Tag Archives: austin cost of living

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
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We Need One More Vote From The Austin City Council

By Bill Oakey – April 27, 2014

My longtime friend, Shudde Fath, who has served on the City’s Electric Utility Commission since 1977 and is approaching her centennial birthday needs our help.  A victory on this issue may take a group effort.  But she deserves all the credit in the world for discovering the problem.

In a nutshell, Shudde did some research last year and discovered that Austin Energy no longer charges the full amount that it costs to hook up a new home or business to the electric system.  What that means is that the rest of the ratepayers, people like you and me, are having to subsidize the new hookups that come on line.  Until Shudde made the discovery, there was no hookup fee at all, and there hadn’t been since sometime back in the late 1980’s.  As of today, a very small fee has been added for the new hookups, but it is not nearly enough to recover the total cost.

On this Thursday’s City Council agenda (May 1st), Item 41 is a resolution directing City staff to implement full cost recovery of the new hookups, as part of the Fiscal Year 2015 City Budget that takes effect this coming October 1st.   Here is a link to the resolution for Item 41.

The City Council member that we have to thank for this item is Kathie Tovo, who received the AustinAffordability.com Above And Beyond Award last week.  Her co-sponsors are Laura Morrison and Mike Martinez.  So, we just need one more vote.  You can send an email to Mayor Lee Leffingwell, Mayor Pro Tem Sheryl Cole, and Council Members Chris Riley and Bill Spelman by clicking this single link.  Then Tweet and Facebook this blog posting to your friends.

If you are an Austin American-Statesman subscriber, you can read an endearing article about Shudde Fath, entitled “97-Year-Old Woman Still Monitoring Austin’s Electric Rates.”

And The Winner Is…Kathie Tovo

By Bill Oakey – April 24, 2014

Last night during an affordability presentation to the Austin Neighborhoods Council, I had the privilege of recognizing someone with a well deserved award.  Kathie Tovo and her Policy Aide, Shannon Halley, have been more responsive and attentive to the details of affordability issues than anyone else on the Austin City Council.  Not only that, Kathie’s actions have spoken louder than words.  She worked with City Staff to find an alternative to spending the budget surplus for funding a worthy project for a senior citizen recreation center.  And her office stayed in touch throughout the week that increasing the Over-65 and Disabled Homestead exemption came up for a vote.  She steered it past an uncertain fate, all the way to a welcome victory.

Giving an award is one of the fun parts of an otherwise treacherous process.  Along with it comes the AustinAffordability.com endorsement for Kathie for District 9 in the upcoming City Council election.  You can see the award below.  Click to enlarge it.

Tovo Award

 

Goodnight…And Pleasant Dreams, Plus Other Updates

By Bill Oakey – April 21, 2014

Last Friday night I spent a cool and very pleasant evening at the Lenoir Wine Garden on South First Street.  It was an Authors Party, sponsored by the Austin Public Library Friends Foundation.  In addition to the opportunity to mingle with literary standouts such as Elizabeth McCracken,  I happened upon a chance meeting with noted psychologist and Austin resident, Dr. Gemma Marangoni Ainslie.  Little did I know at the time that my curiosity would lead to…

Goodnight…And Pleasant Dreams!

A Google search for a few of the intriguing folks on hand for the party turned up a disturbing New York Times article.  You might be better off reading this in the morning, rather than right before bed.

Entitled, “The House of Your Dreams,” the article was published in 2009 during the height of the real estate bust and economic collapse.  “Foreclosure, eviction and an uncertain real estate market are providing material for disturbing dreams and nightmares about home, which has an especially powerful place in the psyche,” the story begins.

As I continued reading, I began to discover an eerie parallel between the housing collapse of the Great Recession and the feelings of hopelessness felt by many Austinites as they struggle to hold onto their homes today.  Just yesterday, a realtor in my neighborhood told me that quite a few of her clients are sellers who can no longer afford to live here.

Back to the article, here is another interesting quote.  “At a time of collective angst and fear of economic insecurity, psychologists say more patients are recounting stressful dreams that revolve around the theme of home.”

Some psychological studies suggest that people’s dreams reflect actual real life situations that they can act upon as a result of what they learn from their dreams.  Austin’s own Dr. Gemma Marangoni Ainslie, whom I met at Friday’s party, cautions against taking dreams too literally.  “Things are not necessarily what they seem to be,” she stated in the NY Times article.  In her view, dreams are simply “clues about personal struggles and ongoing conflicts.”

As you turn down the sheets tonight, try not to think about Austin affordability.  Goodnight…and pleasant dreams.

Presentation to the Austin Neighborhoods Council on Wednesday

On Wednesday April 23rd, I will give a presentation at the Austin Neighborhoods Council meeting at approximately 7:53 PM at the Austin Energy Building, 721 Barton Springs Road.  The title is “Affordability –  Goals And Reforms to Maintain Austin’s Economic Diversity.”

“Above and Beyond” – The First Award From This Blog

Stay tuned for an upcoming announcement.  The first ever AustinAffordability.com award will be presented to a public official who has demonstrated outstanding leadership in the face of the inertia of Business As Usual.  She has definitely gone above and beyond her peers.  It will be a happy occasion, but the time and place have yet to be determined.  (As you probably already guessed, the tittle for this award was inspired by the classic Harlan Howard song, first reaching number three by Buck Owens in 1960, and then number one by Rodney Crowell in 1989).

Paul Robbins – Measures Needed To Control Austin Water Rates

Austin’s critical water situation is an important element of affordability.  Veteran energy and water activist and author of the Austin Environmental Directory, Paul Robbins, weighed in recently with this guest editorial in the Austin American-Statesman:

Robbins: Austin needs to take measures to control water rates

Posted: 12:00 a.m. Saturday, April 12, 2014

BY PAUL ROBBINS – SPECIAL TO THE AMERICAN-STATESMAN

Austin’s cost of living is soaring, and one reason is its water costs. Water rates are falling into a dangerous pattern. It’s called a “death spiral.” Costs go up, inducing market pressure to drive consumption down, eliminating revenue needed to pay fixed costs. So rates go up again, causing consumers to cut back further, and the spiral gets steeper.

At the same time, the Central Texas region is afflicted with record drought, so consumption is heavily discouraged. Water rates will go higher to make up for even more lost revenue.

Austin’s water utility boasts that its conservation efforts have lowered consumption 17 percent per person between 2006 and 2013. This seems impressive until you consider water rates went up 70 percent in the same time period. In fact, between 2000 and 2014, water rates went up 123 percent and wastewater rates went up 130 percent. Inflation only rose 36 percent.

And brace yourselves. It has been announced that by 2019, water rates will need to be increased another 31 percent and wastewater rates another 15 percent. This is despite cutbacks planned for next year’s budget and recent hook-up fee increases for new buildings of almost 200 percent.

The planned increases may not stop here. Due to the drought, the utility is shopping for new water supplies. To give you an idea of the relative cost, groundwater sold by one potential supplier to an Austin suburb is 30 times the price Austinites pay for Colorado River water.

Why are costs so high?

  • The biggest reason is capital investment and debt, much of it coming from growth. About 52 percent of your water/wastewater bill is related to capital improvements. An example of this is the half-billion-dollar Water Treatment Plant No. 4, which began construction in 2010. Judging from the utility’s recent forecast, Austin will not need its capacity for 17 years. Because it is a wasted asset, it will literally cost more to turn on the plant than to leave off.
  • There were poor decisions regarding asset management. The “profit” from the land sale of the former Green Water Treatment Plant site was put back into enhancements for the site’s redevelopment instead of lowering water costs. Other property, such as the retired Govalle plant on Lady Bird Lake, sits almost unused.
  • The water utility is one of the largest energy users in Austin, consuming enough electricity to power 17,000 homes. Yet it has no energy conservation plan and is buying wind power at 39 percent more than it cost the electric utility to purchase.
  • The utility’s profit, the transfer to the General Fund, has more than doubled since 2000, while water consumption is roughly the same.

Until the debt works its way out of water rates over time, Austin may not be able to do much to lower them. But through fiscal discipline and real conservation efforts, it can mitigate future increases.

There are a host of small cost-saving measures that can add up. These include: reducing General Fund transfers; postponing the operation of the new treatment plant until it is needed; buying and conserving electricity at an affordable cost; selling unneeded assets and using the profits to buy down debt; using leak-resistant polyethylene pipe; using “smart” utility meters to reduce labor costs and water loss.

There are several strategies that need to be implemented instead of purchasing new supplies. One of the most basic is to fully implement the water conservation plan approved by the City Council in 2007. This would be greatly enhanced if the conservation program was moved out of the debt-strapped utility, which has a conflict of interest saving water.

In addition, Austin has a reclaimed water system that is barely used, as well as access to Barton Springs flows into the Colorado River that might be routed to a treatment plant.

Austin would be foolish to ignore the affordability of its water any longer. Wall Street has a word for cities that have reached the height of fiscal hubris: Detroit.

Robbins is an environmental activist, consumer advocate, and author of “Hard to Swallow,” a report on Austin’s high water costs.

A Little Bit of History On Truth In Taxation

By Bill Oakey – April 17, 2014

Is it possible to make a duck walk without looking like a duck and quack without sounding like a duck?  In politics, yes, it is definitely possible.  Especially when dealing with that dreaded word that all politicians despise, TAX.  With property taxes, they must find a way to massage the thing, so that it looks like it hasn’t gone up since the year before.  So, how do they play that game downtown at Austin City Hall?

It’s really pretty simple.  They just don’t talk out loud about the percentage of a tax increase at all.  What they do talk about is the tax rate.  During boom times like we are in right now, property values are galloping upward.  So, using simple math, you know that the tax rate can stay the same, while your property tax bill will be higher if the tax appraisal on your home has gone up.

As recently as Thursday afternoon April 17th, I was told by one City Council member during Citizens Communications that the City complies with State law on property tax disclosure.  He is technically correct in that their public hearing notices published in local newspapers comply with State law.  But during annual budget deliberations, the City actually starts the process with a revenue assumption that raises taxes to the legal maximum of 8%.  The final adopted budget may come in below that amount by a couple of percentage points.  But what you will hear in the news media and from the City Council dais is how little they have adjusted the property tax rate. Little or nothing is spoken verbally about the true percentage of the tax increase.

Let me demystify it for you.   There is something officially called the “effective tax rate” that would result in a zero tax increase, when applied to the total value of all the property on the City’s tax rolls.  State law allows cities to raise taxes up to 8% above the effective rate.  That maximum amount is called the “rollback rate.”  Anything above that level could trigger a citizen initiative to roll the rate back.  (See the City’s official guide called, “Adopting a City Budget and Property Tax Rate Training).”

What do they have in store for this year’s budget cycle?  Well, here is one key sentence in a memo to the City Council from Deputy Chief Financial Officer, Ed Van Eenoo, dated February 28, 2014:  “City management has communicated its intent to present a proposed fiscal year 2014-15 Budget that maintains the property tax rate at 50.27 cents per $100 of assessed value.”  (See Conclusion, second sentence).  In other words, staff plans to “hold the line” on the tax rate, while collecting all the money that comes in from raising taxes on homes and businesses that receive big tax appraisal increases.  In order to not raise taxes when property values increase, they would have to lower the tax rate.

Last fall when the City Budget was adopted, KUT reported this headline story, “2014 Austin City Budget Holds Line on Tax Rate.”  The implication was that taxes were not going up.  But in fact, because of large appraisal increases, we did have a tax increase.  But the percentage increase above the zero “effective rate” was not readily disclosed beyond the required public hearing notices.  Better disclosure in the budget document with my proposed “Taxpayer Impact Statement” may not happen until we elect a new City Council in November.  

Now for a final bit of history.  I am the culprit who dragged out my old Sears typewriter in 1987 and went to my State Representative and State Senator and proposed the Truth in Taxation law that I was reminded of today by one of the City Council members.  Below is the cover page for House Bill 328, which established the State law.  It was signed by Governor Bill Clements on June 17, 1987.  Click the image below to enlarge it.

H.B. 328_HR

Let’s Get to Know Steve Adler

By Bill Oakey – April 16, 2014

As I waited for the appointment at Cafe Josie’s on Monday, I had no preconceived notions about Steve Adler.  Most of us have heard by now that he is running for Mayor.  The other primary “heavyweight” in the race is current City Council member, Mike Martinez.  I had met Steve briefly on two other occasions, and was quite curious to meet him and learn about him.

Prior to the meeting, I had emailed him 10 candidate questions on affordability.  That list has gone out to several announced candidates in various district races.  When Steve arrived at the table, he opened a portfolio with my question list ready for discussion.  But before getting into that, he pulled out a spreadsheet that he had obtained by doing some research at City Hall.  He had picked up my cue on an unexplained $6 million fee waiver for U.T. that was mentioned in this blog.  Steve discovered through Council Member Bill Spelman’s office that the City has since renegotiated that fee waiver down to $3.57 million.  This is welcome news on a cost savings for the taxpayers.

Like me, Steve believes that the City needs a fee wavier policy that is fair and consistent.  There are plenty of challenges and unanswered questions on this affordability topic.  But progress is being made.

Steve and I had a very interesting and cordial meeting.  His background as an attorney in civil rights cases and cases defending workers sounds impressive.  On current City issues, he agrees with me that citizens should not have to wait six hours to speak to their elected City leaders at Council public hearings.  And his interest in the various affordability issues seems encouraging.  A decision on an endorsement from this blog in the mayor’s race will come after careful consideration of the leading candidates.

Mr. Adler does not have a well established name in all of the circles of local civic activism.  But he has lived in Austin since 1978.  It would be my recommendation that folks should try to attend forums and organizational meetings where Steve will be speaking.  I plan to ask him if he would be interested in setting up one or more town hall meetings, so that plenty of people can get to know him better.