Community Overview

November, 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:

• The average weekly wage in the Austin area for the 4th quarter of 2002 dropped from $801.98 to $793.04, a change of $8.94 (Greater Austin Area Workforce Board).
  
• Unemployment in the Central Texas region dropped to 5.5% in September from 5.7% in August. The area has 6,400 more jobs than it did this time last year, representing a 1% growth rate. The bulk of the growth stems from hiring in state and local governments, while the business and professional sectors lost 500 jobs (Austin American-Statesman).

• As of October 15, 5,140 people have been laid off in the Austin area in 2003. The economic climate has also dramatically increased the number of visits to WorkSource Career Centers, where there have been a total of 150,616 customer visits to the centers from January through August of 2003 (Greater Austin Area Workforce Board).
• Nationally, the number of jobs that businesses created in 2002 dropped to its lowest level since 1995. In the last three months of 2002, 7.8 million jobs were eliminated, and only 7.7 million were created. However, the economy grew by 57,000 jobs in September, after losing jobs consistently during the previous seven months (Austin American-Statesman).
• Local businesses report varying employment needs:
  • PropheSi Technologies, a new chip-design company, is moving to Austin and intends to hire 15 employees.
  • Advanced Micro Devices cut 34 jobs in Austin in late October.
  • 3M and AIM Investments will be cutting 115 jobs each in Austin over the next couple months (Austin American-Statesman).
  • TASUS Corporation, a plastic injection molding company that supplies Toyota, will be moving to Austin and hiring for up to 100 jobs in five years (Austin Chamber of Commerce).
• High tech wages in Central Texas dropped from $2.17 billion per quarter in 2000 to $1.31 billion per quarter at the end of 2002 over the same period. Dell reduced their workforce by 6,000, IBM by 400, Motorola by 2,000, AMD by 1,500, and Applied Materials by 1,600 (Austin American-Statesman).
• According to the U.S. Census Bureau’s 2002 American Community Survey, the number of people in the labor force in Travis County climbed from 458,963 to 469,049 between 2000 and 2002. However, the amount of people in the workforce did not increase at a rate equal to the relative increase in population, as the number of unemployed residents more than doubled, going from 17,507 to 35,567 people.

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ECONOMY:

LOCAL

• The number of properties posted for foreclosure in October in Travis County jumped to 365 after dropping the previous month. This represents a 68% increase compared with the postings for the previous year (Austin American-Statesman).
• First quarter retail sales in Travis County were down $93 million, or 3.2% compared to the first quarter of 2002. Retail sales per employed person for the first quarter of 2003 were down to $5,648.67, a decrease of 6.3% from the same period last year. In addition, city sales tax receipts in September fell to $7.945 million, which is a 5.8% decrease from the same month in 2002. However, city sales tax receipts rose 4.1% in September from the same month last year. This surprised City officials as it represents the only such increase since March of 2001 (Travis County Auditor’s Office / Austin American-Statesman).
• Local businesses reported mostly improved economic conditions:
  • Motorola Inc. reported a 4.5% gain in sales compared with a year earlier. However, sales were down 4% from the same quarter of last year for the Austin-based operation.
  • Cirrus Logic Inc. reported its first quarterly profit in more than two years.
  • 3M Corporation reported a 22% gain in profit on stronger sales for the third quarter.
  • Silicon Laboratories Inc. reported net income of $13.9 million, with sales up 60% from the same quarter a year ago, while profits went up 76%.
  • AMD reported sales up 88% from the same quarter a year ago, and stocks were at a new 52-week high at $15.20 a share in mid October (Austin American-Statesman).
• According to the U.S. Census Bureau’s 2002 American Community Survey, the number of Austin-San Marcos residents who lived below the poverty level in the twelve months prior to the survey increased in almost every category from 2000 to 2002. The total number of families living below poverty level increased from 20,914 to 27,071 (up 29%); families with female heads of household living in poverty increased from 11,724 to 12,906 (up 10%); and individuals increased from 132,229 to 161,920 (up 23%). The chart below illustrates the percent of individuals by age group living in poverty:

Percent of People in Poverty in the Austin-San Marcos MSA by Category

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STATE

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NATIONAL

• The Census Bureau’s Annual Report showed the number of people living below the poverty line rose to 34.6 million in 2002, from 32.9 million in 2001. Overall, the percentage of the U.S. population living in poverty rose to 12.1% in 2002 from 11.7% percent in 2001. The poverty line was defined in 2002 as $18,244 for a family of four (Austin American-Statesman).
• The U.S. economy grew at the fastest pace in nearly two decades at an annual rate of 7.2% from July through September. The economy grew at a 1.4% annual pace from January to March, and 3.3% rate from April to June (Austin American-Statesman).
• Mixed economic signs from national index readings are as follows:
  • For the third month in a row, the manufacturing index reading showed expansion, at 53.7 in September (a rate above 50 shows expansion).
  • The value of building projects under way was at $882.7 billion in August, the strongest showing since January.
  • The consumer confidence index fell to 76.8, down nearly five points from the revised 81.7 in August. The decrease in consumer confidence index was the biggest decline since July.
  • August showed a 0.8% increase in consumer spending, following a 0.9% rise in July. In addition, disposable income climbed 0.9% in August (Austin American-Statesman).
    

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DEMAND INDICATORS:

Basic Needs:

• On October 23, the Caritas Community Kitchen served 500 people for lunch, the largest number of diners for one meal in the history of the agency. Prior to 2003, it was unusual for the agency to serve more than 400 meals a day. (Caritas of Austin).
• During the period of July through September, United Way Capital Area’s 2-1-1 information and referral hotline experienced a 20% increase in basic needs related calls from the same time last year. Also during this time period, there was a 71% increase of calls from individual and families needing information on low cost or subsidized housing options (2-1-1 Texas, A Service of United Way Capital Area).
• The Meals on Wheels and More August 2003 newsletter reports that for the first time this year the number of meals served on a daily basis exceeded 2,000, and by mid-August the daily count had reached 2,044,more than 17% ahead of last year at this time (Meals on Wheels and More).

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Housing:

• Existing homes sales in Central Texas rose 34% in September 2003 with 1,724 closings compared to 1,289 houses being sold in September of 2002. September sales were down slightly after reaching an all-time monthly high in August, selling 1,957 homes. The median home price in the Austin area declined 1.4% to $157,740. Austin’s second-quarter median home price was $161,200, up only 0.2% from the same quarter a year ago. (Austin American-Statesman).
• Mortgage rates were down in October for the fourth straight week, averaging 5.77% for a 30-year fixed-rate mortgage. This is up from the year’s best rates, which were 5.1% in June (Austin American-Statesman).
• Foreclosure postings are up 64% in Travis County compared with the same 11 months of 2002. Although most postings are for modest houses in the $90,000 to $150,000 range, there has been a sharp increase in postings in more affluent neighborhoods (Austin American-Statesman).
• Nationally, home loans to minorities are growing at double-digit rates. However, African Americans and Hispanics are still twice as likely as non-Hispanic whites to be rejected when they apply for a mortgage according to a recent study by the Association of Community Organizations for Reform Now. In addition, upper income African Americans and Hispanics were rejected more frequently than moderate income whites (Austin American-Statesman).
• According to the U.S. Census Bureau’s 2002 American Community Survey, the estimated number of housing units in the Austin-San Marcos MSA increased by 45,777, (9.2%) to 541,781 between 2000 and 2002. Occupation rates decreased from 94% to 91%, leaving the number of unoccupied homes at 46,646. In addition, the number of housing units lacking complete plumbing or kitchen facilities appears to have increased sharply. Table 1 shows these changes:
  

  	2000	2002	% Increase
  Total Units	496,004	541,781	9.2
  Lacking complete plumbing	1,509	2,169	43.7
  Lacking complete kitchen	1,861	5,259	182.6
  No phone service	11,454	21,231	85.4

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Physical and Mental Health:

• The Texas Workforce Commission announced that it will cut Medicaid benefits to welfare recipients who do not follow the conditional rules for eligibility for Temporary Assistance for Needy Families. The rule will take effect November 18. An estimated 2,379 adults could lose their health benefits for a violation of rules such as not immunizing their children or using illegal drugs (Austin American-Statesman/ KEYE News).
• Medicaid enrollment in Travis County continues to climb – Total enrollment is up 7% this year (to 66,220). The number of young enrollees (age 0-18) has increased 11% (to 45,255) (Texas Health and Human Services Commission).
• Due to the state budget cuts and tighter eligibility restrictions adopted by the 78th legislature, statewide enrollment in the state’s Children’s Health Insurance Program has already dropped by 11%. Enrollment was down to 458,166 as of November 1, compared to 512,986 in June 2003 (Center for Public Policy Priorities).
• A report published by HealthGrades, a Colorado-based health care analysis company, found that Texas hospitals ranked in the bottom half among the states when evaluated on patient complications and deaths from five common medical procedures. Texas hospitals ranked 30th among the 50 states in the quality of care delivered to patients. Patients in Texas had a 54.9% higher risk of dying in the hospital than those in New York(Austin American-Statesman).
• A new survey of 100 Central Texas employers reported that half of the companies surveyed said they plan to increase health insurance deductibles next year, up from 37% who did so this year. Almost half said they plan to raise co-pays for office visits and the employee share of monthly premiums (Austin American-Statesman).
• According to the U.S. Census Bureau, the number of Americans who lack health insurance climbed by nearly 6% in 2002, to 43.6 million, the largest one-year increase in a decade. Overall, 15.2% of Americans were uninsured last year, up from 14.6% in 2001. Texas has the highest rate of uninsured residents, at 24.7% (Austin American-Statesman).
• Some of the mental health benefits initially cut from the Children’s Health Insurance Program earlier this year will be restored, including: 30 days of inpatient mental health treatment per year, 30 outpatient visits for mental health treatment per year, substance abuse detoxification services, 30 days of residential treatment, and 30 outpatient visits for substance abuse treatment(Insure-A-Kid).
• According to a recent survey, 27.9% of Texas college students reported smoking in the last 30 days, compared to 18.9% of adults from the same geographic area. There is significant difference among racial groups among those surveyed; 47% of White college students reported smoking, while 18.3% of Black students and 34.5% of Hispanic students reported smoking (University of Texas at Austin).

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Transportation

• The newly passed Capital Metro budget for 2003-2004 totals $114.7 million, an 8.3% increase, in order to account for growth in salary and benefits. The agency's primary bus service will run 3% fewer hours next year. However, the agency foresees a 1.6% increase in ridership over projections for this year, due to better scheduling of buses, to a total of 35 million rides (Austin American-Statesman).
• A study by the Texas Transportation Institute shows that congestion in Austin increased between 2000 and 2001 more than in other Texas Cities, and more than in all but a few of the 75 cities and towns studied nationwide. The study also found that Austin area streets and highways continue to have more delays at peak traffic periods than any of the 20 other midsize cities studied (Austin American-Statesman).

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Education and Workforce Development

• Overall enrollment at the University of Texas dropped to 51,438 students from last year’s record 52,216 students, yet the number of students still remains the largest in the nation. This year’s freshman class has a larger percentage of African American and Hispanic students; Hispanics make up 16.3% of the freshman class, compared to 14.3% last year, while the percentage of African American students went up from 3.4% to 4.1% (Austin American-Statesman).
• All school districts in Travis County were deemed to have met “Adequate Yearly Progress” under the new accountability standards of the No Child Left Behind federal education reform legislation. These districts include Austin, Pflugerville, Manor, Eanes, Del Valle, Lago Vista, and Lake Travis (Texas Education Agency).
• Austin Independent School District received an Advanced Placement Initiative Grant from the U.S. Department of Education totaling $267,153. The grant will fund Project SOS (Supporting Optimal Scholarship), which focuses on increasing enrollment and involvement of economically disadvantaged students in Advanced Placement courses in selected high schools (AISD).

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Public Safety:

• Travis County is investing $330,000 in a pilot after-school program at Pearce and Webb middle schools in an effort to keep students out of the criminal justice system. The program will serve approximately 750 children, aged 10 to 14 (Austin American-Statesman).
• The Texas Abuse/Neglect Hotline for the Department of Protective and Regulatory Services has received numerous complaints about the waiting time to report child abuse or neglect. Hotline operators took 4,500 more calls in the first 10 days of September than they did in the last 10 days of August, which accounts for the long waits on the hotline (Austin American-Statesman).
• The Convicted Offenders Re-entry Effort, a boot camp that serves as a rehabilitative alternative to prison, is closing due to budget constraints for Travis County. The cost of the program was about $306,000 a year, and was one of the few programs not required by state law (Austin American-Statesman).
• CASA (Court-Appointed Special Advocates) reported that their 388 volunteers served 1,036 children (56% of all the children in the court system needing ad litem services) as Guardians ad litem during the most recent fiscal year ending June 30, 2003. Of all the CASA programs in Texas, CASA of Travis county increased the most in the number of new volunteers trained and additional children served. Guardian ad litem services are paid at $15.77 per hour in Travis County, which means that CASA volunteers saved the county approximately $1,468,502 (CASA of Travis County).
• Serious violent offences at schools in the Austin area during the 2002-2003 school year vary by district. The total number of serious incidents per 1000 students in San Marcos totaled 167.9, Pflugerville had 72.9, Hays had 36.9, Round Rock had 29.2, AISD had 28.2, Del Valle had 20.4, Eanes had 8.5, and Georgetown had 5.6 (Austin American-Statesman).

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Demographic Changes:

• The percentage of people over 65 will nearly double in two decades in Central Texas. The only inpatient hospice facility for the terminally ill in the Austin area has 15 beds, far fewer than the number available in other communities of similar size, and usually has a waiting list for those beds (Austin American-Statesman).
• The U.S. Census Bureau’s 2002 American Community Survey shows an eight percent increase in total population of the Austin-San Marcos Metropolitan Statistical area, or 100,180 people, (from 1,212,806 to 1,312,986). The number of foreign-born residents increased by 37%, (from 129,182 to 177,019). In addition, not only has the number of residents who speak English as a second language increased, but the number of those residents who speak English ‘less than very well’ increased, as shown in the Table 2 below.
  
  Table 2: Number of Austin-San Marcos Residents Speaking English as a Second Language
  

  	Number of People			Number speaking English ‘less than well’
  	2000	2002	% Change	2000	2002	% Change
  Spanish Speakers	219,144	248,152	13.2	73,803	104,876	42.1
  Other Indo-European Languages	26,664	21,741	-18.5	2,196	4,095	86.5
  Asian and Pacific Islander Languages	29,783	37,265	25.1	17,688	20,270	14.6

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RESOURCES:

• The results of the 2003 City of Austin’s annual Community Needs Survey were consistent with the results from 2000, 2001, and 2002, with ‘lack of affordable housing’ ranking as the top concern among respondents. Other top concerns were job creation and training, more homeless/emergency/domestic violence shelters, reducing the waiting list for subsidized community housing, and access to affordable child care(City of Austin).
• For the first time since 1983, grantmaking foundations nation-wide reported reduced giving for 2002. In 2001, foundation giving totaled $30.5 billion, which decreased to a total of $30.2 billion in 2002. However, the number of grantmaking foundations climbed by 5,228, the second largest increase on record (The Nonprofit Times Weekly).
• Texas will get three federal grants totaling nearly $22 million dollars to expand access to substance abuse treatment services. Nearly $3.9 million will go to increase the state’s overall capacity to provide effective, coordinated and integrated treatment services (KEYE News).
• More than 1,100 local Dell employees contributed to Dell’s second annual Global Community Involvement Week, when employees volunteer with local non-profits (Austin American-Statesman).
• Advanced Micro Devices announced that they will contribute $25,000 to the Basic Needs Services Council in order for the local collaboration of human services providers to implement a web-based data sharing information system. The new database will streamline intake and eligibility procedures for clients seeking basic needs assistance, defined as food and rent/mortgage/utility assistance (Community Action Network).
• A Glimmer of Hope Foundation, an Austin-based charitable giving foundation, awarded four $25,000 grants to Austin non-profits in October. Over the next ten years, the foundation will give $5 million to charities that work with underprivileged youth in East and South Austin. Next year, the foundation plans to fund 20 projects with $500,000 (Austin American-Statesman).
• The 16th annual AIDS Walk Austin, benefiting AIDS Services of Austin, had a record 7,000 people in attendance, up from 5,000 last year. The agency projects that the event raised $160,000 of the $200,000 target amount. The amount raised will be down $20,000 from last year due to a decrease in corporate sponsorship. However, walkers raised 50% more than last year (AIDS Services of Austin).
• The U.S. Department of Health and Human Services announced a $928,836 grant for Austin and Travis County to implement community-based initiatives that will promote better health and prevent disease. The 5-year project, led by the Austin/Travis County Health and Human Services Department, will aim to improve health status and reduce health disparities throughout our community (Austin/Travis County Health and Human Services).
• The district-wide College Readiness Program initiated by AISD and the Michael and Susan Dell Foundation (MSDF), supported by a $1.4 million grant in the 2002-2003 school year, resulted in significant gains within Austin's 12 high schools over the previous year. Due to these positive results, the Foundation is providing $2.3 million to expand key areas of each program for the 2003-2004 school year (AISD).

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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 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
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
Karen Cox- CASA of Travis County
Susan Andersen – Seton
Saralee Tiede – Austin Chamber of Commerce
Julia Spann – Caritas of Austin
Marco Galvan – 2-1-1 Texas, A Service of United Way Capital Area
Lee Manford – AIDS Services of Austin

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COMMUNITY ACTION NETWORK PARTNERS:

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