Community Overview

July, 2003

The effects of the recent downturn in the economy and the events of September 11th on Austin and Travis County.

Community Indicators over the past two months remain thoroughly mixed. Locally, few indicators show significant change for the better, but few are showing a significant change for the worse either. There is a growing belief among many investors and economists that the economy has turned a corner in its recovery from the 2001 recession. Of course, forecasters acknowledge they made similar predictions in 2002 and were proved wrong. Whether the local economy is getting better, worse, or just treading water, demand for most services continues to rise. Also included in this overview are brief highlights of 2003 legislative decisions.

Nationally, the unemployment rate continued to climb – 6.1% in May and 6.4% in June – reaching the highest level in more than 9 years. In June, 30,000 jobs were lost nationwide, bringing the national total to 236,000 for the year. Locally, unemployment rose as well,

but remains below national rates – 5.6% in May, up from 5.3% in April (local data for June will be released later this month). While up slightly from May, the unemployment rate remained lower than any point in the first quarter of 2003. The number of people employed in Travis County remains well above any other point in the past two years (US Department of Labor, TWC).

EMPLOYMENT:

• New jobs are on the horizon in some local industry sectors:
  • 2000 people showed up for a chance at one of 250 jobs being offered by the Target store opening July 27th in Central Austin. Another 400 positions are projected at another new location opening near Lakeline Mall (Austin American-Statesman).
  • When the new downtown headquarters opens early in 2005, Whole Foods will have more than 900 employees downtown, becoming downtown’s largest private employer (Austin American-Statesman).
  • State Farm Insurance Company expects to move 200 jobs to Austin during the next few years, doubling their current work force in the area (Austin American-Statesman).

The number of layoffs reported in Travis County remains relatively low: 193 in May and 169 through the middle of June. It is anticipated that this number will climb in the coming months as budget reductions in the public sector force more layoffs (WorkSource). For the week ending June 28, the advance figure for seasonally adjusted initial claims reported by the Department of Labor was 430,000, an increase of 21,000 from the previous week's revised figure of 409,000. The 4-week moving average was 425,000, a decrease of 4,500 from the previous week's revised average of 429,500 (Dept of Labor).

ECONOMY:

LOCAL

• Bankruptcy filings for the area of the U.S. that includes Austin rose 8 % for the 12-month period ending March 31, as compared to the national average of a 7.1 % rise (Austin American-Statesman).
• Local businesses show mixed economic results:
  • Applied Materials Inc., which employs about 2,200 people in Austin, showed faint signs of improvement in its fiscal second quarter, but still expects revenue to be flat or down in the quarter ending in July.
  • Dell Computer Corp. stock reached its highest price since November of 2000, rising 31% in the first quarter. Dell made a profit of $598 million, compared to $457 million the year before.
  • Motorola, Austin’s second-largest private employer behind Dell, warned that revenue will be about 6% less than initial forecasts. The news adds to uncertainty surrounding the employment of about 8,000 workers in Austin. (Austin American-Statesman)

STATE

Sales tax collections to the state general fund for May 2003 were up 2.9% from May 2002. The first time since September that collections exceeded the level of the prior year (Texas Comptroller of Public Accounts). In contrast, the City of Austin's sales tax collections fell almost 15% in May compared with the same month in 2002. It was the steepest decline in more than 10 years (Austin American-Statesman).

NATIONAL

• The Consumer Confidence Index for June (83.5) slipped slightly from May (83.6), but remains higher than April (81). Expectations for the future, however, continue to climb from 84.8 in April, to 94.5 in May, to 95.9 in June (June 2003 Consumer Confidence Index, The Conference Board).
• The index of leading economic indicators increased 1% in May. This followed a slight gain in April. It is possible that these two consecutive increases reflect the beginning of an upward trend, ending the flat trend that began in early 2002 (The Conference Board).
• The Help Wanted Index, a key barometer of the national job market was flat in May, remaining at 36 for the second month, down from 44 in May 2002. This continues a slow slide over the past few months (The Conference Board).
• Wall Street stocks gained for the third month in a row in May. The first three-month rally in two years. The Dow Jones industrial average climbed above 9,000 for the first time in nearly 10 months. By mid June, all three major indexes posted the highest close since last summer (Austin American-Statesman).
• The Federal Reserve cut a key short-term interest rate June 25 by one-quarter of a percentage point to its lowest level in 45 years. It aims to energize spending and investment and boost the economy (Austin American-Statesman).

DEMAND INDICATORS:

Basic Needs:

• Since July 1, 2002, 2-1-1 Texas, a service of United Way Capital Area, has seen the following changes (2-1-1 Texas):
  • A 30% increase in households needing assistance in paying their rent
  • Calls for assistance in finding affordable or subsidized housing has dropped by 10%
  • A 45% increase in families requesting assistance with mortgage payments
  • Individuals and families calling to request emergency food assistance have gone up 52%
  • Calls from individuals needing assistance with utility bill payments have increased by 10%
  • In addition, there has been a 31% increase in calls requesting assistance with covering prescription costs or co-payments
• From 2001 to 2002, partner agencies of the Capital Area Food Bank saw a 47% increase in the number of households asking for emergency food assistance. Already in just the first quarter of this year, they have seen another 25% increase. In addition, the cost to transport produce will double when compared to last year (Capital Area Food Bank).
• After dropping in 2002, demand on the East Austin Family Pantry, (which is a collaboration among The Arc of the Capital Area, Austin/Travis Co.MHMR, Ebenezer Baptist Church, and Any Baby Can) is back up to 2001 levels (The ARC of the Capital Area).

Housing:

• Record low interest rates have spurred home construction during the past year. For the 12-month period that ended May 31, 9,975 new homes were started, a 7% increase over the same period last year. In the first four months of this year, 37% of the 4,841 houses sold in Central Texas were priced between $100,000 and $150,000 (Austin American-Statesman).
• While construction continues to increase, sales have slowed. With almost 9,800 houses on the market in April and 10,100 houses in May, and sales down 9.8 % compared to last year, 2003 has been the slowest year for home sales since 1998. Sales fell nearly 15 % compared with May of last year (Austin American-Statesman).
• The closing of the Robert Mueller Airport has generated new housing opportunities in East Austin. Devonshire Park, a planned development of 45 single-family homes on eight acres just east of Austin’s former airport, opened in May, with prices ranging from $119,000 to $131,000 (Austin American-Statesman).
• Since the late 1990’s, the Housing Authority of the City of Austin has increased the number of rent assistance vouchers for Section 8 from 2,203 to 5,023. At any given time, 98% of its 1,928 apartments and 22 single-family homes are occupied (Austin American-Statesman).
• Garden Terrace, Austin's first Single Room Occupancy Housing project, is planned to open on September 1st for new residents. It will offer permanent housing in efficiency apartments through a partnership of Foundation Communities and Capitol Area Homeless Alliance (Capitol Area Homeless Alliance).

Physical and Mental Health:

The number of Travis County residents enrolled in Medicaid edged downward between May and June, yet still remains 7% higher than January (9% higher for children under 18). CHIP enrollment continued to climb slowly as it has all year (now up 4% from January) (Texas HHSC). Closures of local emergency rooms have increased sharply since 2001. Austin/Travis County Emergency Medical Services reports that emergency rooms were closed to some or all ambulances for 10,291 hours in 2002, a 400% increase over 2001, and are up another 63% in 2003 (Austin American-Statesman). The Indigent Care Collaboration is beginning to realize impacts of its strategies to assure access to quality health care for people who have little or no health insurance. As of June, over 6,000 people had been screened and 90% of those screened were found eligible for a range of medical assistance or charitable programs in the community. Over 560 physicians volunteered as of June to provide care for up to ten primary care or twenty specialty care patients per year, supplementing the range of appropriate health care settings available for low income and uninsured patients (Indigent Care Collaboration).

• KEYE news in conjunction with Austin/Travis County MHMR ran a special on depression and hosted a subsequent three-hour call in session with MHMR staff taking incoming calls. KEYE staff reported that they normally receive about 100 calls during a call-in program. KEYE finally shut down the hotline after receiving 342 calls. This is one indicator of the prevalence of depression in our area (ATCMHMR).
• National Mental Health Association gave Texas a ‘C’ rating in its observance of the 1996 Mental Health Parity Act. While Texas has passed a Mental Health Parity Act to ensure that insurance companies establish the same spending limits on physical and mental health, it still imposes limitations on the diagnoses covered, and insurance companies can and do place restrictions on visits or increase co-payments (NMHA).
• A New children's hospital, privately owned by Seton Healthcare Network, is scheduled to open in 2007 at the old Mueller airport. The $200 million facility will have 164 beds, compared with 110 at the current hospital (Austin American-Statesman).
• The city pays Seton $5.6 million a year for taking care of poor and uninsured patients at Brackenridge. Once the new Women's Hospital opens inside Brackenridge this fall, that payment will drop to $2.7 million a year for 53 years (Austin American-Statesman).
• In a study of 16 maladies, the Texas Health Care Information Council found that hospital admissions that could have been prevented are “significantly lower” in Travis and Williamson counties than the state average. This indicates that many patients who have less serious conditions are now accessing care in more appropriate, less costly, places like a community clinic or physician’s office (Austin Business Journal).
• Healthcare expenses for the very poor in Williamson County rose 30% to $2 million this year due to increased costs, more patients and less help from the state. The county estimates that it will serve 48 % more clients this year compared to last year. The Williamson County Commissioners Court approved a $600,000 emergency measure to supplement the program (Austin American-Statesman).
• According to a recent study by the National Institute of Mental Health, 16% of Americans – more than 30 million people—will suffer from major depression at some point in their lives, costing employers more than $30 billion in lost productivity. The study found increased rates of depression among young adults, the poor, and less educated. Women in particular were vulnerable to depression (Reuters).
• With the downsizing and re-organization of state government, budget cuts at local MHMR Centers, reduction in attendant care services, and demise of the In-Home and Family Support Program, the ARC of the Capital Area conservatively estimates a 25% increase in referrals and requests for assistance, respite care, and case management. This increase would come at a time when the agency’s donations and foundation funding has been reduced (The ARC of the Capital Area).
• Any Baby Can reports that their funds for respite care have been cut in half, their Early Childhood Intervention program is now required to impose a fee for service, and many of their clients that currently use Medicaid and CHIP to pay for services will lose their benefits. In addition, 1500 children with special needs still wait on a waiting list for services (6 of whom have died while on the waiting list), and 40 more children have just been added (Any Baby Can).

Transportation:

• A report released June 18th by Harvard Civil Rights Project noted the inequitable transportation policies of Texas, and their effects on vulnerable populations such as minorities, people in poverty, the disabled, and the elderly. The report states that because Texas invests relatively less in transportation, barriers exist for these populations in attaining employment, education, and affordable housing (Harvard Civil Rights Project).

Education and Workforce Development:

The results from this year’s new TAKS exams left mixed results. While third-graders did better than expected, at least 43% of the area’s sophomores flunked at least one of four subjects. Next year they must pass tests in all four subjects to graduate (Austin American-Statesman). Round Rock ISD will raise its property tax rate 8 cents to help balance the budget for the school district. The plan approved by the school board also includes cutting about 45 teaching positions, increasing student-to-teacher ratios, and reducing administrative costs (Austin American-Statesman). According to statistics released in early June by the UT admissions office, slightly more minority students will enroll this fall, and freshman college entrance exam scores have increased. Hispanic students will make up 16.6 precent, up from 14.3%, and African Americans will make up 3.9%, up from 3.4%. The average SAT score for freshmen entering is 1239, up from 1228 in 2002 and 1223 in 2001(Austin American-Statesman).

University of Texas officials reported that they are anticipating an $80 million budget gap over the next two years, up $20 million from recent estimates. The say they will have to cut fewer than 150 positions, down from an estimated 500 jobs (Austin American-Statesman). The State Legislature approved a bill to give Round Rock a four-year college that might eventually become Texas State University-Round Rock (Austin American-Statesman). After a brief dip in April, visits to the WorkSource Career Centers were up sharply in May in Austin/Travis County, to an average of 890 per day – the highest level so far this year (WorkSource).

Public Safety:

• The Victim Services Taskforce released their 2003 Victim’s Assessment on June 25. The report summarizes community data and states that after declining for several years, violent crime is on the rise. Violent crime incidents increased 5% from 2,990 in 2000 to 3,203 in 2002. Nationally, it is estimated that about half of violent victimizations are not reported to the police, totaling approximately 1,518 unreported victimizations in Austin per year. The report goes on to list the following statistics:
  • Persons age 15-24 comprise 7.4% of the Austin population but comprise 16.25% of the victims of violent crime.
  • Men experience violent crimes at rates 60% higher than women; however, women are the victims of all rapes (by definition) and the majority of sexual assaults.
  • Hispanics are over represented among homicide victims – 54% in 2000.
  • Women in households with the lowest income have seven times the abuse rates of those in the highest income households.
  • In 2002, the APD Victim Services Division reported that 47% of victims knew their offender through blood, marriage, or former marriage, 17% through intimate relationship, 13% were an acquaintance and only 20% were strangers.

Demographic Changes:

• Austin shrank last year by about 1,100 people, the only major city in the state to lose population, according to 2002 Census estimates. However, the overall population of the five-county Central Texas region -- Travis, Williamson, Hays, Bastrop and Caldwell counties -- grew by roughly 27,000 people, a 2% increase (Austin American-Statesman).
• The Kids Count 2003 Data Book was released this month by the Center for Public Policy Priorities comparing 1990 trend data to 2000 data for indicators of child well-being. Highlights of this report are as follows:
  • While the teen birth rate for Texas continues to be significantly higher than the national average, the rate dropped from 48% to 42% over that decade.
  • 22% of children in Texas are without health insurance, compared to the national average of 12%.
  • Households eligible for food stamps but not receiving them is 53%, as compared to the national average of 41%.
  • On a more positive note, 51% of Texas low-income households with children have housing costs that exceed 30% of their income, as compared to 59% of low-income families nation-wide.
• The state’s official demographer released a report Texas Challenge in the 21st Century with projections showing how population changes will affect every citizen of Texas within the next forty years. A summary of his projections follows:
  • Currently 1 in 10 people are over 65 years old, in 2040 1 in 5 will be over 65. This will lead to increasing demands in healthcare, and services for the aging will become more important.
  • The median age of Anglos is 38, Hispanics –25, African Americans –29.
  • In 2040 the Texas workforce will be less well educated, less skilled, and will earn less. Projections predict ‘an enormous’ increase in demand for TANF, Food Stamps, and Medicaid services.

RESOURCES:

• The state budget crunch is threatening to pull funding from Texas’ 2-1-1 information and referral system for nonprofit and disaster information. Last session the legislature allocated $4.7 million to the project (Austin American-Statesman).
• As many as 200 Central Texas teachers, including 37 in the Austin School District, will have jobs to return to this fall as a result of a WorkSource funded lay-off aversion program to train teachers who may have had their positions reduced or cut because of school district budget shortfalls. The additional certification program allows eligible teachers, certified in one area, to receive training this summer and earn additional certifications (Austin American-Statesman).
• El Buen Samaritano, an Austin nonprofit serving working poor, Spanish-speaking families, secured $23,000 to leverage a $500,000 grant in order to open a new South Austin facility (Austin American-Statesman).
• ACC plans to raise their tuition for the fall in anticipation of smaller than expected state appropriations in higher education (Austin American-Statesman).
• A last-minute revision to the federal tax bill passed at the end of May will prevent millions of low-income families from receiving the increased child credit that is in the measure. Most families with incomes from $10,500 to $26,625 will not benefit (New York Times).
• According to an annual tally of charitable contributions, Americans gave an estimated $240.92 billion to charities in 2002, only a .5% decrease from the previous year. Anecdotal reports from charities and other fund-raising entities say corporate gifts have fallen more significantly (The New York Times). Locally, an influx of professional, skilled volunteers is helping to boost the efforts of local non-profits. People who have been laid-off are donating their time to charities to keep their skills sharp (Austin American-Statesman).
• WorkSource, working in partnership with IBM, Motorola, National Instruments, NetBotz, Inc., St. Edward's University, has secured $2,997,940 in grant funding to upgrade the technical skills of high tech workers in the Greater Austin area. This grant will provide 1,822 current workers with high skills training in computer languages, programming, and other advanced information technology skills (WorkSource).
• Austin will be one of ten Texas cities to receive $13.5 million in federal funding for anti-terrorism equipment and homeland security planning. The funds will be added to $84.5 million in federal homeland security grants announced last week (KEYE News).

LEGISLATIVE UPDATE:

• Sweeping reorganization of state health and human services (HB2292) will consolidate 12 departments into four under the umbrella of the Health and Human Services Commission. Programs will be grouped into the following new agencies: Department of State Health Services, Department of Aging and Disability Services, Department of Assistive and Rehabilitative Services, and the Department of Family and Protective Services. It is projected that this reorganization will result in the elimination of more than 2,500 state jobs over the next three years. In addition to reorganization, this legislation also includes a range of policy and programmatic changes including, but not at all limited to:
  • Narrowing eligibility and reducing benefits under Medicaid and CHIP;
  • Co-pays, higher premiums and other cost-sharing measures for Medicaid, CHIP and many other services;
  • Full family sanctions for TANF recipients who do not meet program requirements;
  • Directive to increase privatization of a range of functions, including eligibility call centers;
  • Implementing a sliding fee scale for Early Childhood Intervention services;
  • Increases in TDH license fees;
• This legislation also includes provisions authorizing an election for the proposed Travis County Hospital District into law. If approved by voters, the district will pay for public hospitals, clinics and health care programs for poor and uninsured residents of Travis County. A nine-member board appointed by the city and county will oversee the district. (Austin American-Statesman).
• House Bill 1, the state budget for 2004-2005, will spend less revenue on social services than the 2002-2003 budget. These cuts include:
  • Reductions in Medicaid Community Care hours of service for elderly Texans and disabled adults
  • Reductions in Community and Long Term Care
  • Reductions in Medicaid Maternity coverage for low-income pregnant women
  • Elimination of medically needy spend-down program
  • Added asset limit to CHIP eligibility, projected to reduce the number of children enrolled by 169,295 below projected enrollment in 2005
  • Medicaid provider rate cuts
  • Elimination of various services for aged, disabled, and adult TANF recipients on Medicaid
  • Reductions in MHMR community services
  • Funding TDH programs below current service levels
  • Policy changes for TANF eligibility and payment levels, decreasing the number of families enrolled and decreasing their level of assistance (CPPP).

WHAT CAN YOU DO TO HELP?

• Choose a local social services agency to support financially.
• 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 2001 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
Charlotte Brooks, Judy Cortez, Lawrence Lyman, Christine McCormick, Meg Poag, Ellen Richards, & Joy Stollings

CONTRIBUTORS:

Fred Butler, Sam Woollard– Community Action Network
Beverly Fisher– WorkSource
Beverly Scarborough – Austin Travis County MHMR
Marco Galvan – 2-1-1 Texas, United Way Capital Area
Susan Eason – The ARC of the Capital Area
Susan Andersen – Seton
Ray Fernandez – Capital Area Food Bank
Carol Swicker - Capitol Area Homeless Alliance
Heather Hardesty - The ARC of the Capital Area

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COMMUNITY ACTION NETWORK PARTNERS:

Austin Area Human Services Association	Health Partnership 2010
Austin Independent School District	United Way Capital Area
City of Austin	Austin Area Research Organization, Inc.
The Greater Austin Chamber of Commerce	WorkSource - Greater Austin Area Workforce Board
Austin Area Interreligious Ministries	Capital Metro
Austin Travis County Mental Health Mental Retardation Center	Travis County
Community Justice Council	Higher Education Coalition