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The long and winding road to cannabis legalization
BY Jan van Ours © voxEU.org

In many Western countries, between one quarter and one third of the population admit to having used cannabis at least once in their lives – according to the official statistics. This column provides an in-depth review of existing economic, social, and media evidence for and against legaliZation. It concludes that although there is of course uncertainty surrounding the long-term implications, prohibition is not working and it is time to legaliZe.

Although some countries have quasi-legaliZed cannabis use (the Netherlands), made cannabis available for medical purposes (California), or allowed the growing of a small number of cannabis plants for personal use (Australia), in most countries – the Netherlands included – cannabis supply, distribution, and use is prohibited (Reuter 2010). Nevertheless, in 2009, between 2.8% and 4.5% of the world population aged 15-64, corresponding to between 125 million and 203 million people had used cannabis at least once in the past year (United Nations Office on Drugs and Crime 2011).

Cannabis Use

The range cannabis in lifetime use is substantial from a low 21% in Sweden to a high 42% in the United States. The range in recent cannabis use is also substantial from a low 1% in Sweden to a high 14% in Italy. Finally, current use ranges from 1% in Sweden to 7% in Spain and the United States. What is also striking is the big difference between lifetime use and recent use. In the Netherlands for example 25% of the population aged 15 to 64 has ever used cannabis but only 7% has done so in the last year. Apparently, for a substantial part of the users, cannabis is not very addictive (see also Van Ours 2006 for details).

Clearly, prohibition does not work. Cannabis is the most popular illicit drug. The debate on legalisation of cannabis is gaining momentum. Caulkins et al (2012) mention seven motivations for creating a legal cannabis market:

• Raising tax revenues,

• Eliminating arrests,

• Undercutting black markets and associated harms from corruption and violence,

• Redirecting criminal justice resources,

• Assuring product quality,

• Increasing choices for those seeking intoxication, and

• Limiting youth access by better control.

The legalisation debate is often emotional with strong views on both sides. Those who support legalisation tend to ignore the negative health effects of cannabis use. Those opposed ignore the fact that legal substances such as alcohol and tobacco also have bad health effects (Hall and Lynskey 2009).

The Dutch example

The Netherlands has a cannabis policy that is closest to being legal although cannabis supply and distribution are prohibited; though using cannabis is not legal, it is decriminalised. The main aim of Dutch drug policy is to protect the health of individual users, the people around them, and society as a whole. Regulations on drugs are laid down in the Opium Act, which draws a distinction between hard drugs and soft drugs. Hard drugs are those substances which can seriously harm the health of the user and include heroin, cocaine, and synthetic drugs such as ecstasy. Soft drugs – ie the cannabis derivatives, marijuana and hashish – cause far fewer health problems. The possession of hard drugs is a crime. However, since 1976, the possession of a small quantity of soft drugs for personal use is a minor offence.

The expediency principle is applied to the sale of cannabis in ‘coffee shops’ in order to separate the users’ market for hard and soft drugs and to keep young people who experiment with cannabis away from hard drugs. The sale of small quantities of soft drugs in coffee shops is therefore technically an offence, but prosecution proceedings are only instituted if the operator or owner of the shop does not meet certain criteria. These criteria are that no more than five grammes per person may be sold in any one transaction, no hard drugs may be sold, drugs may not be advertised, the coffee shop must not cause any nuisance, no drugs may be sold to people under 18, and under-18s are not allowed into the premises. Moreover, the mayor may order a coffee shop to be closed.

According to MacCoun (2011) the Dutch coffee shop system may have been responsible for separating the soft and hard drug markets and rather than increasing the gateway from soft to hard drug use may have reduced this gateway (see also Van Ours 2003). According to Reuter (2010) commercialisation of sale in the Netherlands may have led to an increase in consumption but the increased access has not led to the Dutch population showing higher-than-average rates of cannabis use or longer cannabis-use careers. Korf (2002) indicates that the use of cannabis in the Netherlands shows trends that are very similar to those in other European countries that have not decriminalised cannabis.

Until the middle of the 1970s, coffee shops were largely absent from the Netherlands. Then their number increased rapidly to reach a maximum of about 1500 across the country in the early 1990s. From 2000 to 2009 the number of coffee shops decreased – in the four big cities (Amsterdam, Rotterdam, Utrecht, and The Hague) by 74, and in the rest of the Netherlands by 73. In 2009 in 101 of the Dutch municipalities out of the total of 441 municipalities there were one or more coffee shops (Bieleman and Nijkamp 2010). The reduction of the number of coffee shops has to do with closings near schools and a stricter policy against coffee shops that did not stick to the rules and regulations. In Amsterdam, for example, the number of coffee shops went from 283 in 2000 to 225 in 2009. In some municipalities close to the border all coffee shops have been closed to avoid ‘drug tourism’ from Belgium, France, and Germany, ie to ban foreign customers who buy cannabis in the Netherlands and take this across the border. According to Wouters et al (2010) there has been a shift in policy from a health perspective to a law-and-order perspective. They find that the presence of coffee shops in a municipality is more likely in large municipalities and municipalities with a left-wing local government while the number of coffee shops in a municipality is mainly determined by its population size.

Because supply and distribution of cannabis is still prohibited, policy in the Netherlands is in a twilight zone. Recently, measures have been implemented to reduce access to coffee shops. The plan is to transform the coffee shops to clubs for which one needs a permit to enter. The main idea of these permits is that they will prevent tourists from entering, thus making coffee shops local shops for local people.

California Proposition 19

According to Kilmer et al (2010) California has always been on the cutting edge of cannabis-policy reform. In 1975, California reduced the maximum sentence for possessing less than an ounce (28.35 grammes) of cannabis from incarceration to a small fine. In 1996, California allowed cannabis to be grown and consumed for medical purposes. California currently has over 1000 medical marijuana shops. In November 2010 California voted on whether cannabis should be legalised and taxed. The Californian Proposition on the 2010 ballot – the Regulate, Control, and Tax Cannabis Act, also known as Proposition 19 – would have fully legalised cannabis with respect to the Californian state law. It would not have prevented federal prohibition action. In theory, federal agents can take over low-level enforcement but in practice federal prosecutors would probably only deal with large quantities of cannabis.

Rosalie Pacula (2010) argues that the debate on cannabis legalisation in California is dominated by worries about health consequences as one fifth of all treatment admissions in the state is due to marijuana use. An increase in cannabis use may also cause an increase in health expenditures paid through taxes. So a priori it is not clear that there will be a net tax reduction if cannabis is legalised. However, she concludes that it is unlikely that a rise in the known health harms would lead to a large enough cost to taxpayers to offset the revenue gain from legalising and taxing – assuming that taxes are actually paid and not evaded. Kilmer et al (2010) provide estimates of the possible effects of legalising cannabis in California. Taking into account that their estimates have unknown confidence intervals they find that pre-tax retail price of cannabis will decrease, likely by more than 80%. The effect on consumer prices will depend on taxes but it is likely that consumption will go up. Tax revenues will increase but it is virtually impossible to indicate by how much. The savings on enforcing cannabis laws are also difficult to indicate. Caulkins et al (2012) take Proposition 19 as their inspiration to discuss legalisation design choices – ie the level of taxes and whether taxes should depend on cannabis levels, rules on home cultivation, advertising restrictions, and design adjustments over time. They argue that taxes should be sufficiently high to discourage cannabis use and sufficiently low to drive out illegal supply. Furthermore, taxes should depend on cannabinoid levels, home cultivation should be allowed under restrictions, and advertising should be banned. The most important design choice of legalisation is the flexibility to adjustment, allowing for learning by doing.

Proposition 19 was narrowly rejected with 53.5% of the voters voting against the proposal.
Health effects of cannabis use

Worries about cannabis often relate to the connection between cannabis use and crime. Little is known about the subject but cannabis-induced crime by users seems to be limited (organised crime is however heavily involved in supplying cannabis use). Furthermore, there is a discussion about whether cannabis use induces the use of hard drugs, but this ‘stepping-stone’ effect seems to be absent or small (Van Ours 2003). People mainly worry about the health effects of cannabis use. Nevertheless, in the grand scheme of risky health behaviours cannabis use has a modest contribution (Cawley and Ruhm 2011).

From a meta-analysis, Degenhardt et al (2003) conclude that there seems to be a modest but significant association between heavy use of cannabis and later depression. In their overview study, Arseneault et al (2004) conclude that rates of cannabis use are approximately twice as high among people with schizophrenia as among the general population. Hall and Degenhardt (2009) argue that previous research on the relationship between mental health and illicit substance use comes almost entirely from epidemiology. The results from this research are mixed, with some papers reporting a positive association between cannabis use and mental health problems and others reporting no association. Discussing a variety of papers Werb et al (2010) conclude that the research to date is insufficient to conclusively claim that the association between cannabis use and psychosis is causal in nature.

In examining the relationship between mental health and cannabis use, the literature cited above has attempted to identify the causal effect of cannabis use by controlling for observed factors that may be a source of confounding. However, as noted by Pudney (2010), the potential for unobserved common confounding factors makes inference regarding the causal impact of cannabis use difficult. Nevertheless, recent evidence suggests that there is a negative causal effect of cannabis use on health (Van Ours and Williams 2011a and 2011b).

All of the linkages to assess the health effects of legalisation have one element in common: uncertainty. Therefore, opinions of people with personal experience of cannabis use may be helpful. From an analysis of Australian data it appears that past cannabis users are more in favour of legalisation than non-users. Apparently for individuals with personal experience the personal benefits of legalisation are more important than the personal costs (Williams et al 2011).
The long and winding road

Caulkins et al (2011) argue that prohibition of rarely used substances is easier to implement than prohibition of widely used drugs. This also applies in reverse. Legalisation of a frequently used drug such as cannabis will have smaller effects on use than legalising a less frequently used drug such as cocaine. However, the discussion about legalisation of cannabis is hampered because even simple effects are not clear in terms of their magnitude. It is most likely that cannabis prices will go down and cannabis use will go up. But whether this will induce negative health effects depends on whether the increase in use will be at the intensive margin as well as the extensive margin. Criminal activities, predominantly those by suppliers, will be reduced. Whether the benefits of legalisation outweigh its costs will also depend on design choices.

There are many relationships about which researchers are uncertain, debating whether they are causal or mere associations. Removing the veil of ignorance that surrounds the legalisation debate requires much more research effort. However, researchers rarely agree, and even if they would agree it is doubtful whether that would convince politicians to go ahead with cannabis legalisation. Doing further research and hoping that an evidence-based cannabis policy will emerge is wishful thinking. Rather than muddling through for several decades it would be wise to start moving on the long and winding road to cannabis legalisation.

The health effects of cannabis use should not be ignored. Clearly, it is healthier not to use cannabis at all. Nevertheless, the health effects should not be exaggerated either. If alcohol use and smoking cigarettes are accepted, albeit under restrictions, then so should cannabis use. There are clear advantages to legalisation. Legalisation would make life more comfortable for cannabis users, remove criminal organisations from the scene, allow for the possibility of quality control, provide governments with tax revenues and make it possible for researchers to collect empirical evidence. In short, it is time for politicians to walk down the legalisation road “to boldly go where no man has gone before” (Van Ours 2012).

References

Bieleman B and N Nijkamp (2010), Coffeeshops in Nederland 2009, Intraval, Rotterdam.

Caulkins JP, B Kilmer, RJ MacCoun, RL Pacula and P Reuter (2012). “Design considerations for legalizing cannabis: Lessons inspired by analysis of California’s proposition 19”, Addiction, 106, forthcoming.

Cawley J and C Ruhm (2011). “The economics of risky health behaviors”, NBER Working Paper No. 17081.

Degenhardt L, W Hall, and M Lynskey (2003), “Exploring the association between cannabis use and depression”, Addiction, 98:1493-1504.

Hall W and L Degenhardt (2009), “The adverse health effects of non-medical cannabis use”, Lancet, 374:1383-1391.

Hall W and M Lynskey (2009), “The challenges in developing a rational cannabis policy”, Current Opinion in Psychiatry, 22:258-262.

Kilmer B, JP Caulkins, RL Pacula, RJ MacCoun, and PH Reuter (2010), “Altered State?”, Occasional Paper Rand.

Korf DJ (2002), “Dutch coffee shops and trends in cannabis use”, Addictive Behaviors, 27:851-866.

MacCoun RJ (2011), “What can we learn from the Dutch cannabis coffeeshop system?”, Addiction, 106:1899-1910.

Pacula RL (2010), “Examining the impact of marijuana legalization on harms associated with marijuana use”, RAND Working Paper WR-769-RC.

Pudney S (2010), “Drugs policy -– what should we do about cannabis?”, Economic Policy, 61:165-211.

Reuter P (2010), “Marijuana legalization: what can be learned from other countries?”, RAND Working Paper WR-771-RC.

United Nations Office on Drugs and Crime (2011), World Drugs Report, United Nations, New York.

Van Laar MW (2011), Nationale Drug Monitor, Trimbos-Instituut, Utrecht.

Van Ours JC (2003), “Is cannabis a stepping-stone for cocaine?”, Journal of Health Economics, 22:539-554.

Van Ours JC (2006), “Dynamics in the use of drugs”, Health Economics, 15:1283-1294.

Van Ours JC (2012), “The long and winding road to cannabis legalization”, Addiction, 107, forthcoming.

Van Ours JC and J Williams (2011a), “Cannabis use and mental health problems”, Journal of Applied Econometrics, 26:1137-1156.

Van Ours JC and J Williams (2011b), “The effects of cannabis use on physical and mental health”, CEPR Discussion Paper No. 8499.

Werb, D, B Fischer, and E Wood (2010), “Cannabis policy: time to move beyond the psychosis debate”, International Journal of Drug Policy, 21:261-264.

Williams J, JC Van Ours, and M Grossman (2011), “Why do some people want to legalize cannabis use?”, NBER Working Paper No. 11-07.

Wouters M, A Benschop and DJ Korf (2010), “Local politics and retail cannabis markets: the case of Dutch coffeeshops”, International Journal of Drug Policy, 21:315-320.

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SEIU 32BJ is is a union of janitorial staff and security guards. They clean and keep safe buildings all over Fairfield County and Connecticut, such as UBS, RBS and People’s banks, and Perdue Pharma. 4,000 of their members are in a fight for a new contract right now, and the issues are pretty basic:

• More full-time jobs, and less-part time work with no benefits or security
• Cost of Living pay increase – these are jobs that pay on average $12.50/hour – not nearly enough to live on in Fairfield county!

Please stand with these members, as they fight for fair pay to support themselves and their families.

Meet-up:

The Unitarian Universalist Society
20 Forest Street, Stamford
Dec 15, 4:30 pm

March will be down Atlantic Street to Tresser Blvd, about a 12-minute walk.

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By: Dr. Jan Eberly Assistant Secretary for Economic Policy

Last week Congress missed an opportunity to support economic growth and job creation by failing to pass President Obama’s proposal to extend and expand the employee-side payroll tax cut, cut payroll taxes in half for every small business, and eliminate payroll taxes on increases in business payrolls.

If Congress does not pass measures that support the economy by the end of this year, fiscal policy is expected to be a substantial drag on growth in 2012, as the payroll tax and extension of unemployment insurance benefits put in place last December expire and support from the Recovery Act continues to recede. Private forecasters estimate that these factors will subtract between 1 and 2 percentage points from GDP growth in 2012. The impact on growth in the first quarter could be even greater. At this critical juncture, the U.S. economy should not be subjected to such a strong, self-induced headwind.

While there is a nearly complete consensus among economists and budget analysts that deficit reduction sufficient to stabilize our debt would have significant long-run economic benefits, the literature also cautions that fiscal consolidation is contractionary in the short run. Though under certain conditions the withdrawal of fiscal support can be partially offset by economic and policy changes, those conditions do not prevail in the United States today. Interest rates are currently at historic lows, leaving little room for them to go lower, and though exports have grown at a healthy pace recently, they cannot be counted on to grow enough to offset substantial near-term cuts.

The economy is improving at a gradual pace. That said, the recovery is far from complete, the unemployment rate remains unacceptably high, and we face significant downside risks to growth. Throughout history, a common mistake in the wake of financial crises is to withdraw support too soon. Even simply extending the existing payroll tax holiday and emergency unemployment insurance program will merely keep us in place. That is not enough. Though phased in deficit reduction in the medium term is needed, it must be combined with aggressive support for the economy right now.

Impact of Fiscal Consolidation on Near-Term Growth

While the economy has expanded for nine consecutive quarters, recent growth has not been fast enough to substantially bring down unemployment. GDP growth picked up from an annual rate of about ¾ percent in the first half of the year to 2 percent in the third quarter, but economic activity last quarter was boosted by the waning of factors that temporarily held down growth earlier in the year, including the jump in oil prices and the reduction in motor vehicle production due to the crisis in Japan. For 2011 as a whole, growth may very likely be below 2 percent and private forecasters project GDP to rise at about a 2 percent pace through 2012.

Some politicians have argued that in order to jumpstart growth, the United States needs to make a serious down payment on deficit reduction. However, fiscal consolidation is typically contractionary in the short run, boosting growth only in the long run. In a variety of standard economic models, government support boosts output by increasing demand, desired hours of work and the optimal capital stock (see for example the discussion in Ramey, 2011).[1] However, in the long run, larger deficits result in higher interest rates and dampened output. A reduction in government support operates similarly, but in the reverse direction, putting a drag on the economy in the short run. In the U.S. context, the impending withdrawal of fiscal impetus occurs at a time when there is little capacity for other changes in the economy that might offset it. Meanwhile, we face immediate and significant risks to the already modest growth projections for 2012.

The view that fiscal consolidation is contractionary in the near term is supported by broad empirical research, including a recent study by the IMF that focused on the experiences of 15 advanced economies from 1980 to 2009. The IMF found that a fiscal consolidation equal to 1 percent of GDP typically reduces GDP by ½ percentage point over the first two years and increases the unemployment rate by ¼ percentage point (Figure 1). To put this in perspective, the reduction in federal support that would occur if Congress allows the payroll tax holiday and emergency unemployment benefits to expire is roughly equivalent to 1 percent of GDP.

Figure 1.
Impact of a 1 Percent of GDP Fiscal Consolidation on GDP and Unemployment

Economic Changes That Can Offset the Effects of Fiscal Consolidation

As the IMF study highlights, the reduction in government support can be offset by a number of factors such as an increase in confidence and a reduction in interest rates, driven by the increase in national saving and reduction in risk that accompanies a decline in the deficit. The decline in interest rates promotes domestic and external demand, as well as investment, supporting growth to help offset the fiscal consolidation.

Figure 2.
Response of Interest Rates to a 1 Percent of GDP Fiscal Consolidation

Source: IMF staff calculations.
Note: t = 1 denotes the year of consolidation. Dotted lines equal one standard error bands.

Some commentators with enthusiasm for near-term cuts cite a recent paper by Alberto Alesina and Silvia Ardagna (2010),[2] which argues for a dominant role for these potential mitigating factors. However, as the IMF has noted, their definition of fiscal consolidation has serious limitations.[3] For instance, their sample omits the 2009 adjustment instituted in Ireland, which amounted to 4.5 percent of GDP because house prices collapsed that year thus increasing the primary budget deficit. While it is always tricky to disentangle changes in fiscal policy from the economic environment in which they are conducted, omitting examples like this reduces the applicability of the sample. In another case, Alesina and Ardagna included an episode that occurred in Japan in which the government made a one-time capital transfer to the railways amounting to 4.8 percent of GDP in 1998 and then in 1999, in the absence of such a transfer, the budget balance improved mechanically without a government spending cut. This is not a case of fiscal consolidation as we would normally think of it and biases the results in favor of finding expansionary consolidations. Even with these limitations, the study found that only about 1/5 of fiscal consolidations were in fact expansionary. This is consistent with the possibility that offsetting factors can potentially lessen the impact of a consolidation as pointed out by the IMF study, but suggests it is an unlikely result.

The United States’ Ability to Offset Negative Effects of Fiscal Consolidation is Limited

Given today’s economic realities, the United States is unlikely to benefit from many of the factors that could potentially attenuate the negative impact of a fiscal consolidation. We already face a large gap between actual and potential GDP, which would be exacerbated by a reduction in fiscal support (Figure 3).

Figure 3.

Source: Bureau of Economic Analysis and Treasury calculations.

In addition, much of the potential mitigating effect of fiscal consolidation is driven by lower interest rates. However, the yield on the 10-year Treasury bond is around 2.0 percent, already extraordinarily low by historical standards (Figure 4). This suggests that any gain in confidence from an improved fiscal outlook is unlikely to translate into still lower interest rates in the near term.

Figure 4.

Source: U.S. Treasury

A final way to offset fiscal consolidation would potentially come through a significant increase in exports, allowing for foreign demand for goods and services to fill in the gap left by lower domestic demand. Since their trough during the financial crisis, exports have grown by 23 percent in real terms and have been a significant part of the economic recovery to date. However, given the challenges to growth globally, especially in advanced economies that are key trading partners, the United States cannot count on further increases in the demand for our exports from overseas markets to materially offset large-scale fiscal consolidation.

Conclusion

The United States faces modest growth projections for next year with substantial downside risks and has limited scope to offset the withdrawal of fiscal support. Given these realities, we must act by the end of the year to strengthen growth and job creation in 2012.

[1] Ramey, Valerie A. (2011) ”Can Government Purchases Stimulate the Economy?” Journal of Economic Literature 49:3, 673-685
[2] Alberto Alesina and Silvia Ardagna, “Large Changes in Fiscal Policy: Taxes Versus Spending,” Tax Policy and the Economy, vol. 24, ed. Jeffrey R. Brown (Cambridge, MA: National Bureau of Economic Research).
[3] “Will It Hurt? Macroeconomic Effects of Fiscal Consolidation”. Chapter 3 of the IMF’s October 2010 World Economic Outlook. “Cutting Edge. Does fiscal austerity boost short-term growth? A new IMF paper thinks not” The Economist, September 30th 2010.

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A groundbreaking new study, “Medical Marijuana Laws, Traffic Fatalities, and Alcohol Consumption” shows that laws legalizing medical marijuana have resulted in a nearly nine percent drop in traffic deaths and a five percent reduction in beer sales. The study is entitled,It can be found at:

“Our research suggests that the legalization of medical marijuana reduces traffic fatalities through reducing alcohol consumption by young adults,” said Daniel Rees, professor of economics at the University of Colorado Denver who co-authored the study with D. Mark Anderson, assistant professor of economics at Montana State University.

The researchers collected data from a variety of sources including the National Survey on Drug Use and Health, the Behavioral Risk Factor Surveillance System, and the Fatality Analysis Reporting System.

The study is the first to examine the relationship between the legalization of medical marijuana and traffic deaths.

“We were astounded by how little is known about the effects of legalizing medical marijuana,” Rees said. “We looked into traffic fatalities because there is good data, and the data allow us to test whether alcohol was a factor.”

Anderson noted that traffic deaths are significant from a policy standpoint.

“Traffic fatalities are an important outcome from a policy perspective because they represent the leading cause of death among Americans ages five to 34,” he said.

The economists analyzed traffic fatalities nationwide, including the 13 states that legalized medical marijuana between 1990 and 2009. In those states, they found evidence that alcohol consumption by 20- through 29-year-olds went down, resulting in fewer deaths on the road.

The economists noted that simulator studies conducted by previous researchers suggest that drivers under the influence of alcohol tend to underestimate how badly their skills are impaired. They drive faster and take more risks. In contrast, these studies show that drivers under the influence of marijuana tend to avoid risks. However, Rees and Anderson cautioned that legalization of medical marijuana may result in fewer traffic deaths because it’s typically used in private, while alcohol is often consumed at bars and restaurants.

“I think this is a very timely study given all the medical marijuana laws being passed or under consideration,” Anderson said. “These policies have not been research-based thus far and our research shows some of the social effects of these laws. Our results suggest a direct link between marijuana and alcohol consumption.”

The study also examined marijuana use in three states that legalized medical marijuana in the mid-2000s, Montana, Rhode Island, and Vermont. Marijuana use by adults increased after legalization in Montana and Rhode Island, but not in Vermont. There was no evidence that marijuana use by minors increased.

Opponents of medical marijuana believe that legalization leads to increased use of marijuana by minors.

According to Rees and Anderson, the majority of registered medical marijuana patients in Arizona and Colorado are male. In Arizona, 75 percent of registered patients are male; in Colorado, 68 percent are male. Many are under the age of 40. For instance, 48 percent of registered patients in Montana are under 40.

“Although we make no policy recommendations, it certainly appears as though medical marijuana laws are making our highways safer,” Rees said.

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The northeastern United States was struck by an unusual pre-Halloween snowstorm on October 29, 2011. The wet snow – more than 12 inches in some areas — stuck to the still leaf-laden trees bringing down limbs, branches and, in some cases, full trees. Fallen trees caused substantial damage to power lines, including some transmission lines, and blocked roads. More than 3 million electric utility customers lost power in the region. Eight deaths related to the snowstorm were reported in Connecticut. The snowstorm and power outage resulted in significant economic losses in Connecticut.

North Central Connecticut was hit especially hard, challenging the capabilities and coordination of electricity providers and public sector response. Almost 70 percent of Connecticut Light and Power’s (CL&P) 1.2 million customers, lost power. Customers of The United Illuminating Company (UI), serving the coastal area, were not hit as hard, with a total of 52,000 of its 350,000 customers affected at some time during the outage.

The Connecticut October 2011 Snowstorm Power Restoration Report provides an independent assessment of the preparedness, response, and restoration efforts and offers recommendations for how capabilities to address such events can be improved.

The October 2011 snowstorm resulted in 809,097 CL&P customers being without power at some time during the 11-day outage; many suffered multiple outages. The duration of the power outage in some of the most heavily impacted areas caused inconvenience and frustration among the public and municipal officials. Community frustration was exacerbated by CL&P’s communications with the general public and state and local officials.

This report provides a brief summary of the outage event, describes the methodology used to create this expedited evaluation, and presents key findings and recommendations for improving power restoration response. It is intended to provide a basis for further examination of key issues and improvement planning by the state, municipalities and utility providers. Although the performance of both CL&P and UI were reviewed and summarized here, the primary focus of this effort is on the CL&P service territory.

The October snowstorm resulted in the largest restoration effort in CL&P’s history. Despite the length and extent of the service outages, and the effect on customers in the affected service areas, there were successes in CL&P’s power restoration effort. The company’s internal forecast model accurately predicted power would be fully restored by Wednesday, November 9, although an unprecedented army of mutual aid workers from other utilities was required to do so. No serious injuries or deaths were reported associated with the restoration effort. Municipalities reported that power restoration crews, once they arrived in their communities, generally functioned well and efficiently. Stakeholders also praised the assistance from power company customer service representatives in answering phone lines in a timely fashion, with an average wait time of less than
45 seconds.

UI outages were smaller in number and in proportion to their total customers. After the October snowstorm, all UI customers were restored by the night of Wednesday, November 2. this is frequently not the case in such a wide-scale event. CL&P’s recently created Town Liaison program, while not completely successful in its implementation, is recognized as positive in concept.

Findings:
• CL&P was not prepared for an event of this size. The worst-case scenario in the company’s emergency response plan considered outages over 100,000 customers, or less than 10 percent of their total customer base. More than two-thirds of its customers lost power as a result of the October snowstorm.
• Preparedness, including planning, training, and exercise, for a widespread power outage and/or infrastructure damage event is inadequate across all sectors.
• CL&P did not lean forward by pre-staging adequate restoration resources in advance of the October 29 snowstorm; this delayed the recovery effort in the first days.
• As is the case with most electric utilities, CL&P is dependent on contractors and mutual aid from other utilities to address a large-scale outage. Several factors contributed to initial delays in auxiliary staffing for this event. The company was able to almost fully restore power by Wednesday, November 9, by bringing in thousands of crews later in the event.
• CL&P developed an internal stretch goal to restore power to 99 percent of all customers by Sunday, November 6. Without vetting internally, the company announced this date as a public performance commitment. This announcement, and a subsequent commitment to restore 99 percent of all customers in each of 149 municipalities by November 6, unnecessarily contributed to increased customer frustration and challenges for municipal governments.
• Northeast Utilities (NU), CL&P’s parent company, did not provide sufficient executive leadership during this restoration effort, allowing one individual to oversee the restoration effort, serve as the primary liaison at the state Emergency Operations Center, and be the public spokesperson.
• When power was restored for individual customers, CL&P’s real-time situational awareness and ability to communicate restoration status to customers, was delayed by as much as 12 hours as data was not updated in the system until crews returned from their shifts. This hampered coordinated decision-making and accurate communication regarding power restoration activities.
• Although a good idea in concept, CL&P’s Town Liaison program had not been fully developed at the time of the snowstorm and was not consistently effective in providing a conduit for accurate information between the company and municipal governments, and, in some cases, undermined the company’s credibility with local officials.
• CL&P crews and public sector response and emergency management entities in Connecticut generally use radio systems for response communication in the field that are not compatible with each other.
• While vital to provide needed capabilities, use of external mutual assistance and contract crews presents communication, reporting, and tracking challenges because they often do not have the same communications or field reporting technology as used by local crews.

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The younger the parent and the younger the child, the more likely a family is to be poor, according to a new Child Trends report, Two Generations in Poverty: Status and Trends among Parents and Children in the United States, commissioned by Ascend: The Family Economic Security Program at the Aspen Institute. As policy makers ponder the merits of alternative measures of poverty, the Child Trends report outlines the disproportionate effects of poverty on young children, young parents, and children and parents in single-mother families.

Among the report’s highlights:
• The younger the parent, the more likely a family is to be poor. Households headed by young parents (18-24) are more likely to be poor than households headed by older parents, regardless of marital status.
• The younger the child, the more likely a family is to be poor. Families with young children (0-6) are more likely to be poor than families with older children.
• Overall poverty rates mask much higher rates for some sub-groups, such as single-mother families, whose poverty rate was 40.7 percent in 2010, compared to 8.8 percent for married-couple families.

The Child Trends report also summarizes the large body of research establishing the association between poverty and negative outcomes for adults, including parents, and for children. For parents, the negative effect of poverty extends beyond material hardships and basic needs, and is associated with increased mental health problems and difficulties in parenting. Among children, the effects of poverty are potentially even more pervasive and lasting. Children experiencing early, deep, or persistent poverty are especially likely to experience long-term, deleterious effects on their development and life circumstances, such as increased economic hardships as adults.

This brief draws on data from the U.S. Census Bureau, and focuses a two-generation lens on poverty rates and low-income status among children and parents. In addition, it presents data on differences across race, age, family structure, gender, education, employment status and geography.

“Poverty can have a toxic effect on children and parents,” Child Trends’ President, Carol Emig, said. “This report illustrates that poverty is particularly prevalent for children and adults at vulnerable periods in their lives – in the critical early years of childhood, when development is occurring at a rapid pace, and in the often challenging transition to adulthood, when young women and men are starting families and trying to establish independent households.”

“With single parents, especially women, and their children experiencing unprecedented rates of poverty, the country is at risk of losing the next generation,” Ascend Executive Director, Anne Mosle, said. “Given the impact of poverty on young families in particular, this report underscores the need for solutions that address opportunities for parents and their children together, particularly in the area of education. To ensure the next generation is on the path to success, their parents must also be on a path toward economic security.”

Child Trends is a nonprofit, nonpartisan research center that studies children at all stages of development, across all major domains, and in the important contexts of their lives. Our mission is to improve outcomes for children by providing research, data, and analysis to the people and institutions whose decisions and actions affect children.

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ConnCAN has released report cards for the 2010-2011 school year, in which more than 1,000 Connecticut schools and corresponding districts received letter grades based on student academic performance.*

The report cards grade schools and districts across the state using students’ Connecticut Mastery Test (CMT) and Connecticut Academic Performance Test (CAPT) performance in four categories: 1) overall student performance; 2) performance gains (e.g., this year’s fifth graders compared to their performance last year as fourth graders); 3) student subgroup performance; and 4) achievement gap. This is the sixth year ConnCAN has released such report cards.

Click here to find a report card for any school or district in Connecticut.

Earlier this month, the National Assessment Governing Board released 2011 fourth and eighth grade reading and math performance on the National Assessment of Educational Progress (NAEP), also known as the Nation’s Report Card. According to NAEP, the Nutmeg State continues to have the nation’s largest achievement gap on average. Connecticut’s achievement gap was the largest in seven of 16 categories measured and had one of the top five largest gaps in 14 of the 16 reported categories.

“As we enter what Governor Malloy has dubbed ‘the year of education reform,’ it is more important than ever that we continue to demand full accountability and transparency in Connecticut’s public schools,” said ConnCAN CEO Patrick Riccards. “ConnCAN’s school report cards, Top 10 lists, and Success Story Schools honors give policymakers, practitioners, parents, and taxpayers invaluable information about the performance of all of our public schools. This analysis allows us to have an honest conversation about where we stand and where we need to go from here if we are serious about providing all Connecticut children access to great public schools.”

ConnCAN’s 2011 Success Story Schools are schools that have a combined low-income and minority population of at least 75 percent and at least one subgroup of students (African-American, Hispanic, or low-income) outperforming the state average performance for all students at that school level. This year, 24 schools (14 elementary, nine middle, and one high school) were recognized as ConnCAN Success Story Schools.

Click here to review ConnCAN’s Success Story Schools list.

“As noted in ConnCAN’s analysis of this year’s CMT and CAPT scores, Connecticut as a state continues to struggle with enormous achievement gaps and lagging performance for low-income and minority students,” Riccards said. “But we are seeing pockets of success, where policymakers, educators, and parents are coming together to create exceptional schools that are beating the odds. ConnCAN Success Story Schools honor celebrates that academic progress, showing what is possible and serving as bright spots for state leaders and educators to look to as they develop their education reform agenda.”

ConnCAN also released Top 10 lists of schools in each of five categories: performance gains and improvement (measured in percentage point change), and low-income, African-American, and Hispanic student performance (measured in percent of students at or above goal) for elementary, middle, and high schools.

Click here to review ConnCAN’s Top 10 lists.

*Note: ConnCAN uses the “goal” standard on the CMT and CAPT to set the bar for rating schools because it is the state’s best estimate of students meeting or exceeding grade level expectations. According to the State Department of Education, a student scoring at the “goal” level has the knowledge, skills, and critical thinking abilities that are “reasonable to expect of students” within their grade level.