Community Overview

July, 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 improving. Incremental economic growth is accompanied by a gradual downward trend in unemployment. The unemployment rate for Travis County has steadily declined since January of this year, and remains below the rate for May of last year. Demand for most social services, including basic needs and medical assistance continues to rise. Legislative cuts to CHIP and mental health funding are causing increases in demand for local services and programs.

EMPLOYMENT:

LOCAL

• The unemployment rate for TravisCounty for the month of May was 4.5%, down from 5.8% in May of last year. However, it is still significantly higher than the 3.6% unemployment rate in May of 2001 Texas Workforce Commission).
• The unemployment rate for Travis and the five surrounding counties dropped to 4.3% in May – down from 4.7% in April . In April of 2003 the unemployment rate was 5.6% (Austin American-Statesman).

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STATE

• The May statewide unemployment rate fell 0.1% percent to 5.9% - a full percentage point lower than May of 2003. It is the first time since December of 2001 that the statewide unemployment rate fell below 6% (Austin American-Statesman).

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NATIONAL

• Employers nationwide hired 248,000 workers in May . In March and April employers added a total of 625,000 workers (Austin American-Statesman).
• In early June the Labor Department released a report showing that unemployment claims fell to 339,000. Claims have fallen steadily since a high of 444,000 in April of 2003 (Austin American-Statesman).

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ECONOMY:

LOCAL

• Sales tax receipts for the City of Austin were just over $9 million in June , a 10.2% increase from the same period in 2003 ( Austin American-Statesman).
• The rise in local sales tax marked the 6th straight month of growth after two years of flat or negative returns ( Austin American-Statesman).
• A number of local businesses show signs of growth, although some are still struggling financially :

• • Brigham Exploration Co. reported $16.8 million in first quarter revenue - a 14% first quarter increase.
  • Red Herring magazine lists Austin’s Clear Cube Technology Inc., Convio Inc., Motion Computing Inc., OnFiber Communications Inc., and Wayport Inc. among its 100 most promising high-tech companies.
  • Infraworks Corp. has raised $7.45 million in venture capitol since emerging from bankruptcy in January.
  • TippingPoint Technologies reported an increase in first quarter revenue, but an overall net loss of just under $1 million. The company’s 2004 first quarter net loss was smaller than its first quarter loss of almost $4 million
  • Stratus properties Inc. reported a $1.8 million loss in first quarter revenue – five times the loss reported for the same period of 2003 (Austin American-Statesman).
• In June the Austin City Council voted to offer over $20 million in tax break and utility construction incentives to attract the expansion of Samsung Semiconductor and a Home Depot data center. The companies can offer the City hundreds of high wage jobs ( Austin American-Statesman).
• In late May the region’s average regular unleaded gasoline prices were $1.86 per gallon, a 13% increase from April, and a 42% increase from a year ago (Austin American-Statesman).

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STATE

• State sales tax net collections deposited to general revenue totaled $1,461 million in April 2004. Compared with the $1,155 million collected in April 2003, this represents an increase of 26% (Texas Comptroller of Public Accounts).
• In late June the Governor’s Office released a letter requiring state agencies and universities to reduce their 2006-2007 baseline budgets by 5%. Any spending above 95% of current levels must be submitted as exceptional items to be evaluated (KEYE News).

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NATIONAL

• The nation’s economy grew at a 4.4% annual rate in the first quarter of 2004 . This is a higher growth rate than originally estimated, and indicates recovery. Inflation rose at 1.7%, lower than the 2% originally estimated (Austin American-Statesman).
• Consumer costs are on the rise. In mid-June gasoline prices were up 8.1% from April. Dairy prices were up 6.8% - the largest food price increase since 1946 (Austin American-Statesman).
• U.S. industrial production increased 1.1% in May - the largest increase since 1998 (Austin American-Statesman).
• U.S. orders for durable goods dropped for the second month in May . Economists had predicted a 1.2% increase, but instead there was a 1.7% drop. In April durable good orders fell 2.6% (Austin American-Statesman).

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DEMAND INDICATORS:

Basic Needs:

• In May the Texas Railroad Commission agreed to allow T-X-U Gas to increase consumer rates. Residential gas customers will see a rate increase of about $2 per month (Austin American-Statesman).
• Data from a Root Cause Project research study (data gathered in 2002 and 2003) reveals a number of childcare-related concerns for residents in the North Austin, Lanier High School area and the South Austin, Travis High School area:
• • Over 50% of respondents with children ages 0-14 years in both areas reported problems finding affordable childcare.
  • Around 40% of respondents in the Lanier area, and just over 30% in the TravisHigh School area reported problems getting dependable childcare.
  • In 2003 more than 50% of respondents in the Lanier area reported problems finding childcare during evening or weekend hours. (Root Cause Project)

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Housing:

• Austin Board of Realtors reported 2,002 previously owned home sales, up from 1,494 in May of 2003. The May 2004 sales total was the largest on record for a single month (Austin American-Statesman).
• National 30-year mortgage rates rose from 5.89% in late April to 6.3% in early June (Austin American-Statesman).
• TravisCounty foreclosures were down slightly for June. Travis County listed 316 foreclosures – down 7.9% from last year. However, the overall number of foreclosures in Central Texas has risen 177% over the past three years. Williamson County listed 220 foreclosures – a 29% increase from a year ago (Austin American-Statesman).
• The Austin-San Marcos Metropolitan area showed the lowest rate of home value appreciation in the nation . Central Texas house prices grew by 0.47% in the first quarter of 2004 compared to the same period of 2003. The national average growth is 7.7% (Austin American-Statesman).

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Physical and Mental Health:

Medicaid enrollment in Travis County has increased from 61,487 in May of 2003 to 69,919 in May of 2004. This is an increase of 13.7%.Enrollment has steadily increased from January of this year ( Texas Health and Human Services Commission). CHIP enrollment in Travis County has steadily declined - from 12,130 children in October of 2003 to 8,190 in May of 2004 (Texas Health and Human Services Commission). Statewide, CHIP participation is down from 529,000 in 2002 to less than 366,000 in 2004 (News 8 Austin ). Texas ranks worst among the 50 states for uninsured children (Austin American-Statesman, News 8 Austin ). Legislative budget cuts in 2003 included cutting funds to promote CHIP. In the fall of 2003, 35 Texas groups lost funding designated to publicize CHIP . Today no State funds may be used to recruit and help uninsured residents sign up (Austin American-Statesman).

• After last fall’s State budget cuts, 800,000 Texas adults lost access to mental health services under their Medicaid coverage. The cuts left 128,000 Texas adults who had previously been accessing mental health services under Medicaid without care - 3000 of those were in Travis County , and 700 were in Williamson County (Austin American-Statesman).
• A recent report estimates that 44 million Americans are without health insurance (KEYE News)
• Nationally, health insurance premiums are expected to rise 10% in 2004. Although the rate is lower than the 14% and 18% increases of the past few years, a 10% increase is still more than double the overall inflation rate (Austin American-Statesman).
• This summer Seton Healthcare Network will close six clinics that serve low-income people, including clinics that serve patients with hepatitis C and diabetes (Austin American-Statesman).
• The University of Texas School of Public Health released a recent report that shows the rate at which Texas fourth-graders are obese is 46% higher than the rate of fourth-graders elsewhere in the nation (Austin American-Statesman).
• New federal air pollution data shows that Texas power plants increased emissions of toxic mercury by more than 10% in 2002. Before the increase, Texas power plants already ranked number one in the nation for tons of mercury compounds released into the air (Austin American-Statesman).
• Nationally, the teen smoking rate continues to decline. In 2003, 22% of students in grades 9-12 admitted to being current smokers. There has been a steady decline in teen smoking rates since a high of 36.4% in 1997 (KEYE News).
• The percentage of adults in the Root Cause Project Area (North Austin, Lanier High School area) who visited a dentist or dental clinic in the past year fell from 43% in 2002 to 16% in 2003, more than a 50% decrease (St. David's Root Cause Project).
• About 25% of adultsin the Root Cause Project Areareported that poor mental health kept them from doing their usual activities for at least one day during the prior month (Root Cause Project).
• Recently, a panel of primary care and mental health leaders concluded that the most effective approach to generalized anxiety disorder (G.A.D.) is a combination of pharmacology and psychology. 87% of G.A.D. patients seek treatment for symptoms such as pain, headache and insomnia from their primary physicians, and do not present with anxiety as their first symptom. The panel suggested that communication between primary care physicians and mental health professionals is essential (Austin-Travis County MHMR).

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Education and Workforce Development

• As of June 28, 1265 people have been laid off in the Greater Austin Area in 2004 , according to numbers collected by WorkSource – Greater Austin Area Workforce Board. Of the layoffs in 2004, 61% were employed by call centers. The economic climate has also affected the number of customer visits to the four WorkSource – Career Centers. As of June 30, there have been 109,515 customer visits to the Career Centers – an 8% increase from the 101,107 customer visits documented the first two quarters of 2003 (WorkSource).
• In order to save about three million dollars in this year’s budget, AISD cut 66 teaching slots for art, music, and physical education, increasing class sizes. Some elementary schools’ art classes had over 30 students this last year, and in kindergarten through fourth grade, the cuts resulted in maximum class sizes increasing from 22 to 29 students (Austin American-Statesman).
• After two years of the piloted “Blueprint” program for six struggling East Austin schools, scores on tests reflect both progress and setbacks. Although some test scores improved, in certain subjects and grade levels the percentage of students passing the tests declined when compared with scores in previous years. Teacher turnover is down, but at most schools it is still higher than the district average (Austin American-Statesman).
• The Austin Childcare Council received a grant from the U.S. Department of Health and Human Services to pay for the Eager to Learn Program through next spring. The project focuses on providing a wide range of literacy services to young children in four North-East Austin zip codes (Austin American-Statesman).

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Public Safety:

• A recent study commissioned by the Dyslexia Research Foundation of Texas found a strong correlation between re-incarceration and illiteracy:
• • Of the almost 145,000 prisoners in Texas , about 32%, or more than 45,000 are functionally illiterate.
  • Because of a higher recidivism rate , for every 1000 nonreaders released from prison, taxpayers will pay $12 million in future prison costs. Average recidivism costs for released prisoners who can read are about $7.2 million per 1000.
  • The recidivism rate for youth offenders released with a second grade reading level is 62% - versus 36% for those with more advanced reading ability (Austin American-Statesman).
• A recent report on domestic violence in Texas showed that in 2003, at least 140 women were killed by their husbands or partners. It also reveals that 74% of all Texans have either experienced domestic violence or have a family member or friend who has (Austin American-Statesman).
• New FBI data for 2003 shows that while violent crime in Austin is down, property crime is up:
• • Violent crime was down 1.6% from 3,203 to 3,153 in 2003.
  • In the same period property crime rose 6.3%.
  • Overall crime in Austin rose 5.7% (Austin American-Statesman).
• The state prison system is near capacity and could become overcrowded by next year. Current trends suggest the 150,000 -bed prison system will have about 500 more inmates than it can house by late summer 2005. Some analysts say the prison system will have as many as five-thousand more inmates than it can handle by 2008 (KEYE News).

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Demographic Changes:

• A recent report from The Texas State Data Center at the University of Texas at San Antonio predicts that 35 years from now the Texas population will be older, more diverse, and Hispanics will make up a majority of the population :
• • The report predicts that by 2010 the population will grow (from 20.8 million according to the 2000 census) to 25 million, and by 2040 it will double to more than 50 million.
  • If current growth rates hold, Austin will outgrow San Antonio by 2020 .
  • The median Texas age , which is now 32, will be 39 by 2040.
  • Hispanics , now about a third of the population will make up more than half of the Texas population by 2040.
  • The population of the Rio Grande Valley is expected to surpass El Paso , and Dallas and Houston are expected to more than triple in size (Austin American-Statesman).

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RESOURCES:

• The May 8, Stamp Out Hunger Campaign brought 200,000 pounds of food donations to the Capitol Area Food Bank (Austin American-Statesman).
• In late May Big Brothers Big Sisters gave 51 graduating high school seniors a total of $102,000 in scholarships (Austin American-Statesman).
• The Topfer Family Foundation gave $3.2 million to Seton Healthcare Network’s, Children’s Hospital Foundation. The money will go toward the construction of the Children’s Medical Center of Central Texas at the former Mueller airport (Austin American-Statesman).
• In mid-May the United Way divided its Community Investment Fund of $4.1 million among 46 nonprofit organizations in the community (Austin American-Statesman).
• In May the 2004 Help Fest raised $26,000 for low-income people diagnosed with hepatitis C (Austin American-Statesman).
• The Travis County Sheriff’s Office and the Austin Police Department opened an office at the State Hospital in early June. The office will include a 19 person Crisis Intervention Team . The collaboration will offer mental health services across jurisdictions, allow officers to share resources and training facilities, and bring them closer to courts that deal specifically with mental health issues (News8Austin).
• A court ruling in early June prevents the Texas Workforce Commission from terminating Medicaid benefits for TANF recipient adults who fail to follow “personal responsibility rules.” The Texas Department of Health estimates that the ruling prevented 2,300 adults from losing Medicaid coverage (Austin American-Statesman).
• An Austin-made one-hour documentary - “Are the Kids Alright?” - aired across the state on PBS stations June 24 th . The Hogg Foundation and the Houston Endowment financed $120,000 of the film’s production costs. The film addressed statewide children’s mental health issues (Austin American-Statesman).
• This year Family Eldercare raised $37,000 for its annual Fan Drive . The agency will distribute 7,000 fans to those in need in Travis and ten surrounding counties – a 25% increase over last year’s fan drive (Austin American-Statesman).
• In June Impact Austin awarded LifeWorks’ School for Scoops program a $126,000 grant . The agency will use the money to own and operate a Ben & Jerry’s ice cream shop to provide job training for at-risk youth and young adults (Austin American-Statesman).
• On June 25, the Texas Department of Healthgave a third mobile dental van ($1 million) to the St. David’s Foundation. The new van will offer 3,000 more community members per year access to dental services (Austin American-Statesman).
• In June the Center for Disease Control and Prevention awarded the Wright House Family Wellness Center and AIDS Services of Austin a $3.2 million grant to help prevent the spread of HIV in the city’s minority communities (Austin American-Statesman).
• In 2003 Americans gave an estimated $240.72 billion in charitable donations. That estimate equals about 2.2% of the gross domestic product. 2003 is the fifth year since 1971 that charitable contributions have exceeded 2% of the total goods and services output (New York Times).
• Waterloo Counseling Center received a matching grant from The Meadows Foundation of $15,000 to expand counseling services to gay, lesbian, bisexual and transgender (GLBT) individuals. Waterloo will have to raise $15,000 by November of this year to receive the funds.

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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 http://www.unitedwaycapitalarea.org.

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

Brook Son, Lead Writer

CONTRIBUTORS:

Fred Butler, Sam Woollard, – Community Action Network

Lisa Kerber, Ph.D. – St. David’s Root Cause Project

Susan Kresch Terese – Insure-a-kid Communications

Mildred Vuris – Austin-Travis County MHMR

Leanne James – WorkSource

COMMUNITY ACTION NETWORK PARTNERS:

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