KEYE-TV News Story On Taxpayer Wage Subsidies – Can We Close Pandora’s Box?

By Bill Oakey – April 21, 2016

Huge thanks to KEYE’s investigative reporter, Walt Maciborski, for prying open this disturbing chapter in Austin’s taxpayer battle against special-interest fee waivers. The story was aired on the 10:00 PM edition of the KEYE news on Wednesday evening. You can watch the video here. The text of the story appears below. But first, one small bit of conjecture. How did this little gem of an issue slide by all of the members of Capital Metro’s Board of Directors? The original contract had called for a construction workers’ wage of $11.39 per hour. But a resolution passed at the Travis County Democratic Convention sparked them to reconsider the living wage portion of the contract. The wage went up to $13.03, to be paid for in part by you and me. While some of us were probably in bed asleep, the new contract was hammered out with lots of special-interest spin. That’s just an educated guess. It sets a bad precedent. But boxes can be opened and boxes can be closed. Pandora’s is no exception.

Close Pandora's_box

Activist says taxpayers paying $500K to get East Austin mixed-use project done

The Plaza Saltillo development project in East Austin is finally on track to be a reality. But are taxpayers picking up part of the bill?

Capital Metro and Endeavor Real Estate Group hammered out a last-minute deal for a 10 acre mixed use housing complex at 5th and Comal streets.

A key part of the deal was to get the workers a living wage of at least $13.03 an hour, a jump from the original plan to pay workers $11.39 an hour.

“The problem is that this new agreement specifies that 50 percent of this difference between $11 and $13 is going to be subsidized by the taxpayers,” AustinAffordabilty.com blogger Bill Oakey said.

That difference is about $500,000.

Oakey says this is a great project for the city and East Austin but he thinks it’s a bad deal for taxpayers.

“And I call that a wage waiver which is a lot like a fee waiver that is commonly given to developers,” Oakey said.

We called Capital Metro to go on camera so we could ask them to explain the costs of this new deal and if this is a fee waiver for the developer. They refused to go on camera. But they gave us a statement.

They say, “Capital Metro’s 50 percent cost share for the living wage increase to $13.03 will be funded only from rent increases on the additional height in the office building over 99 years.”

Capital Metro also says this is new revenue it “will receive from office space (which) is new, un-projected revenue. In the end, it is revenue that Capital Metro didn’t have before, to be applied to transportation costs.”

“Right now we’re headed for trouble,” Oakey said.

He isn’t buying it. He says it’s still money that’s coming from the taxpayer pool to make this project happen and he fears it could get worse.

“To me it’s the precedent that is the most alarming,” Oakey said. “It’s opening Pandora’s Box. And I’m afraid that other taxing entities like the city and the county might follow this dangerous precedent. I’m asking our local officials to please close Pandora’s Box and do not continue this wage waiver subsidy with taxpayer money.”

Musical accompaniment (plus a comedy recording) for this blog posting:

  1. “Bus Driver’s School” – Bob Newhart, from the album, “The Button-Down Mind Strikes Back,” 1960
  2. “Bus Stop,” – The Hollies, 1966
  3. “Magic Bus” – The Who (rare long version), 1968
Advertisements

One thought on “KEYE-TV News Story On Taxpayer Wage Subsidies – Can We Close Pandora’s Box?

  1. Richard Viktorin

    Hey there Bill….how have things been with you?

    Since you are on the affordability beat like no other, do you know perchance if the City Demographer has done any work on economic displacement in Austin, such as outmigration to suburbs and further (Bus Stop To Bastrop I call the phenomenon).

    Wouldn’t it be interesting to know that under Marc Ott, 10 percent (?) of Austin’s 2005 population now lives elsewhere due to the cost of living. In my circle, I have three close friends, and a few others, who now live elsewhere….all due to economic affordability. Brian, David, David and Janna, Sam, Tom, Bert….and a smattering of others too. Citizens banished because they don’t meet the city’s desired earnings and skill requirements for our new economy.

    On the subject below, another victory for the black hole phenomenon known as public private partnership negotiations.

    Thanks,

    Richard Viktorin

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s