Community Overview

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

A review of indicators since November shows that the Travis County economy remains shaky. The unemployment rate dropped slightly but remains high. Increased demand for social services is evident, particularly in the area of basic needs. However, resources in the form of grants are coming into the community to help serve those in need.

ECONOMY:

LOCAL

• Money magazine named Austin one of the 10 best places to live in the country. The survey considered both population growth and cost of residential real estate relative to local income (Austin Business Journal).
• Low interest rates fueled home sales in October – up 7% from October last year. The median house price was $150,890 – up 6% from last year. New home construction is 10% below the average annual rate recorded from 1992 through 2001 down to approximately 8,000 starts in 2002 (Austin American-Statesman).
• A decrease in the appraisals of commercial real estate could lead to a $10 million drop in city revenues. The drop could leave a $60 to $70 million gap between income and expenses for the city’s 2003-2004 fiscal year. While costs are likely to increase for many services, city officials are considering an increase in property taxes to make up for the loss (Austin American-Statesman).
• In Central Texas, about 10% of apartments (15,000 units) were vacant during the third quarter of 2002. The average monthly rent was $715 in the third quarter, down from a peak of $808 a month in the second quarter of 2001. The region’s apartment occupancy is expected to decline another 2% to 3% during the fourth quarter (Austin American-Statesman).

STATE

• A new report by the Dallas Federal Reserve Bank says that the Texas economy has stalled, while the national economy continues to make small gains (Austin Business Journal). However, certain high-tech industries such as semiconductors, personal computers, business servers, and routers are experiencing increased sales – signs that the high-tech industry may be recovering (Austin American-Statesman).
• Texas state government has an estimated $5 to $12 billion revenue gap, out of the total $114 billion state budget (Austin American-Statesman)

NATIONAL

• Growth in U.S. retail sales for November and December, at 1.5%, was the lowest it had been since at least 1970, when sales growth was first tracked. With two-thirds of the U.S. economy dependent on consumer spending, the slow holiday shopping season could have a broad impact (The New York Times).
• U.S. orders for durable goods (computers, aircraft, etc.) fell 1.4% in November, dampening prospects that companies will spend enough on equipment to help fuel the economic recovery (Bloomberg News).

EMPLOYMENT:

• The Travis County unemployment rate dropped to 5.2% in November, down from a twelve- year high of 6.2% in June. The November unemployment rate in Travis County was better than the State and Nation’s rates of 6.0%.
  
• 6,732 people were laid off in the greater Austin area between January 1 and December 31, 2002, in comparison to 18,841 layoffs in 2001. These figures only include layoffs reported to the Texas Workforce Commission (WorkSource).

WorkSource Career Centers received 14,189 visits in November 2002, for an average of 788 visits a day. In 2002 there were 174,129 customer visits to the centers, indicating that demand for employment assistance remains high. WorkSource Career Centers received 133,610 customer visits in 2001, averaging 12,376 visits per month (WorkSource).

• The availability of seasonal jobs was down from last year – resulting in 4,000 fewer people being employed during the holiday season (K-EYE News).
• In an effort to regain profitability, Advanced Micro Devices (AMD) cut 300 jobs in Austin during the last quarter of 2002, and 2000 jobs worldwide. Most of the cuts occurred in support functions and research and development. AMD still has approximately 3000 Austin employees (Austin Business Journal).
• 3M announced that it is cutting 100 of its 1,500 jobs in Austin, down from a high of 1,800 employees in 2001 (Austin American-Statesman).
• Austin chipmaker Cirrus Logic announced on January 16th that the company is cutting 67 jobs, 10% of its worldwide workforce (K-EYE News).
• In Round Rock, 61 people are losing their jobs at General Electric Tensor as the company closes its plant (K-EYE News).
• Nonprofit organizations employed 26,100 people in the Austin metropolitan area in 2000 – more than Dell Computer Corp., the region’s largest corporate employer. Nonprofits represent 7.2% of Travis County’s total workforce, according to the study released by the Texas Association of Nonprofit Organizations (Austin Business Journal).

COST OF LIVING:

• In terms of income inequality, Austin ranks #11 out of the 61 largest metropolitan areas in the country, according to a recent study. San Jose has the greatest gap between rich and poor in the United States. Dallas and Houston rank in the top 10 (Austin American-Statesman).
• Median household income in the Austin MSA remained the highest among Texas metropolitan areas with $50,514, down from $52,707 in 2000. The state median income increased $212 to $40,547 (Austin American-Statesman).

DEMAND INDICATORS:

• A random telephone survey conducted recently by Seton shows that growth management, economic issues, and health care are the top three community issues for people in the 10 county Austin area (see table below) (Seton).

Housing, Homelessness, Basic Needs:

• First Call for Help/2-1-1 Texas compared January through November 30, 2002 with 2001. First Call reports a 45% increase in households needing rent assistance, 115% increase in families requesting mortgage assistance, a 57% increase in people needing food, and a 36% increase in those needing transportation assistance. The top three types of calls received were for utility bill assistance (4,447 calls), rent assistance (3,558 calls), and food (3,047 calls) (United Way’s First Call for Help/2-1-1 Texas).
• January 2003 foreclosure sales in Travis County are up 68% in comparison to January of 2002. Fourth-quarter foreclosure postings were up 50% from the previous year. Williamson County’s January foreclosures are up 133% (Austin American-Statesman).
• The City of Austin received 1,163 substandard housing complaints in FY 2001-2002, remaining steady over the past few years. Of these complaints, property owners are addressing 93% voluntarily. The remaining 86 cases resulted in a total of $13,075 in noncompliance fines, and of the 86 approximately 25 resulted in demolition orders (Austin American-Statesman).
• A new federal study using people posing as prospective home buyers and renters, found that blacks and Hispanics were discriminated against roughly one-fifth of the time nationwide. In Austin, housing discrimination occurred roughly one in four times, with Hispanic buyers and black renters faring the worst (Austin American-Statesman).
• The Austin Resource Center for the Homeless (ARCH) served 4200 unduplicated clients in the day program and 800 unduplicated clients in the overnight program from October 2001 though September 2002. Between four and 15 new people have been using ARCH services every day. The Church Under the Bridge program has been feeding 500 people weekly (Homeless Task Force).

Physical and Mental Health:

• People’s Community Clinic is turning away an average of 2,000 people every month, including 184 to 210 women a month seeking prenatal care (The Austin Chronicle).
• As of December 1st, there were 11,950 Travis County children enrolled in the Children’s Health Insurance Program (CHIP) (Insure-a-Kid News).
• ATCMHMR served 26,139 people in FY 2001 – up more than 17% in two years (The Austin Chronicle).
• Central Texas is facing a crisis due to the limited number of psychiatric beds available for children and teens. The number of beds has declined as the need has increased. Recently, local officials were faced with sending the next child patient to either El Paso or Wichita Falls because the 46 beds at Austin State Hospital were full (Austin American-Statesman).
• According to the Texas Medical Association, 49% of all doctors are accepting new patients who pay with Medicaid (down from 67% last year). Because of the large difference between what Medicaid and private insurance companies will pay for the same services, some doctors claim that they are barely breaking even when accepting Medicaid payments (WFAA-TV).
• Federal cuts in Medicare payments from $330 to $295 per day are threatening the availability of rehabilitation services for the elderly. Facilities are closing, cutting back on services, or not accepting individuals with expensive medical needs (Austin American-Statesman).
• Texas has the highest number of people without health insurance, ranks 44th out of 50 in per capita spending for health care, and 47th in mental health care. The Texas Criminal Justice Policy Council estimates that at least 150,000 people in the criminal justice system have had some contact with the public mental health system (The Austin Chronicle).
• Statewide, HMOs posted a combined $32.4 million profit and just one-third of them operated at a loss in the third quarter of 2002. However, in Austin, only a third of HMOs operated at a profit during the third quarter (Austin American-Statesman).
• U.S. companies saw an average increase of 14.7% in their workers’ health –benefit costs this year, seven times the rate of inflation. The average employee costs an employer $5,646 this year in health costs, up 56% from $3,594 only five years ago. Small to medium-size businesses had an increase of about 18%, and the percentage of businesses with 10 to 49 employees offering a health plan fell to 62% from 66% in the last year. (The Wall Street Journal).
  

Education:

• In the last three years, the Austin Independent School District tripled the number of distinguished schools and reduced the number of dropouts. Reading and math performance improved (% increase in students passing) for all racial and ethnic groups – African Americans (reading 10.6%; math 17.8%), Whites (reading 4%; math 6.3%), and Hispanics (reading 11%; math 16.7%) (Austin Independent School District).
• 1,537 Central Texas high school students are taking advantage of the Early College Start Program available through Austin Community College. The program is free and offers students an opportunity to receive both high school and college credit for the courses they complete.
• Local education officials are launching an outreach campaign designed to encourage students to enroll in college. Only 4.9% of Texans were enrolled in higher education, a lower rate than in California, Illinois, Michigan, and other states (Austin American-Statesman).
• Twelve Austin teachers have recently received National Board Certification, making the Austin Independent School District the lead in the state for the number of Board Certified Teachers (AISD).
• The Automotive Technology Program at Johnston High School has received certification from Automotive Youth Educational Systems, a nonprofit group supported by the Auto industry. The program will allow graduates to find work as auto technicians after graduation, or get their associates degree (Austin American-Statesman).
• Despite a 2.3% increase in teacher salaries across the state, Texas dropped from 26th to 30th in salary rankings. The average teacher salary in Texas is $39,232 compared to the national average of $44,499 (K-EYE News).

Public Safety:

• Texas has almost 147,000 inmates in state prisons, about 2,000 more than expected, and 1.5% more than at the same time last year. Between 1990 and 2000, the state spent $1.7 billion on prison construction and saw the number of inmates triple to 151,000. Statewide, total crime increased 1.3% from the first six months of 2001 to the first six months of 2002.

Population Projections:

• New figures released in November by the U.S. Census Bureau showed that Austin’s proportion of people with at least a high school diploma, 87%, was the highest in the state (Austin American-Statesman).
• San Antonio, Houston, and Dallas had higher percentages of non-English speakers than Austin’s 26% (Austin American-Statesman).
• Austin’s child poverty rate of 11% was the lowest among Texas’ major metropolitan areas (Austin American-Statesman).
• The percentage of Hispanic immigrants with a high school diploma more than doubled - from 28% in 1970 to 59% in 2000, though Hispanics still tend to be less educated than Americans overall (84%). The national Hispanic population more than doubled during the 1990’s to 35.3 million (Austin American-Statesman).

RESOURCES

RESOURCE ISSUES IN THE COMMUNITY:

• Of 82 organizations responding to the December 2002 Social Services Survey, 37% reported decreases in their annual budgets ranging from $15,000 to $1.2 million. 81% of the organizations reported an increase in demand for services (Travis County Health & Human Services Department, Research & Planning Division).
• The Central East Austin Community Organization (CEACO) Board of Directors voted to cease operations during the first quarter of 2003 due to inadequate financial resources (CEACO Press Release).
• Because of a decrease in donations, Austin Area Interreligious Ministries has cut its $700,000 budget nearly in half and cut its full-time staff from ten to six. The organization is also $43,000 in debt (Austin American-Statesman).
• In response to the need for more holiday donations at the Capital Area Food Bank, Dell employees held a drive to raise 82,000 pounds of food and the DELL Foundation purchased approximately 8,000 turkeys (Austin American-Statesman).
• The Austin Community Development Corp., a non-profit organization that makes loans to small businesses in low-income areas has received an $843,000 grant from the U.S. Treasury, the largest award the group has ever received. Since the agency was founded in 1994, it has used $11million to give out 114 loans, helping to create more than 600 jobs (Austin American-Statesman).
• In an effort to offset a projected $59 million shortfall next year, the Austin Independent School District has frozen all non-teaching positions, and has restricted out-of-state travel (Austin American-Statesman).
• The Austin Independent School District has a received a $15,000 grant from the Texas Bar Association to pay for a family mediation project (Austin American-Statesman).
• Austin Energy gave $100,000 to Metz Elementary to support its student mentoring program (Austin Independent School District).
• The 2002 HUD Continuum of Care grant (SuperNOFA) results have been announced. All renewal projects received funding (including Caritas, LifeWorks, SafePlace, Salvation Army, ATCMHMR, Push-UP, the Housing Authority of the City of Austin, and the Housing Authority of Travis County), for a total of $3,366,661. New funding was designated for the Housing Authority of the City of Austin (HACA), which received an additional $2.2 million from HUD that will go toward rent vouchers for people with disabilities who are on fixed incomes (City of Austin Homeless Services, Austin American-Statesman).

WHAT CAN YOU DO TO HELP

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

CONTRIBUTORS:

Marco Galvan – United Way’s First Call For Help/ 211 Texas
Susan Andersen -Seton
Fred Butler, Sam Woollard, Joseph Wiesenthal – Community Action Network
Beverly Fisher– WorkSource

COMMUNITY ACTION NETWORK PARTNERS: