Author Archives: Bill Oakey

About Bill Oakey

I am retired from the State of Texas as an accountant. I am now an artist in Austin, doing photographic art. I'm also a lifelong music fan and a computer geek.

Vote Against Proposition A, But For Props J And K

By Bill Oakey, November 1, 2018

It has been a long while since I updated this blog. But I wanted to get the word out about the propositions on the ballot. There is one day left for early voting, and if you miss that, be sure to vote on Tuesday.

Vote Against A Quarter Billion Dollars For Affordable Housing!

The City Council really went over the edge on this one. Remember when affordable housing bonds were in the $50 to $75 million range? Or at the most, not much over $100 million? If this quarter-billion bonanza passes, you can be sure that it will become the new standard. If it doesn’t, then it would be going even higher! We simply cannot afford to allow that kind of precedent to get started.

I don’t even know what the City Council was thinking! We had a $720 million mobility bond election in 2016. Then, just last year AISD hit us over the head with $1 billion in bonds. And they did that during a period of rapid declines in enrollment. It’s as if our local officials have decided that money is no longer an issue for taxpayers. We all have so much money, that we hardly know what to do with it. If that’s the case, I wish somebody would show me what rock to look under to find my extra pile of cash.

Here’s the problem with spending a quarter-billion on affordable housing. The City has tried for years to set up “density bonus” programs and so-called Smart Housing initiatives. But none of them have ever been very successful. So, now it appears that they have simply thrown in the towel. Just let the taxpayers pay for it. We need to encourage all of our family and friends to reject that notion with an exuberant, resounding NO vote on Proposition A.

Vote Yes on Prop J – Let the Public Decide on Our Next Major Building Code

The whole CodeNext debacle was a developer-led effort to turn Austin into San Francisco or Portland. It stands as one of the most colossal boondoggles in the City’s history. Across the city, various groups of citizens spent weeks, months and years hovered over maps and charts as they worked with City officials to develop their individual neighborhood plans. The developers made no secret of the fact that they wanted CodeNext to completely obliterate those neighbored plans.

The hodgepodge of a report that finally emerged from CodeNext was so confusing and marred by lack of trust, that the City Council abandoned it in time to keep it from ruining some of their re-election plans. This was unquestionably the fact with our mayor. There is also little doubt that whatever the City Staff does with CodeNext, it will probably come back to the Council as merely an attempt to dress up what the consultants tried to foist upon us to begin with.

Our best solution is to vote for Prop J, to require voter approval of all major updates to the Land Development Code. This would ensure that the City Council recognizes that it isn’t just the real estate industry and the developers who matter when it comes to such a major change. It is the well-being of current residents in their cherished neighborhoods that matters most.

Don’t Listen to the Fear-Mongers – Vote For Prop K!

Think real hard when you ask yourself this question. When has efficiency ever caused calamity in a City? Who has ever been chased down and attacked by a menacing creature, threatening to make the City most efficient and cheaper for the taxpayers? You have heard the fear-mongers wail about “dark money” and raise the evil specter of the Koch Brothers. I seriously doubt is those guys have ever heard of Prop K. And even if they have, it doesn’t matter. The independent efficiency audit will be completely under the control of the City Council. They get to decide who gets hired to run the audit. They get to decide what elements of the recommendations get adopted. And all of us will get a chance to provide our input throughout the entire process.

There are both prominent liberals and conservatives backing Prop K, including David King and Ed English. Should there be better transparency with regard to contributions to these PAC’s? Absolutely! If dark money was used and somebody wants to tighten the transparency requirements, or even challenge the lack of disclosure in this case, we should be all for that. But it has nothing to do with the validity of the audit.

Citywide efficiency audits are not carried out by internal audit staff. They do not have the time or the specialized skills. That’s why numerous cities and states across the country have had positive results from these types of audits. The usual crowd of go-along-to-get-along naysayers are opposing Prop K. They are using whatever fear tactics they can conjure up. Of course the City employee unions are scared to death of it. They are worried about layoffs. It may well be that Austin needs to do some serious streamlining of operations. But that doesn’t mean that employees couldn’t be transferred. And positions could be eliminated by attrition rather than layoffs. And the cost of the audit? It would be made up probably ten times over by the good efficiency recommendations.

Don’t be scared of efficiency. There is no evil monster hiding in the closet! Bogeymen do not lurk in the shadows for the pursuit of saving money for taxpayers. Lon Chaney would never have even considered it.

 

Advertisements

The School Property Tax Double Whammy – Please Spread The Word On This!

By Bill Oakey – February 21, 2018

I have said this before, and I’ll say it again. AISD’s property taxes are the single biggest threat to Austin affordability. Nothing else even comes close. But if you thought the Robin Hood funding disparity was the only issue, guess what…That is only half of the problem. Each half of the problem is pretty scary, but taken together it’s a disaster. So, as soon as you finish reading this, please share it with as many people as you can. Our only hope in surviving the disaster is if enough people get motivated to speak out against it.

The State of Texas Is Double-Dipping on Your School Property Taxes…Here’s How It Works

Several years ago, the total State share of public school funding was 50%. The rest came from local property tax dollars. And as you know, big cities like Austin have to send back hundreds of millions of dollars each year in Robin Hood “recapture” payments. ($533 million this year). Those funds go to “property poor” school districts.

Every year for the past several years, our property appraisals have been going up. This is happening in all of the big cities that contribute to the Robin Hood system. That has caused school property taxes to skyrocket. And that’s where the double whammy comes in. The State is siphoning off this windfall of extra revenue, and spending it for non-educational items in the budget.

Here’s how it works. Technically, all of the Robin Hood revenue does flow to the property-poor school districts. But each year, as the pot of recapture money increases, the State decreases its share of public school funding. The “leftover money” from reducing public school funding gets spent on other items in the budget. This is a backdoor method of enacting a full-blown statewide property tax! That type of tax is unconstitutional, and it was ruled unconstitutional by the lower court. Then, the Texas Supreme Court ruled that it is constitutional, but “badly flawed.”

Let’s Take a Look At the Seismic Shift In State School Funding

State Representative Donna Howard’s office prepared this graphic that illustrates the problem. Here are the highlights:

  1. The State contribution to public school funding sinks from 45.3% to 31.7% from 2011 to the projection for 2019.
  2. The local property tax share shoots up from 54.7% to a projected 68.3% in the same period
  3. School property taxes make up 54% of your property tax bill.

Here’s how that looks in actual dollars for the same 8-year period:

  1. Local property tax share increases by $7 billion
  2. State share decreases by $3 billion

If you think all over those numbers look scary, just consider this – Every single one of them will get worse every single year unless we organize and mobilize to push for reforms!

Is the Robin Hood System Bad, Or Is It REALLY Bad?

These figures come from the AISD website. And remember, Robin Hood is only half of the double whammy…

  1. AISD is projected to send nearly $2.6 billion in recapture payments to the State between 2016 and 2020.
  2. By 2019, more than half of AISD’s local school property tax dollars will be sent back to the State

How Does Texas Public School Funding Compare With Other States?

On a national basis, Texas looks pitiful. You would think that business leaders would be the first to demand better educated candidates to fill critical jobs. But in Texas, “business-friendly” means lower taxes and less regulation. I would encourage these folks to take a hard, sobering look at some of these numbers. The U.S. Census Bureau’s latest report shows these rankings for per-student public school spending in fiscal year 2015. (Imagine how bad it must be now!)

  1. State funding per student: Texas ranked #47, with $4,189
  2. Local property tax funding per student: Texas ranked #19, with $5,716

What Are Our State Politicians Doing About This?

Some would like to spend more money on charter schools and less on public schools. And some want to restore the State share of public school funding to at least 50%. That’s where it was before the real estate boom caused the annual explosion of our property appraisals. But there is a cruel irony in all of this.

Gov. Greg Abbott and Lt. Governor Dan Patrick are blaming your high property taxes on cities and counties. They are running their reelection campaigns on a promise to put a cap on the revenue that cities and counties can raise through property taxes.  This is a slick political trick that takes the growing public frustration over high property taxes and spins it upside down and backwards.

The State school financing system is the problem! And if it continues on its current path, Austin taxpayers will indeed face a true disaster. I contend that it is simply not sustainable. Unless enough wealthy people move here to completely displace nearly everyone who has lived in Austin for more than ten years or so. And after a while, even those newcomers would start to fume over the property taxes. The projected numbers are staggering.

Here’s What You Can Do to Help

  1. If you get a flier in the mail from anybody running for office that promises property tax reform by blaming it on city or county taxes, stick it right here:
  2. Send this blog post to every pertinent organization that you belong to. Encourage them to distribute it to all of their members. If they have regular meetings, ask them to put it on their upcoming agenda for discussion. Invite good speakers to make a presentation.
  3. Make sure that you and your family and friends vote for candidates that recognize and admit the true cause of high property taxes!

Finally, Here Are Two Things That We Need to Fight For

  1. The Robin Hood recapture system needs to be reformed to make it fairer for Austin and the other big cities. Austin has a huge number of students living in poverty.
  2. The State needs to stop double-dipping on our local school property taxes. They need to increase the State share of funding for public schools back to at least 50%, if not more.

Let’s Bring AISD Into the CodeNext Process – To Avoid An “Affordability Perfect Storm”

By Bill Oakey, January 22, 2018

The following is an email that I sent this morning to Mayor Pro Tem Kathie Tovo and City Council Member Alison Alter:

Hello Mayor Pro Tem Tovo & CM Alter:

At a meeting about affordability issues at AISD last week, I offered to try to help bring AISD and City officials closer together on CodeNext. So, let me introduce all of you in this email to Beth Wilson, AISD’s Director of Planning Services. I am also sending this email to Nicole Conley Johnson, Chief Financial Officer for AISD and her Executive Assistant, Amanda Ortiz.

It is my understanding that AISD would like to have much greater access to the CodeNext revision process, and to have their concerns addressed fully before the final draft is completed.

As an affordability and taxpayer advocate, I believe that CodeNext should be structured in a way that would allow families with children to remain in their homes. And new development in many existing neighborhoods should be affordable for families with children. In recent years, too many families have been forced to leave AISD because of high property taxes and gentrification.

We can see the devastating results reflected in AISD’s annual student enrollment drops. To add insult to injury, AISD is projected to send $2.6 billion in local tax revenue back to the State over the next five years, under the “Robin Hood” school finance system. This toxic combination of factors could result in an “affordability perfect storm” for AISD and Central Texas taxpayers.

Therefore, I strongly recommend that the City work closely with AISD to ensure that the CodeNext process not only includes full participation by AISD, but also implements code policies that reflect their concerns.

Thank you for any help you can provide to facilitate the engagement between the City and AISD. Below is an American-Statesman editorial that focuses on the importance of this collaboration:
Viewpoints: City should not overlook Austin ISD in CodeNext talks
 
By Editorial Board
Posted: 10:07 a.m. Friday, November 24, 2017
 

“We need a seat at the table.”

That is the message the Austin Independent School District is sending to the city of Austin with a proposed resolution regarding CodeNext that trustees are expected to approve Monday.

A firm statement outlining the district’s position on CodeNext is needed because city officials thus far have overlooked – if not ignored — Austin ISD’s input and concerns, though the district has a huge stake in the rewrite of city zoning and land-use rules, said Kendall Pace, president of the school board.

Consider that Austin ISD is one of the city’s largest property owners with 145 facilities. Its boundaries encompass 230 square miles, said chief financial officer Nicole Conley Johnson. That’s about three-fourths the size of New York City, about 305 square miles. With 11,500 employees, the district also is one of the region’s largest employers.

Austin ISD’s interests, however, go beyond property and employment issues. They include families. At this point, the district is losing families and students because of massive redevelopment in core neighborhoods — mostly in East Austin — that is displacing lower-income families with kids to make way for higher-income families with fewer or no children.

Even as Austin’s population is growing, the district’s enrollment, now at 82,000, is declining. Austin ISD administrators and trustees worry that without key changes to CodeNext, those trends will accelerate.

“Displacement of families living in those core Austin neighborhoods – and not competition from charter or private schools – is the primary driver for our enrollment declines,” Conley Johnson said.

Pace, Conley and others said they’ve tried to get a coordinated planning effort going with the city, but have been ping-ponged around different offices without progress.

That back-and-forth bureaucracy prompted Austin ISD officials to take a more public, forceful approach with something in writing they aim to back with a vote in hopes of grabbing the city’s attention: a resolution that mostly is centered around stabilizing enrollment declines by holding on to and creating more affordable housing.

Specifically, the resolution emphasizes the need for CodeNext to create more duplexes, townhomes, apartments and additional dwelling units that are affordable for families earning 60 percent or less of Austin’s median family income and housing for teachers and staff.

It also calls for limits on up-zoning that doesn’t help lower-income families, especially in areas affected by gentrification, such as East Austin.

Another request encourages the preservation of older-market, affordable, single-family detached homes, duplexes and multi-unit apartments by not increasing entitlements on existing properties without a clear affordability requirement.

The resolution calls for an expansion of incentives, such as density bonuses that permit developers to build taller or with greater density in exchange for benefits, such as affordable housing. But they should be combined with other incentives or funding to create permanently affordable housing instead of studio or one-bedroom apartments.

It’s worth noting that more than half Austin ISD students are economically disadvantaged. Their families depend on “deeply affordable” or subsidized housing. The resolution points out that most new housing units that are being built are small, expensive apartments and condos that aren’t family friendly. It notes that just 46 children were enrolled in Austin ISD in 6,895 new units that were sampled.

The district’s resolution also objects to CodeNext’s reductions for onsite parking in residential and commercial areas near schools, which they say could create safety problems for students and hinder access to school grounds.

In our view, those are legitimate concerns that should be addressed by the city sooner rather than later. The city’s lack of response so far only gives credence to critics who complain that the CodeNext rewrite is too heavily dominated by a narrow group of city staffers and paid consultants.

With so many unanswered questions regarding CodeNext, which would determine the city’s physical and economic makeup for decades to come, we recently called for a pause so the city could answer residents’ concerns. Following that, the city announced it would slow down the release of a third draft of CodeNext and perhaps push back its April deadline for approval.

That is progress. But the city must do more in ensuring that Austin residents understand how CodeNext – contained in more than 1,300 pages — would impact their communities, then seek their input on revising proposals that don’t address Austin’s affordability crisis, economic segregation and the displacement of families leaving Austin ISD because they no longer can afford the rent, mortgage or property taxes.

They should answer concerns of others, who point out that Austin needs more so-called missing-middle housing for the thousands of people flocking to Austin each year. Questions linger about how CodeNext would address Austin’s growing traffic congestion. Over the next decade, the city will need about 130,000 homes to fill Austin’s housing needs, city officials have said.

We understand that density, which allows more to be built on less land, is a way to address such challenges. But up-zoning for the sake of generating more housing — without an eye on whether that would worsen the housing crisis for working and low-income families, further segregate the city, or accelerate enrollment declines in public schools — could prove disastrous.

“We need a seat at the table,” Pace told us in explaining the need for the resolution. “We want input.”

The city should waste no time in making room for Austin ISD at the CodeNext discussion.

New Blog Launches To Help Support Austin’s Music Industry

By Bill Oakey – January 18, 2018

Anyone who has lived in Austin for a while knows that we are very proud of our nationally recognized creative industries. This includes music and all of the arts. But affordability issues have cut deeply into the well-being of many musicians, artists and venue owners. High rents caused by high property taxes and gentrification are the main sources of this problem.

So, today I am launching a new blog called, KeepAustinMusicAlive.com. This blog will feature occasional updates on efforts by local music and arts advocates to find solutions to some of the affordability issues. You will also find some entertaining surprises on the blog, beginning today. So, go ahead and click on it now and consider following KeepAustinMusicAlive.com.

The Scary Future For America’s Middle Class

The following commentary was published in The Conversation. Steven Pressman is a professor of economics at Colorado State University.

GOP tax plan doubles down on policies that are crushing the middle class

By Steven Pressman, December 20, 2017

The U.S. middle class has always had a special mystique.

It is the heart of the American dream. A decent income and home, doing better than one’s parents, and retiring in comfort are all hallmarks of a middle-class lifestyle.

Contrary to what some may think, however, the U.S. has not always had a large middle class. Only after World War II was being middle class the national norm. Then, starting in the 1980s, it began to decline.

President Donald Trump has portrayed the tax plan Congress is wrapping up as a boon for the middle class. The sad reality, however, is that it is more likely to be its final death knell.

To understand why, you need look no further than the history of the rise and decline of the American middle class, a group that I’ve been studying through the lens of inequality for decades.

The middle class rises

The middle class, which Pew defines as two-thirds to two times the national median income for a given household size, began to grow after World War II due to a surge in economic growth and because President Franklin Delano Roosevelt’s New Deal gave workers more power. Before that, most Americans were poor or nearly so.

For example, legislation such as the Wagner Act established rights for workers, most critically for collective bargaining. The government also began new programs, such as Social Security and unemployment insurance, that helped older Americans avoid dying in poverty and supported families with children through tough times. The Home Owners’ Loan Corporation, set up in 1933, helped middle-class homeowners pay their mortgages and remain in their homes.

Together, these new policies helped fuel a strong postwar economic boom and ensured the gains were shared by a broad cross-section of society. This greatly expanded the U.S. middle class, which reached a peak of nearly 60 percent of the population in the late ‘70s. Americans’ increased optimism about their economic future prompted businesses to invest more, creating a virtuous cycle of growth.

Government spending programs were paid for largely with individual income tax rates of 70 percent (and more) on wealthy individuals and high taxes on corporate profits. Companies paid more than one-quarter of all federal government tax revenues in the 1950s (when the top corporate tax was 52 percent). Today they contribute just 5 percent of government tax revenues.

Despite high taxes on the rich and on corporations, median family income (after accounting for inflation) more than doubled in the three decades after World War II, rising from $27,255 in 1945 to nearly $60,000 in the late 1970s.

The fall begins

That’s when things started to change.

Rather than supporting workers – and balancing the interests of large corporations and the interests of average Americans – the federal government began taking the side of business over workers by lowering taxes on corporations and the rich, reducing regulations and allowing firms to grow through mergers and acquisitions.

Since the late 1980s, median household incomes (different from family incomes because members of a household live together but do not need to be related to each other) have increased very little – from $54,000 to $59,039 in 2016 – while inequality has risen sharply. As a result, the size of the middle class has shrunk significantly to 50 percent from nearly 60 percent.

One important reason for this is that starting in the 1980s the role of government changed. A key event in this process was when President Ronald Reagan fired striking air-traffic control workers. It marked the beginning of a war against unions.

The share of the labor force that is organized has fallen from 35 percent in the mid-1950s to 10.7 percent today, with the largest drop taking place in the 1980s. It is not a coincidence that the share of income going to earners in the middle fell at the same time.

In addition, Reagan cut taxes multiple times during his time in office, which led to less spending to support and sustain the poor and middle class, while deregulation allowed businesses to cut their wage costs at the expense of workers. This change is one reason workers have received only a small fraction of their greater productivity in the form of higher wages since the 1980s.

Meanwhile, the real buying power of the minimum wage has been allowed to erode since the 1980s due to inflation.

While the middle class got squeezed, the very rich have done very well. They have received nearly all income gains since the 1980s.

In contrast, household median income in 2016 was only slightly above its level just before the Great Repression began in 2008. But according to new unpublished research I conducted with Monmouth University economist Robert Scott, the actual living standard for the median household fell as much as 7 percent due to greater interest payments on past debt and the fact that households are larger, so the same income does not go as far.

As a result, the middle class is actually closer to 45 percent of U.S. households. This is in stark contrast to other developed countries such as France and Norway, where the middle class approaches nearly 70 percent of households and has held steady over several decades.

The Republican tax plan

So how will the tax plan change the picture?

France, Norway and other European countries have maintained policies, such as progressive taxes and generous government spending programs, that help the middle class. The Republican tax package doubles down on the policies that have caused its decline in the U.S.

Specifically, the plan will significantly reduce taxes on the wealthy and large companies, which will have to be paid for with large spending cuts in everything from children’s health and education to unemployment insurance and Social Security. Tax cuts will require the government to borrow more money, which will push up interest rates and require middle-income households to pay more in interest on their credit cards or to buy a car or home.

The benefits of the Republican tax bill go primarily to the very wealthy, who will get 83 percent of the gains by 2027, according to the Tax Policy Center, a nonpartisan think tank.

Meanwhile, more than half of poor and middle-income households will see their taxes rise over the next 10 years; the rest will receive only a small fraction of the total tax benefits.

From virtuous to vicious

While Republicans justify their tax plan by claiming corporations will invest more and hire more workers, thereby raising wages, companies have already indicated that they will mainly use their savings to buy back stock and pay more dividends, benefiting the wealthy owners of corporate stock.

So with most of the gains of the $1.5 trillion in net tax cuts going to the rich, the end result, in my view, is that most Americans will face falling living standards as government spending goes down, borrowing costs go up, and their tax bill rises.

This will lead to less economic growth and a declining middle class. And unlike the virtuous circle the U.S. experienced in the ‘50s and ’60s, Americans can expect a vicious cycle of decline instead.

Huge Enrollment Drop Coming To AISD

By Bill Oakey, January 12, 2018, Updated January 15, 2018

Two years ago, KXAN’s Kylie McGivern reported that AISD was projected to lose 6,140 students over the next decade. Since then, the school district has struggled to try to slow down this trend. Last year they implemented a new policy to allow out-of-district students to transfer free to AISD. That effort yielded some positive results, but not enough to change the fact that significant enrollment declines will continue. In an upcoming blog piece, I will delve into the latest numbers and discuss the demographics and housing aspects. Why is all of this happening? Most of it comes down to one word:

Affordability!

Austin’s precarious real estate boom is bringing lots of young hipsters and couples without children to town, who are living in multi-unit housing complexes. Families with children, living in single-family homes, are being taxed out of their homes in alarming numbers. See the KXAN news story for some perspective on what one of those families is going through. They do not want to leave Austin, and it’s a crying shame that so many are being forced out.

To add insult to injury, the second highest cost impact on family budgets, next to housing, is transportation. Most of the new roads being built for commuters are planned as toll roads. And nearly all of those will have so-called “managed lanes.” Those are the ones where the toll rates rise as the traffic increases. Longtime residents who have paid their taxes and contributed to their community for most of their lives will be forced to pay high monthly toll bills. Or else, they’ll be confined to the slow lanes, as they watch the wealthy zip by them in the express lanes. The deck is stacked against the very people who worked to make Austin the prime destination that it has become.

What Are the Implications for Taxpayers and AISD?

The financial impact of the big enrollment drop on AISD will be devastating. We need only to look to Portland to see what that trend looks like. Portland saw a massive school enrollment drop in the 1980’s, as they transitioned into a wealthy enclave. The big difference is that today Portland has a very efficient public transportation system that includes rail.

It is highly unlikely that Austin will ever be able to afford a citywide rail system. That’s because the City already has a daunting list of over $8 billion worth of plans. Rail is not on that list. Voters have already approved bond packages totaling $1.7 billion in City and AISD bonds in the last two years. And hundreds of millions in additional bond projects are in the pipeline. The City is on a scary path toward raising property taxes to the legal maximum of 8% every year. Where is all that money supposed to come from?  Do they think we all have sacks full of money just lying around? How much debt can the City handle? And most importantly, is this kind of cost spiral even sustainable. I think not!

As for AISD, they are most likely headed for an “affordability perfect storm.” The State’s Robin Hood school finance system, known as “recapture,” diverts hundreds of millions of dollars of our local tax money into other school districts across Texas. Consider this quote from AISD’s website:

“Austin ISD is the single largest payer of recapture in the state. Our payment alone comprises 13 percent of all state collections. During the next five years—between fiscal years 2016 and 2020—Austin ISD is projected to pay almost $2.6 billion in recapture payments to the state. By 2019, more than half of every tax dollar collected in Austin will go to the state.”

AISD’s projected student enrollment drop only exacerbates the problem. Fewer students generate less State revenue. AISD receives $7,390 annually for each student enrolled. It’s easy to see that declines of several hundred students per year translate into millions of dollars lost.

Whenever district officials recommend consolidating or closing under-enrolled schools, parents complain and slow down the inevitable transition. The delays lead to costly expenses to operate and maintain those schools. Meanwhile, as home property appraisals, school operating costs and bond payments escalate, taxpayers get slammed with a cost spiral that forces them to leave Austin. That generates further enrollment declines. The only way out of this vicious cycle would be school finance reform at the State Legislature. We need much more public focus on that issue, along with a coordinated effort by City, County and AISD officials to push for reform. Failure to achieve that goal could imperil Austin’s hopes for continued economic success.

Seniors Get Shafted On Social Security Cost of Living Increase!

By Bill Oakey – January 8, 2018

Austinites who receive a monthly Social Security check may have heard the news reports that they will finally be getting a cost of living adjustment, starting this month. The 2018 cost of living increase will be 2%. This was very welcome news to hear, since the annual adjustment was a big fat zero in 2016.

Then it was a paltry .3% in 2017. In this chart, the Social Security Administration lists the annual cost of living (COLA) increases announced at the end of each year. They take effect beginning in January of the following year. So, it would appear that for 2018 we will be getting a 2% raise, starting “on or about January 24th,” according to the notice they sent out by mail.

But Instead Of a 2% Raise, We Will Be Getting the Royal Shaft!

The Social Security notice that came in the mail includes a nasty little surprise. They are hiking the Medicare deduction! So, using mine as an example, the Social Security cost of living increase is $27.00. But the Medicare deduction got jacked up by $25.00. That leaves me with a whole, great big $2.00 monthly increase. The best advice that I can give to everyone else out there is this: Don’t spend it all in one place! In fact, I’ve been told that I may be one of the lucky ones. Three people close to me got no net increase at all – zero, zip, nada!

Last October, the Chicago Tribune warned that the 2018 Medicare increases “would hit large numbers of low-income individuals who struggle to make ends meet.” The article cites a new study by the Senior Citizens League. The study revealed that seniors have lost one-third of their buying power since 2000, as Social Security cost-of-living adjustments have flattened and health care and housing costs have soared. Check out this blistering op-ed in the L.A. Times. The screws are tightening in several areas, with perhaps little hope from Congress.

You Should Contact Your Central Texas Congress Person

Take a stand and ask that Congress act now to provide a meaningful Social Security increase. Here are the names and phone numbers to call:

Rep. Lloyd Doggett: 512-916-5921

Rep. Roger Williams: 512-473-8910

Rep. Lamar Smith: 512-912-7508

Rep. Michael McCall: 512-473-2357

What Is Your Cost of Living Increase If You Are a Retired Teacher or a Retired State Employee?

The answer to that question does not require any math skills at all. You don’t need a calculator, and you don’t even have to count on your fingers. Those of us who worked all our adult lives as Texas teachers or State employees have not received any annual cost of living increase since 2001!

Musical Accompaniment for This Blog Piece:

  1. “Theme From Shaft” – Isaac Hayes
  2. “Love Minus Zero / No Limit” – Joan Baez (written by Bob Dylan)
  3. “Zero Zero” – Bent Fabric
  4. “Down to Zero” – Joan Armatrading
  5. “Less Than Zero” – Elvis Costello