Community Overview

September, 2003

Local economic indicators over the past two months remain mixed. Incremental economic growth is producing slower-than-expected hiring because the current economic recovery is driven by productivity gains rather than job creation. Though the economic downturn appears to have bottomed out in Travis County, demand for most services continues to rise. Included in this issue of the overview are highlights of the impacts of budget cuts on local agencies.

EMPLOYMENT:

• After jumping from 5.5% to 6.4% in June, the unemployment rate in Travis County dropped to 6.0% in July, reflecting normal summer patterns as students and school staff look for summer jobs. The job growth rate in Central Texas has been improving slowly this year, rising from half a percent in January to 1.3 % in July (Texas Workforce Commission).
  
  
• From 2000 to the end of 2002, 35,679 in the Austin Metro Area lost jobs, nearly 6.7% of the region’s total private work force, while private industry wages continued to drop. In addition, the jobs Austin has been adding don’t pay as well as the jobs being lost: for the 10 industries adding the most employees, the average weekly wage was $652, while in the 10 industries shedding the most jobs, the average wage was $1,290 a week (Austin American-Statesman).
  

• Local corporate employment trends: The Hilton Hotel company will be hiring nearly 600 employees later this year, including 66 managers and 511 hourly employees. Hilton plans to hold a job fair mid-December. The local office of Progressive Insurance Corporation announced that it will add 148 jobs at its Austin call centers, although the pay will be relatively low. In contrast, BMC Software Inc. cut 75 jobs in Austin in August (Austin American-Statesman).
  

ECONOMY:

LOCAL

• The Austin area Purchasing Manager's Index registered 64.6 in August. That's the best reading for Austin since December of 2001. A reading above 50 is considered an indication that the economy is expanding (KEYE Austin).
  
• County issued permits remained ahead of 2002. However, sales tax receipts fell at a surprising rate, down more than 15% from the same month last year (Travis County Auditor’s Office).
  
• The Austin area manufacturing index hit 64.6 in August, the highest level since December 2001. An index above 50 signifies growth. For the first time this year, manufacturing employment also registered improvement (Austin American-Statesman).
  
• Local Businesses show mixed signs of recovery:
  - Applied Materials, which employs more than 2,000 people in Austin, predicted that sales would rise about 4% this year and an increase by 24% next year, although sales were down 25% in its third fiscal quarter.
  - Motorola Inc. continued to lose money in the second quarter, down 10% from a year ago.
  + Dell Computer Corp. reported sales up 27% from last year during the quarter that ended Aug. 1.
  + Cirrus Logic Inc. announced that it expects sales to surge 10% to 23% in the current quarter.
  + AMD appears poised to rebound as shares leaped up more than 21% since January.
  
  
  
• The proposed City budget announced in August reduces the general fund by 3%, and health and human services by 5%. In addition, the proposed budget eliminates 519 positions, and 38 City employees will be terminated (Austin American-Statesman).
  
  
• Travis County’s taxable property value decreased this year, causing the County’s tax revenue to drop from $62 billion in 2002 to $60 billion this year, marking the first revenue decrease the County has seen since the mid 1980’s (Austin American-Statesman).
  
• Austin showed a rebound in venture capital investment in the second quarter. The number of companies receiving funding rose 50%. Twenty-four Austin companies raised $142 million during the three months that ended June 30. By comparison, 16 companies raised $67 million during the second quarter a year ago (Austin American-Statesman).
  
• Property foreclosures continue to rise in Travis County, up 75% for the quarter. The total number of foreclosures has increased progressively in each quarter of this year (Austin American-Statesman).
  

STATE

NATIONAL

• Economic Indicators at the National level remain mixed:
  • July unemployment slipped to 6.3% from 6.5% in June.
    
  • The Help Wanted Index (measure of help wanted ads in 51 major newspapers nationwide) remained at 38 for June and July, indicating that the job market may have stabilized, but it remains well below last year’s levels (47 and 44).
    
  • Consumer confidence continues to fluctuate – rising to 81.3 in August, up from 77 in July, but remaining lower than June: “Growing optimism about the economy over the next six months echoes the latest gain in The Conference Board’s Leading Economic Index. However, continued optimism will depend on positive developments in the labor market” (Lynn Franco, Director of the Conference Board’s Consumer Research Center).
    
  • The Index of Leading Economic Indicators increased .4% to 115.2 in July – up 1.2% in the past 6 months.
    
  
  
• The Bush Administration announced in July that it projected a record federal deficit of $455 billion this year, about 50% higher than it estimated in February. This amount represents about 4.2% of the total economy (Austin American-Statesman).
  
• Retail sales were 1.4% higher in August, the largest increase in four months (Austin American-Statesman).
  
• Personal bankruptcy filings totaled 1,613,097 for the 12-month period ending June 30- an all-time high for any 12-month period. In addition, a 12.8% increase occurred in non-business bankruptcy cases over the same period (Austin American-Statesman).
  

DEMAND INDICATORS:

Basic Needs:

Caritas of Austin is unable to fill an average of 140 requests for rent and utility assistance everyday. This number has increased from an average of 120 daily, unfilled requests a year ago (Caritas of Austin).

Capital Area Food Bank surveyed 258 clients in Travis County seeking food assistance. The results showed that 67% of the respondents live at or below the Federal Poverty Income Guideline of $15,260 for a family of four. 81% of clients are female, 39% of respondents are married, 28% single, 14% divorced, and 16% widowed. The average household size is three people, of which 8% are children under the age of one year, 28% are children aged one to 17, 38% are adults aged 18 to 59 years, and 12% are adults aged 60 years or older (Capital Area Food Bank).

The East Austin Family Pantry, a collaboration among The ARC of the Capital Area, Ebenezer Baptist Church, Austin Travis County MHMR, and Any Baby Can experienced its largest one month total of clients for the month of July, 2003. There were 614 people who used the Pantry in July, an increase of 161 people from the month before (The ARC of the Capital Area).

Housing:

The Austin area apartment market appears poised to rebound as occupancy rates rose slightly in the first half of this year, according to a local real estate consultant Charles Heimsath. More units were rented than in any six-month period since the last half of 2000. However, the region still has too many apartments to meet dwindling demand, so rents are still falling, with rates currently at $694 in June for an average sized apartment, as compared with $721 in December and $746 in June 2002 (Austin American-Statesman).

Average rates for a 30-year fixed-rate mortgage were 5.94% at the end of July, up nearly half a percentage point from the record low of 5.21% in June of this year. This marks the highest rate increase since January 17. The increase in rates have put those constructing homes in a tight bind as they have to try to lock in lower rates and attempt to finish homes in less costly ways (Austin American-Statesman).

Increased mortgage rates have caused the national rate of sale of previously owned homes to soar to 6.12 million in July. The previous record was a rate of 5.94 million, set in December of 2002. Existing home sales in Central Texas also reached record highs in July (Austin American-Statesman).

New home sales rose 4.7% in June to a rate of 1.16 million units. This added to a 10.9% jump in new home sales from April to May (Austin American-Statesman).

Foreclosure postings in Travis County shot up 32% during the month of July. At the August 5 auction 386 Travis County foreclosure properties were up for sale, up from 292 in July’s auction and up 76% from last August. Postings for the year to date are up 65% from the same period last year (Austin American-Statesman).

Physical and Mental Health:

• Medicaid enrollment in Travis County continues to climb, reaching a total of 61,694 in August 2003 (including 41,779 age 0-18). This represents an increase of 7% overall, and 11% among children age 0-18 since January of this year. After climbing slowly for the first six months of the year to a peak of 12,850, CHIP enrollment in Travis County fell slightly in the past two months – 12,760 in July and 12,592 in August (Texas Health and Human Services Commission).
  
• On September 1, 13,397 children in Travis County lost most of their mental health coverage through the Children’s Health Insurance Program due to state legislative budget cuts (Austin American-Statesman).
  
• Medicaid no longer pays for mental health counseling services to adults over 21 years old. Public mental health treatment services are available for those diagnosed with Schizophrenia, Bipolar, ‘clinically severe depression’, and children with ‘serious emotional illnesses’. About 17,000 people will be eliminated from treatment benefits (Mental Health Association of Texas).
  
• Using its new ‘Medicaider’ tool, the Indigent Care Collaboration has interviewed and screened 8,637 uninsured persons for eligibility for all medical and other charitable programs so far in 2003. Of those persons, about 16% were eligible for Medicaid, SSI, or CHIP, and over 90% were found to be eligible for at least one local charitable program (Indigent Care Collaboration).
  
• The Centers for Disease Control and Prevention reported in July that the number of Americans diagnosed with AIDS increased 2.2% in 2002, the first time the incidence of the disease has risen since 1993. However, the number of deaths from AIDS continued to decline in 2002, dropping 5.9% (Austin American-Statesman).
  
• The Report on America’s Children, released by the National Institutes of Health, the Census Bureau, and other agencies, shows infant and childhood death rates continue to drop and fewer teens are giving birth, but the number of overweight children aged 6 to 18 has more than doubled since 1980 (Reuters).
  
• Austin Travis County MHMR reports that for the last four years in Austin, there are significantly more suicides than murders. In 2000, the rate of suicides to murders was 77:33, in 2001 it was 75:28, in 2002 it was 83:25, and in 2003 it was 40:18. While the suicide rate for the state remained constant, the suicide rate in Travis County has increased 25% since 1999 (A/TCMHMR).
  

Education:

• July 8 marked the last chance for Texas third-graders to pass the TAKS reading exam. A new total of 96% of Texas third graders passed and will move on to fourth grade (Austin American-Statesman).
  
• The Texas Education Agency released data for 2001-2002, showing that Austin’s dropout rate declined from 3.7% in the 1998-99 school year to 1.1% in the 2001-02 school year. This is a dramatic reduction of almost 70% from the dropouts reported in 1998-99. However, AISD’s attendance rate of 93.5% is behind the state’s 95.5% rate, costing the district about $25 per day per absent student (Texas Education Agency).
  
• The Texas Higher Education Coordinating Board reported that colleges have increased Hispanic enrollment by 36,340 students from 2000 to 2002. From 2001 to 2002, the enrollment increased by 20,910 (Austin American-Statesman).
  
• AISD’s new high school exit survey revealed that 91% of the May 2003 seniors from Austin high schools say that they plan to pursue some sort of post-secondary education within one year. About 43% of those students reported that they would need to borrow money to continue their education (Austin American-Statesman).
  
• AISD Superintendent Pat Forgione announced in August that AISD’s SAT scores exceeded the state’s average by 50 points, while AISD has larger percentages of all students taking the test. Advanced placement participation is more than twice the state rate, and AISD has five of Newsweek’s top 600 high schools in the nation, more than any other district in Texas (AISD).
  
• Austin Community College announced in August that they will increase tuition by $3 per credit hour, marking the second time in two months that ACC officials have raised the tuition. In addition, beginning in January, all students who live outside the ACC district will pay $267 in tuition for a three-hour course, while in-district students will pay $102 (Austin American-Statesman).
  
• U.S. News and World Report released its college rankings in mid-August. UT ranked 53rd among 248 national universities. UT also tied for 17th place in the best public universities category. St. Edward’s University ranked 26th for universities that do not offer doctorates, and Southwest Texas State University in San Marcos ranked 59th (Austin American-Statesman).
  

Public Safety:

• The proposed Austin Police Department budget of $162.3 million represents a reduction of more than $5.5 million from the previous fiscal year. Most of the cuts came from eliminating 43 civilian positions, changing cadet class schedules, reducing overtime, and eliminating expenses related to equipment use (e.g., cell phones, cars) (Austin Police Department).
  
• The average number of inmates in Travis County jails has decreased from 2,721 in 2001 to 2,266 in 2002. For 2003, the projected average jail population is projected to decrease to 2,175. The reduced average is the reason for proposed budget cuts of $2.4 million for the Sheriff’s Office. Most of the cuts are proposed to come in the form of 43 FTE’s, most of which are correctional officer positions (Travis County Planning and Budget Office).
  
• Of 3,007 drunk driving arrests in 2002, 43% involved Hispanic men, who make up only 11% of Austin’s driving population. Including women, Hispanics made up 47% of the DWI arrests but only 21% of Austin drivers (Austin American-Statesman).
  
• Austin Police Department statistics show an 8.6% increase in reported theft from May 2002 to May 2003. Burglary reports have increased by 4.4% and auto theft has decreased by about 10% over the same period (Austin American-Statesman).
  
• The number of released convicted felons in Texas has doubled since 1995, to almost 60,000 a year. About 4%, or 2,400 of those people are released into Travis County. Because of policy changes, they are now less likely to be under the supervision of a parole officer (Austin American-Statesman).
  
• Last year, Court Appointed Special Advocates (CASA) volunteers helped 942 of the 1,662 Travis County children in the Child Protective Services system (Austin American-Statesman).
  

Demographic Changes:

• The City of Austin gained just $35 million in income through migration in 2001, down from 66 million dollars in income from people moving into the region in 2000. This is primarily due to the slowing of the technology industry (Austin American-Statesman).
  
• Trends in immigration and migration in 2001 show that Austin began losing population during this year, primarily to the other four counties in the metro area, as 9,697 people moved into Bastrop, Hays, Williamson, and Caldwell Counties. Austin gained just 318 people in 2001 primarily from smaller Texas cities, and cities in California (Austin American-Statesman).
  

RESOURCES:

Governor Rick Perry plans to spend $167 million in new federal money to stave off some of the Medicaid and community care program cuts that were included in the $117 billion budget approved in June. The June budget called for a 5% cut of Medicaid payments to doctors, hospitals, and nursing homes. With the added federal dollars, the payments will be cut by 2.5% for fiscal year 2004. In addition, the State chose not to use part of the $167 million to lessen the impact of the 15% cut in home health care services for the frail and elderly for 2004; the 15% cuts remain in place for 2005. (Austin American-Statesman; Center for Public Policy Priorities).

Leander schools are planning to add more counselors, social workers, and English language instructors to their staff using a $1.9 million grant awarded in July by the U.S. Department of Education for the Safe Schools/Healthy Students Initiative. The money will allow the district to coordinate anti-substance abuse programs and pay for additional training for teachers to teach problem-solving, anger management, and conflict resolution to the students (Austin American-Statesman).

Austin Firefighters volunteered to give up a pay raise in an attempt to save two fire stations and offset proposed cuts to health and human services. The group agreed to funnel the $500,000 from their savings from the City budget to health and human service organizations (Austin American-Statesman).

The Texas Attorney General’s Office released $1.34 million to fifteen Travis County agencies that help crime victims. Agencies receiving the grants include Political Asylum Project of Austin, SafePlace of Austin, For the Love of Christi, and the City of Austin Office of Emergency and Management (Austin American-Statesman).

IMPACT OF LEGISLATIVE BUDGET CUTS ON LOCAL AGENCIES:

• Due to state cuts, Austin Travis County Mental Health and Mental Retardation Center passed a $33.9 million budget for 2004 that is $3.5 million smaller than this year’s budget. These cuts will most likely mean that each month 282 people with mental retardation will lose help coordinating their services, 250 children will not receive any mental health services, more than 1400 adults will not receive counseling, and 32 people with severe mental illness will not receive any services (A/TCMHMR).
  
• The general revenue portion of Texas Commission on Drug and Alcohol Abuse’s (TCADA) budget was reduced by 35% for fiscal year 2004. However, the general portion fund is only 15% of their total budget. TCADA absorbed the decrease so that direct services will not be affected (Arturo Hernandez, MHMR).
  
• The total dollars lost through major Medicaid and CHIP cuts is estimated to be $50,545,913 as of August 2003. These numbers reflect state budget cuts and lost payments due to the elimination of certain benefits, rate reductions, reduced matching funds, reduced client caseloads, and policy changes. They include $167 million in state funds made available by federal fiscal relief to Texas (Center for Public Policy Priorities).
  
• Medicaid and CHIP caseloads in Travis County are expected to decrease by about 4,700 in 2005, while provider rates were cut by over $789 million. Monthly, 208 pregnant women and 345 medically needy clients will not be served due to Medicaid and CHIP reductions (Center for Public Policy Priorities).
  
• Austin Child Guidance Center will no longer be able to accept CHIP clients because of actions taken by the Texas Legislature. Support from United Way was reduced 20%; they are expecting to lose $106,500 in collaborative grant funding, and $40,000 from the Office of the Attorney General. These losses represent 16,8% of the agency’s total budget. This reduction will mean a smaller range of treatment options, longer waits for all services, and staff lay-offs (ACGC).
  
• Any Baby Can is facing increased needs and less funding. Because of lesislative cuts this session, the agency will now be serving fewer children with preventative care services. They will have to lay off at least one full-time case manager, who helps about 100 families a year coordinate resources, basic needs services, medical services, mental health counseling, parenting, prenatal care, child abuse prevention, and education. Respite services will also be cut dramatically (Any Baby Can).
  
• LifeWorks is weathering cuts from United Way, the State, and anticipated reduction in events, foundations, and private giving, totalling about $227,000 (LifeWorks).
  
• Austin Children’s Shelter recently had to turn away 18 babies who needed emergency shelter in one week due to a lack of space and resources. Those babies had to go outside the City and County to receive emergency shelter services, or risk staying in an unsafe home (Austin Children’s Shelter).
  
• With cuts at both state and local MHMR agencies, The ARC of the Capital Area expects many more calls from people seeking case management, respite care, housing options, and crisis assistance, to add to the list of 1200 people with mental retardation in Travis County already waiting for services. The reductions in state funding and CHIP are going to increase the waiting lists and force more people to enter institutions, including nursing homes. Additionally, the economy has had a profound effect on these families, as The ARC is seeing many more people seeking basic needs assistance (The ARC of the Capital Area).
  
• Funding for a state-funded afterschool program called The Texas Middle School Initiative was cut this session. This means that $700,000 in funding for programs in Travis County middle schools will be discontinued, and 2,100 middle school youth will no longer have access to afterschool programs, academic support, youth development, enrichment, mentoring, and recreational activities. In addition, about 500 parents will no longer receive adult education classes such as ESL, GED preparation, and parenting classes (AISD).
  

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
Meg Poag, Charlotte Brooks, Lawrence Lyman, Christine McCormick, Ellen Richards, & Joy Stollings

CONTRIBUTORS:

Fred Butler, Sam Woollard– Community Action Network
Beverly Fisher– WorkSource
Susan Eason – The ARC of the Capital Area
Susan Andersen – Seton
Susan McDowell- Lifeworks
Arturo Hernandez- MHMR
Mildred Vuris- MHMR
Donald Zappone- Austin Child Guidance
Lila Carl- Any Baby Can

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COMMUNITY ACTION NETWORK PARTNERS: