Community Overview

January, 2004

The effects of the downturn in the economy on Austin and Travis County

Local economic indicators over the past two months appear to be looking up. Incremental economic growth is accompanied by a continued downward trend in unemployment. The unemployment rate for Travis County has steadily declined since June, and many local businesses appear poised for recovery. However, demand for most social services, including basic needs and medical assistance continues to rise. Legislative cuts to Medicaid and CHIP funding will have an impact on the number of people enrolled in the programs in Travis County in the coming year.

EMPLOYMENT:

• In Travis County, the unemployment rate continued the downward trend that began in June, dropping to 4.9% in November, from 5.1% in October. The number of people working increased from October (494,572) to November (496,092), and the unemployment rate is now at levels not seen since May of 2001 (TWC).
  

In the Greater Austin area, 5,222 people were laid off between January 1 and December 31 in 2003, down from 6,732 people in 2002, and 18,841 people in 2001 (WorkSource - Greater Austin Area Workforce Board). Nationally, the number of people filing first-time applications for state unemployment benefits declined to 339,000, the lowest level in almost three years. The number of people continuing to collect state jobless benefits rose to 3.31 million in the week that ended Dec. 20 from 3.23 million a week earlier. However, the four week average of continuing claims dropped to 3.29 million, the lowest since the week that ended September 22, 2001.

• In a recent national study of employment trends expected for January through March of 2004, 20% of employers expected to increase hiring, while 13% expected to reduce job levels (67% expect to remain the same or did not know at the time of the survey). Expected employment trends for the region including Texas were similar, with 20% of employers expecting to increase hiring, and 11% expecting to reduce staff levels (Manpower).
• Local businesses report mixed employment trends:
  • The new Hilton Austin hotel plans on hiring about 500 new employees.
  • Progressive will be adding 148 jobs to its workforce in Austin.
  • SBC announced that it will cut another 2% of its work force, or roughly 3,000 to 4,000 positions. The cuts are not expected to have a strong impact on its Austin workforce.
  • Harcourt Inc. is adding 70 jobs to the local economy (Austin American-Statesman).
• Between the third quarter of 2002 and the third quarter of 2003, employment growth for the city of Austin ranked 20th among 100 cities studied in a national report issued in December (Austin Business Journal).
• Nationally, there were 339,000 new unemployment filings for the week ending December 27th. That is 15,000 fewer than the previous week, which is within the range expected for a growing economy. According to a Reuters poll, 125,000 new jobs were created in December, accelerating from 57,000 reported in November (Reuters).
• Nationally, the earnings gap between women and men has not shrunk in two decades. Women earn about 20% less than men, even accounting for factors such as marital status and hours worked (Austin American-Statesman).
• A recent study revealed that 11% of federal contract employees receive wages that keep them below the federal poverty level. Many of these workers, paid by government contracts with the businesses they work for, end up turning to government funded services such as food stamps, housing assistance, and other programs to make ends meet (The Austin Chronicle).

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ECONOMY:

LOCAL

• Foreclosure postings for Travis and Williamson Counties were down for December, at 545 houses. This follows a drop in November postings (560 houses) from the 603 houses posted in October. However, foreclosure postings are still nearly three times as high as they were in January of 2001 (Austin American-Statesman).
• The Austin Purchasing Manager’s index hit 73.7 in November, the highest level since December of 2001. A level higher than 50 signifies growth (Austin American-Statesman).
• Local businesses show signs of economic recovery:
  • Financial Industries Corp. lost $3.7 million in the third quarter, with revenue for the first quarter falling 9% to $28 million
  • Dell shares rose 8 cents in December
  • GSD&M’s billings are up 15% this year compared to last, to an all-time high of $1.3 billion (Austin American-Statesman).

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STATE

Statewide sales tax collection to the general fund increased for the three consecutive months of September, October and November compared to last year’s collections. Sales tax for November was $13,568 million, up 4.3% from November of 2002. This follows a 3.6% increase in sales tax in October over the same month of 2002 (Texas Comptroller of Public Accounts).

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NATIONAL

• The manufacturing sector expanded in December for the sixth consecutive month at the fastest rate in two decades. The index registered at 66.2, after a reading of 62.8 in November, up from 57 in October, with any index above 50 signaling expansion (Austin American-Statesman).
• Consumers spent $322.4 billion in November, a .4% increase compared with October. However, this did not meet the 7% increase many economists had forecasted (Austin American-Statesman).
• The consumer confidence index was at its highest level in 14 months in November at 92.5, but slipped again in December to 91.3 (Austin American-Statesman).
• A 3.1% decline in orders for manufactured durable goods in November followed a 4% increase in October (U.S. Department of Commerce).
• Consumer debt has more than doubled in the past 10 years to a record $1.98 trillion in October, according to the most recent figures from the Federal Reserve. That debt -- which includes credit cards and car loans, but not mortgages -- translates to about $18,700 per household. At the same time, the government says the nation's savings rate dropped to just 2% of after-tax income in the first half of the year (Austin American Statesman).

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DEMAND INDICATORS:

Basic Needs:

• In fiscal year 2003 (ending September 31), less people sought assistance from Travis County to pay their utility bills, 1,192 people in 2003 compared to 1,217 in 2002. However, demand for assistance with rent increased, as 4,836 families sought assistance with rent in 2003, compared to 4,296 in 2002. Less people sought assistance with food in 2003, 1,823 compared to 2,137 in 2002. Travis County Health and Human Services & Veterans’ Service is the largest provider of basic needs services in Travis County (Travis County Health and Human Services & Veterans’ Service).
• In 2003, 2-1-1, an information and referral service of United Way Capital Area, reported a 25% increase in the number of calls from people seeking social services from 2002 to 2003. At the year end, they reported the following increases calls from 2002 totals: a 16% increase in calls for utility assistance, a 26% increase for food pantry assistance, a 57% increase for mental health counseling, and a 40% increase in people inquiring about low-cost/subsidized housing options (2-1-1 Texas).

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Housing:

• Nationally, the number of people a month or more late on their home mortgage payments fell to 4.28% for three months ending in September, the biggest quarterly drop in almost 14 years after the highest rates in years. Mortgage delinquencies stood at 4.62% in the second quarter (Austin American-Statesman).
• The number of foreclosure postings in Travis and Williamson Counties dropped to 545 for the December foreclosure auction. The postings for November were 560, down from 603 in October (Austin American-Statesman).
• The interest rate for a home mortgage loan ended the year exactly where it started, at 5.85%. The lowest rate for the year was 5.21 percent in mid-June, also the lowest level recorded in 40 years (Austin American-Statesman).
• Texas homeowners, who pay the highest homeowner insurance premiums in the nation, face rising rates. Rates have increased more than 10% in Travis County since 2002. The average annual insurance premium for a person with good credit is $623.58, or 10.5% higher than the $564.41 paid for the same insurance in 2002 (Austin American-Statesman).
• Recent research on national housing trends revealed that in order for a household to afford a two-bedroom apartment the occupant(s) must earn a total of $15.21 an hour. This represents a 37% increase over what someone had to make in 1999 to afford an apartment ($11.08 per hour). In addition, 14.3 million Americans (nearly one in seven) spend more than half of their incomes on housing, a 67% increase from 1997. Housing costing more than one-third of total income is considered to be unaffordable by the U.S. Department of Housing and Urban Development (Campaign for Housing and Community Development Funding).

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Physical and Mental Health:

• People in the Austin area are having an increasingly difficult time accessing medical care. It is difficult for patients to obtain timely follow-up appointments at the 12 Austin-Travis County Community Health Clinics (CHC) due to many more requests for appointments than are available. In addition, safety net clinics such as People's Community Clinic turns patients away when they reach capacity, and turns away requests for acute care appointments at the rate of about 200 per week. From Fiscal Year 2001 to Fiscal Year 2003, The Community Health Clinics saw a 73% increase in the enrollment of uninsured patients who are not eligible for Medicaid or other public medical benefits (Austin-Travis County Community Health Centers).
• The City/County Medical Assistance Program (MAP) saw a 53% increase in enrollment from FY 01 to FY 03. The program provides health benefits to low-income residents who aren't eligible for Medicaid. The MAP call center has recently had peak call volumes of 800 calls per hour. The CHC call center typically refers over 150 callers to the ER each month because they have no appointments available (Austin-Travis County Community Health Centers).

Because of legislative cuts implemented in the fall of 2003, enrollment in the Children’s Health Insurance Program (CHIP) has decreased 27%, from 12,592 to 9,949 since August (Insure-A-Kid). The Texas Department of Health ordered 365,000 doses of flu vaccine at the beginning of the season, which were depleted by December. The State got 10,270 additional doses of flu vaccine in December for the Texas Vaccines for Children Program. The vaccines will be given to children at risk of developing influenza complications. Flu shots given by the Austin/Travis County Health and Human Services Department at the end of December were limited to children and adults 65 years and older due to tight supplies (Austin American-Statesman).

• In Travis, Williamson, Hays Bastrop and Caldwell, new HIV cases rose 36% from 265 cases in 2001 to 359 in 2002. African Americans are affected by HIV at much higher rates. In Travis, Williamson, Bastrop, Caldwell and Hays there were 4,813 people living with HIV/AIDS, including 3,921 who reside in Travis County. In Texas, new cases of HIV rose 20% from 3,940 reported infections in 2001 to 4,731 in 2002 (Austin American-Statesman/Austin Travis County Health and Human Services Department).
• The prevalence of youth with disabling mental health conditions in juvenile corrections is conservatively estimated at 32%. This finding is notably higher than the prevalence of disabilities among school-age children in the United States, which is about 9%. Up to 12% of incarcerated youth are labeled with mental retardation, and attention deficit hyperactivity disorder (ADHD) is four to five times more prevalent in correctional facilities than in schools (U.S. Department of Education/ The National Council on Disability).
• A recent study reported that Texas is one of 12 states not well prepared for bioterrorism or other public health emergencies. Texas met only four of 10 readiness indicators, including a plan for dealing with a flu pandemic (Austin American-Statesman).
• A study by the U.S. government showed a marked decline in the number of teen-agers using illegal drugs. Drug use fell by 11% among high school age students over the past two years (Austin American-Statesman).
• Nationally, health care spending for privately insured U.S. residents increased 8.5% in the first half of 2003 from the same period last year, representing the lowest rate of increase since 2000. The portion of medical costs for the privately insured that cover prescription drugs and hospital outpatient spending rose in the last half of this year, but rose at a slower rate than the year prior (Reuters).
• Project Access, started in November of 2002 by the Indigent Care Collaboration and the Travis County Medical Society, provides diagnostic, hospitalization, and prescription services to some of the approximately 200,000 people in Travis County (about a fourth of the population) who are uninsured or underinsured. So far the program has provided $406,300 in care to 150 patients. If each of Travis County's 1,900 doctors took care of 10 to 15 Project Access patients, 19,000 to 28,500 people would be served, significantly less than the 200,000 who lack coverage (Austin American-Statesman).
• A national study posits that depression affects more than 6.5 million of the 35 million (19%) Americans who are 65 or older. Seniors 85 and older have a suicide rate of 65 per 100,000, or twice the national average for all age groups. The illness is often undiagnosed in the aging population (Austin American-Statesman).
• Medicaid enrollment in Travis County continues to increase. In October, 67,212 people were enrolled, an increase of 1.5% from 66,220 people enrolled in October. Enrollment has increased every month this year (Texas Health and Human Services Commission).

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Transportation

Several important developments in transportation in the community occurred in the year 2003. Ground was broken in February on what will be a system of toll roads in Central Texas. Barton Springs road reopened in the spring after much debate. The newly formed Central Texas Regional Mobility Authority lay groundwork for the 11-mile turnpike around Cedar Park and Leander. Construction began in October for Texas 130, a 49-mile eastern bypass tollroad of the Austin metro area (Austin American-Statesman). Capital Metro expects a 7% increase in the total number of riders from FY 2003 to FY2004. The following chart shows the number of riders by category for 2003, and the expected number of riders in 2004:

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Education and Workforce Development

• On November 18, the Board of Regents of The University of Texas System approved tuition increases effective Jan. 23 for the spring semester and the next academic year, which begins in fall 2004. Tuition increases at general academic universities range from 4% to 15% for the spring semester for a student taking 12 semester credit hours (Austin American-Statesman).
• For the second year, the Austin Independent School District leads the state with more National Board Certified Teachers than any other school district in Texas. Nineteen teachers were recently certified, bringing the total to 47 (Austin Independent School District).
• The University of Texas and the Round Rock Higher Education Center will receive more than $1 million in federal money. Approximately $400,000 will go to a UT lab for research on early detection and monitoring of infectious diseases, and nearly $200,000 will help establish the Round Rock Higher Education Center (Austin American-Statesman).
• The number of average daily visits to WorkSource career centers has been steadily declining since peaking in July. In November, there were an average of 854 visits per day, down slightly from 855 in October, as compared to 907 visits per day in July (WorkSource).

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Public Safety:

• Initial data from a new program aimed at reducing recidivism among released offenders from Travis County State Jail suggests that the program is having its intended effects. So far, 55 ex-convicts have been taken to transitional living centers upon release, and none of the 55 has been arrested again. The program is a joint effort between police, prosecutors, state prison officials, and community service groups (Austin American-Statesman).
• On Thursday, November 20, 39 children taken into care by the state because of suspected abuse or neglect were adopted into permanent homes. In Texas, 3,700 children are still waiting for homes, and the numbers are expected to rise to 5,800 by 2005 (Austin American-Statesman).
• There were 19 fewer traffic deaths this year compared to 2002, for a total of 52. This marks a nine-year low in traffic fatalities. Police credit law enforcement initiatives targeting seat belt violations and drunken driving, and increasing patrols at busy intersections (Austin American-Statesman).

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RESOURCES:

• The numer of dollars lost in Travis County due to Mediaid and CHIP cuts totals $59,743,705. The amount of CHIP dollars lost totals $18,646,346. Total client caseload reduction for Medicaid and CHIP in 2005 will be 4,700 people, which includes pregnant women, medically needy, and children enrolled in CHIP. The number of aged and disabled people receiving 15% fewer hours of community care services totals 1,236 (Center for Public Policy Priorities).
• Eloise’s House, Austin’s only adult day care for people with Alzhiemer’s and memory loss, closed its doors after seven years of operation. The center was run by Family Eldercare, and shut down due to struggles with budget cuts and fundraising problems (Austin American-Statesman).
• The Texas High School Project will contribute $130 million dollars to redesign and improve highschools across the state. The project is funded by contributions from Bill Gates and Michael Dell which are matched by state dollars, and aims to increase high school graduation and college attendance rates. The state will offer grants of up to $600,000 to about 140 school districts (Austin American-Statesman).
• Both nationally and locally, mental health professionals struggle to meet the demand need of a growing Spanish-speaking population. In Austin, two of the 12 licensed therapists for adults at MHMR speak Spanish, and only one psychiatrist and three psychologists cater to Hispanics who don’t speak English. Some therapists use in-person or telephone-based interpreters or children as go-betweens for parents (Austin American-Statesman).
• A free service called America’s Jobline is now available for people wanting to search jobs posted on the largest public job bank on the internet. The phoneline bridges the gap of the ‘digital divide’ by providing information formerly only obtained on the internet via telephone and is sposored by the U.S. Department of Labor, the National Federation of the Blind, and the Texas Workforce Commission. The number is 1-800-414-5748 (WorkSource).
• The Christmas Bureau, The Salvation Army, Blue Santa, and Brown Santa gave approximately 11,900 families in Travis County gifts and food this holiday season. The Salvation army helped 3,000 families; Blue Santa helped 3,300 families referred by the Christmas Bureau and an additional 1,700 families; Brown Santa and community members assisted nearly 4,000 families. Most families received some combination of donated toys and bicycles, grocery gift cards, uncooked food, and gift cards. In addition, the Statesman’s Season of Caring Campaign raised more than $212,000 in cash and $111,000 in in-kind donations for families in need (The Christmas Bureau/Austin American-Statesman).
• Junior League of Austin, Jack Brown Cleaners, KVUE and Case 101 partnered for the 17th year on the Coats for Kids Project to bring 33,062 coats to needy children in Central Texas. This is 695 more coats than last year’s 32,367. Over 2,000 volunteers helped to organize, sort and facilitate the distribution of the coats to children referred through the school districts and area human service organizations. The program received more volunteers than it could accept, though it would greatly benefit from the volunteer time of more people who are bilingual (Junior League of Austin, Coats for Kids).
• Austin/Travis County has been awarded $4.2 million in the HUD Contiuum of Care for Homeless Assistance Grant. All renewal projects were funded, and a new shelter plus care project was awarded funding (Homelessness Taskforce).
• The 2003 ThunderCloud Subs Turkey Trot raised $65,000 for Caritas of Austin, up from $50,000 in 2002. Race participants increased from 5,000 to 6,100 - many of the new runners were kids in the Stepping Stone Kids K (Caritas of Austin).
• Instead of giving a holiday bonus to the members of their leadership team, SETON Healthcare Network made a donation to a local community service provider of the employee's choice in their name (Seton).

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WHAT CAN YOU DO TO HELP?

• Choose a local social services agency to support financially.
• Copy and distribute this document in order to increase public awareness.
• Support the local economy by shopping at local businesses.
• Give to the United Way Capital Area’s Community Fund or the Austin Community Foundation’s Urgent Issues Fund.
• Contact the United Way Capital Area’s Volunteer Center at 512-323-1898 or search for volunteer opportunities on United Way Capital Area’s website at www.uway-austin.org.
• Also see the CAN Urgent Issues Action Plan at caction.org for additional information about community-wide approaches to addressing these issues in our community.

ACKNOWLEDGEMENTS

The Community Overview was researched and written by the Research & Planning Division of Travis County Health and Human Services & Veterans Services, with assistance from numerous individuals in the community. We attempted to include all those who had a part in this undertaking, but if we have inadvertently omitted anyone, we apologize and ask that you inform us so that we may recognize you appropriately as the process continues.

TRAVIS COUNTY HHS & VS RESEARCH AND PLANNING DIVISION:

Blanca Leahy, Director
Meg Poag, Lead Writer
Charlotte Brooks, Lawrence Lyman, Christine McCormick, Ellen Richards, & Joy Stollings

CONTRIBUTORS:

Fred Butler, Sam Woollard,– Community Action Network
Leanne James– Greater Austin Area Workforce Board
Beverly Fisher - WorkSource - Greater Austin Area Workforce Board
Jessica Lindley-Spencer – The Arc of the Capital Area
John Gilvar – Austin-Travis County Community Health Centers
Susan Kresch Terese – Insure-A-Kid
Sherley Sanders – Manpower
Clift Bowman – The Christmas Bureau
Marco Galvan – 2-1-1 Texas, A Service of United Way Capital Area
Jennifer Johnson – Junior League of Austin, Coats for Kids
Julia Spann – Caritas of Austin

COMMUNITY ACTION NETWORK PARTNERS:

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