined state and local employees. By that measure, Connecticut employed 53.9 public workers per 1,000 population in 2006. That ranks the state 29th nationally. In other words, Connecticut’s state government stands slightly higher than the national average in terms of staffing levels, but if we look at total public sector employment at both the state and local levels, Connecticut ranks among the more efficient in the country in terms of staffing. Furthermore, far from state employment metastasizing out of control, as claimed by Republicans, the same Census Bureau data show the opposite to be the case. Analyzing Census Bureau information on headcount for the period from 2000 through 2006, we see that Connecticut was one of ten states that reduced the total number of their state employees. It also achieved one of the largest reductions in the nation, shrinking by 4,000 employees over that period.

Not only is Connecticut relatively efficient in terms of staffing, the same is the case for New England as a whole. As Nick Turner and E. Matthew Quigley, economic researchers for the Federal Reserve Bank of Boston, concluded in their 2005 study titled “Do New England State and Local Governments Have Too Many Employees and are they Overpaid?”:

“The picture that emerges from these statistics is one of a relatively lean and competitive public sector workforce in New England. Compared with the nation, New England employs fewer public workers per capita, and the salaries of these workers represent a smaller share of the personal income of state residents… While the average salary of the region’s state and local employees is relatively high, as a percentage of personal income New England’s total public sector payroll is relatively low…” These findings “are hard to reconcile with the characterization sometimes made that the region’s public sector is too large or bloated, or that the average state or local employee is overpaid.”

Their research on state and local employment in the region found that Connecticut ranks in the middle of the six New England states in terms of headcount per capita at the state level, and fifth lowest of the six in terms of municipal employment per capita. In terms of government payroll, a similar picture emerges. As a percentage of average personal income, spending on state workers’ salaries ranked the state fourth lowest in the region. Local government spending as a ratio of personal income was fifth lowest in New England. Combined state and local government salaries on that measure shows Connecticut to be substantially lower than both national and regional averages.

So however you slice it, Representative Floren’s and Senator Frantz’s suggestion that Connecticut’s state government is the most overstaffed in the nation is pure baloney. It is frankly shocking that our state representatives are so woefully out of touch with Connecticut’s basic fiscal facts. If our Republican representatives and senators cannot be bothered to learn budget basics, they might prefer to simply sit quietly on the sidelines and let leaders who have done their homework take the lead in attempting to solve our state’s fiscal problems.

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10 responses to “The Most Overstaffed? Hardly

  1. Do those numbers include teachers and school staff?

  2. The census bureau has some site where you can build tables on state and local govt employment. Unfortunately, the site always timed out before it could generate any table.

    I tend to like to look at the total spending, not the number of employees. This is because there are different ways that states count employees. For instance, if one local government subcontracts its school bus operations to a private company, those employees won’t be state employees, but if another local government has its own bus drivers, those will be state employees. However, subcontracting may or may not necessarily be cheaper. So I say it’s better to look at total spending.

    The State Health Facts site has the various states ranked by state spending per capita (so it presumably doesn’t include local government spending). Connecticut is #10, at $6,533.

    The top state is Alaska at $16,952, followed by West Virginia at $10,245 and Wyoming at $9,756. Alaska has the benefit of oil reserves, Alaska has benefitted from Republican-based federal pork (Ted Stevens), and West Virginia has benefitted from Democratic-based federal pork (Robert Byrd).

    I’d really like to see a similar list on state + local spending per capita, though, or state + local spending as a percentage of state GDP. Because in looking at the top 10, I know there are some anomolies in the data (for instance, Hawaii has one school district for the whole state, so it’s educational spending is going to be almost all at the state level instead of the local level).

  3. I’m not going to spend the time to investigate this… so Thomas, feel free… aside from the usual inconsistencies of comparisons mentioned by GMR… CT is one of a handful of states that has no County Government. Do your state & local comparisons take into account County Government?

  4. CT is one of a handful of states that has no County Government. Do your state & local comparisons take into account County Government?

    Correct!

    And if up to “his” usual standards; Hooker will have no response and will be content having yet further sullied the good name of Connecticut’s Founder.

  5. GMR –
    One source you might like is the Tax Foundation:
    http://www.taxfoundation.org/research/show/276.html

    For State&Local spending per capita in 2006, CT ranked 9th with $9,023, which is 7% higher than the national average.

    Based on a population of about 3.5 million, if we cut $8 billion in spending, we would have to cut $2,284 per capita. This would drop us to a spending level of $6,738 for a tie with Oklahoma, just above South Dakota, Arkansas and Idaho.

    Granted, the spending number are for fiscal year 2006 and the population is based on a 2008 estimate, but it is close enough to get a good view of where things really are with respect to spending.

    In terms of the numbers, Mr. Hooker provides a link to the Census data that he uses. It is 42 pages full of data. Based on a quick reading, it appears as if by ‘local’, they include County, Municipal, Township and School District.

    Reading through the report, it appears as if it does include county government and it does include teachers and school staff.

  6. I’d really like to see a similar list on state + local spending per capita, though, or state + local spending as a percentage of state GDP.

    We can look at state and local spending, or state and local revenue, but we should always keep in mind state income also varies (I think this is your GDP point).

    Let’s take the Tax Foundation data. Their calculation of state/local tax burden skews CT data because of their methodology and our high incomes (They admit this to some degree: “And second, each of the states in that Tri-State region [New Jersey, New York, and Connecticut] have very high incomes compared to the national average, which means that residents tend to import a large amount of other states’ taxes, most notably as it relates to capital income and the importation of taxes on capital.]

    Their basic spending/revenue numbers seem to remain unaffected by this skew, though.

    So, if we take state and local spending per capita in 2006 ($9,023) and divide it by income per capita in 2006 ($57436.04), we get 15.7%. That ranks 49th. So, as a function of per capita income, the state spends less than 48 other states (New Hampshire was 50th). The same goes for state revenue (not surprising since most states must balance their budgets). CT ranked 49th in state and local per capita revenue divided by state and local per capita income.

    I know this is FY 2006, but as Aldon says, things probably have not changed THAT much since then. I also recognize that part of this is due to the fact that we do not get back as much from the federal government per capita/per capita income as other states. Still, if the question is whether CT state and local government is efficient, then it appears that we get our state and local services at a lower rate per capita in relation to our state’s income level than just about every other state.

  7. An awesome – give ’em hell – post, Hooker.

    Great inaugural for the Sunday spew on CTLP!

  8. We also pay the second highest average state employee salary in the nation.

    http://sourcebook.governing.com/subtopicresults.jsp?ind=656

  9. It’s embarrassing when we’re called out for being stupid:

    Examining IRS tax return data by state, E.J. McMahon, a fiscal expert at the Manhattan Institute, measured the impact of large income-tax rate increases on the rich ($200,000 income or more) in Connecticut, which raised its tax rate in 2003 to 5% from 4.5%… Over the period 2002-2005, in each of these states the “soak the rich” tax hike was followed by a significant reduction in the number of rich people paying taxes in these states relative to the national average. Amazingly, these three states ranked 46th, 49th and 50th among all states in the percentage increase in wealthy tax filers in the years after they tried to soak the rich.

    http://online.wsj.com/article/SB124260067214828295.html#mod=rss_opinion_main

  10. Thomas Hooker

    Two individuals questioned whether these data from the U.S. Census Bureau took into account county government. the answer is yes: the data cited were grouped into two, one state employees, and the second all other local employees, which would include town, city, and county level employees. The absence of a layer of county employees could very well be a factor in Connecticut’s relatively low level of staffing. And I would guess that the number of small towns in the state would also affect lower staffing levels. Faced with limited funding sources, I would not be surprised if many smaller towns decided to go without certain services and the municipal employees to provide them. Were several towns to band together to provide government services, as has been suggested, I would not be surprised if the ratio of public employees per 1,000 population rose rather than fell, since those regional groupings might then have a critical mass of both funding and demand to provide more services.

    The data I used for this essay are readily available on the federal government’s website, and I’ve listed the address. The study by the Federal Reserve Bank of Boston is also easily accessed online, and I would encourage all those who doubt my conclusions to read the study.

    In response to “Curious”, yes, the data do include school employees. Indeed, university employees comprise one of the largest segments of employment at the state level for Connecticut of all the categories.

    Regarding total spending, The Boston Fed study goes into that question and concludes, as I quoted, that as a percentage of personal income, both Connecticut and the New England region as a whole, are relatively low in public spending.

    Furthermore, according to the Census data (I think I’ve got the source correct on this one– The Tax Foundation? That might be it- sorry), Connecticut ranks first in per capita income, but 4th in per capita spending on government. That also backs up other conclusions that we are relatively efficient. I would point out that per capita spending on public employees is dependent on the prevailing wage and cost of living levels for the area and the state. Connecticut cannot pay Arkansas-level wages here and expect anyone to work for them. Whether public or private sector employees, they all must pay the going rate for housing, for utilities, for gasoline, for public transportation. And the state and municipalities must offer wages that attract workers, and cannot pretend that they will be staffed if alternative employment offers substantially more.

    I hope this satisfies ACR. I have responded, I have noted numerous sources for my data, and I would hope that readers will accept the factual bases for them. ACR might like to enlighten us as to the reason for his snarky remarks, and if he can offer other factual sources that refute my assertions, he can offer them to readers of this site.

    To Jack Dobb, I would point out that a recent study whose results were reported on in the New York Times concluded precisely the opposite. That there was no exodus of high earners from New York. I would also point out that there is a major problem with taxes in Connecticut, but it is with the Federal government. We rank 48th of the fifty states in our return on each dollar paid out to Washington. That deficit, at a time when the federal government is spending massively, is equivalent to roughly 7% of gross state product, using data from The Tax Foundation. That is an enormous hole in our economy. That cannot but damage any economy. Indeed, there is only a small handful of states that suffers a deficit with the federal government; most benefit from a net influx of federal cash.

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