Tag Archives: cost of living

Update on Capital Metro Fare Increases

Leave a reply

September 6, 2013

Capital Metro’s new fare restructuring proposal may come as a rude shock to seniors and citizens with disabilities.  An online chart from the agency’s website shows the proposed changes for 2014 and 2015.  Next year, many routine bus trips that we are accustomed to will cost double the price or possibly even higher, over what we are paying now.  Then in 2015 they are proposing an additional across the board 25% fare increase!

Under the current system, seniors can buy a $1.00 day pass and use it on any local bus trip for 24 hours.  You can buy the pass right on the bus by showing your reduced fare card.  This is especially helpful if you take routine trips that require more than one bus to get to your destination.

Under the new plan, the reduced fare day passes will disappear, requiring you to pay $2.00 for a full price day pass.  You could pay fifty cents each time your board, but the round trip price would still be $2.00 if you take two buses each way.  A large percentage of passengers are low-income people.  We need to push hard for Capital Metro to keep the $1.00 reduced fare passes.

The new plan also eliminates the $4.50 reduced fare weekly passes, which means the price doubles to $9.00.  Capital Metro’s argument is that we will have the option to buy a reduced fare monthly pass for $16.50.  But many retired seniors may not ride the bus every day throughout the month.  Flexibility and convenience for the passengers should be the priority, not streamlining things for Capital Metro.

Things will get a bit more complicated next year when the new, bigger “MetroRapid” buses go into service.  They will have a higher fare structure than the current “local buses.”  And the plan calls for no reduced fare daily or weekly passes for them either.  Capital Metro has decided to keep local buses running on the North Lamar MetroRapid route, to provide more stops and allow a lower priced option.  Although the agency website states that the #3 Burnet bus will be eliminated, the Manager of Board Relations says that they have set a goal to provide local bus service along that route as well.

Seniors and mobility-impaired passengers will sometimes want to use the MetroRapid service to save time.  If they need to transfer between a local bus and a MetroRapid bus, how will the day passes work?  Will they be interchangeable, so that whichever type bus you board at the start of your trip, you would be able to transfer to the other, using the same pass?  If the only option is to buy a MetroRapid pass, with no discount available, then the price would be $3.00.  I believe that would be too steep of an increase for reduced fare eligible passengers.

The additional 25 percent fare increase proposed for 2015 is really hard to swallow.  Whatever happened to “Dump the Pump?”  Has Capital Metro forgotten their long-standing goal of encouraging people to ride the bus?  Check out the complete list of fare increases by going to capmetro.org/farechange/.  Public hearing information is also provided.

For all the trouble that went into the fare change study, the impact on the agency’s annual budget by eliminating most reduced fare passes is miniscule.  They would lose 290,000 passenger boardings and save just $243,700 out of a $283.7 million budget.  That’s only 9/100 of 1%, hardly enough to justify the punitive effect on some of Austin’s most vulnerable citizens.

The Capital Metro Board will vote on the full two-year plan on Monday, September 23rd. If you agree that imposing this burden on seniors and citizens with disabilities is unacceptable and does not meet Austin’s community values, please voice your concerns to the following:

Mike Martinez, Capital Metro Board Chairman, Austin City Council Member:

Email: Mike.Martinez@austintexas.gov  Phone: (512) 974-2264

Chris Riley, Capital Metro Board Member, Austin City Council Member:

Email: chris.riley@austintexas.gov  Phone: (512) 974-2260

Capital Metro Board: boardofdirectors@capmetro.org

Capital Metro Feedback: feedback@capmetro.org

Why Are Austin’s Property Taxes So High?

Leave a reply

September 4, 2013

We hear that question all the time.  There are a variety of reasons, including undervaluations of commercial property, as confirmed by the good research done by local citizen, Brian Rodgers.  But here is something that you might not know.  The City of Austin does not take any chances when it comes to raising taxes during their annual budget process.  If you thought they went into special meetings early on to find out how much they might need to raise taxes, well think again.

The City’s official training document, “Adopting a City Budget and Property Tax Training Guide,” lays bare my greatest fears about how the process actually works.  Their annual ritual starts out with raising taxes to the legal maximum, even before the budget process begins!

You can read all about it, straight from this excerpt from the training guide:

“The mechanism Austin uses to set the process in motion is an item on council’s agenda for a resolution to adopt a proposed maximum tax rate that the city will consider and set the date that council will consider adoption of the actual tax rate.”

“In the resolution adopting the proposed maximum property tax rate, Austin adopts the highest rate that keeps us below the trigger for citizens to take action to roll back the rate. Council then can consider various budget scenarios in the upcoming months that may lower the rate needed to generate the revenue for the upcoming fiscal year’s budget, but they know the cap and the cap is public. A sample of this resolution is at

http://www.cityofaustin.org/edims/document.cfm?id=141378.”

“When we adopt this resolution, we make clear in agenda notice, and in statements made by the Mayor at the agenda adopting this resolution, that the council may ultimately adopt a property tax rate that is lower than the maximum set out in the notice. We adopt the proposed property tax rate using a roll call vote where each person’s vote is recorded after the clerk reads their name. This information is then included in the Notice of Public Hearing discussed below. Including this information is required by Tax Code 26.06(b).”

You can read the entire training guide at: www.texascityattorneys.org/2013speakerpapers/RileyFletcher/BudgetAndTax_LeelaFireside.pdf

Raising taxes to the legal maximum provides an 8% increase over the “effective tax rate,” that would generate the same amount of revenue as the previous fiscal year.  So, year after year for as long as I can remember, the City has set a tax rate that was at or near the maximum, allowing spending to go up 8% each year.

Since 2004, the Austin City Budget has increased 73.7%, from $1.9 billion to $3.3 billion.  The Travis County Budget has nearly doubled over ten years.  The Austin American-Statesman editorial board has raised a really good question.  What has happened to all of the new tax revenue from block after block of gleaming new high rises that dot the downtown skyline?

It is very important to keep in mind that the tax rate can stay the same from one year to the next, or even go down, and we can still get steep property tax increases on our homes.  That’s because the tax appraisals on Austin homes are rising rapidly.  This year, Mayor Lee Leffingwell has shown some laudable restraint by telling the rest of the City Council that he will not vote for an increase in the tax rate.  But if the day ever comes when I hear any City leader say, “I will not vote for an increase above the zero effective tax rate,” then I’ll know that it’s a dream and I’ll roll over in bed and expect to hear the alarm go off at any moment.

Helping Travis County Reduce the Cost of the New Courthouse

1 Reply

STATESMAN IN-DEPTH: TRAVIS COUNTY COURTHOUSE

As Travis County works toward courthouse price, Florida project may be a guide

Posted: 12:00 a.m. Sunday, Sept. 1, 2013
EmailFacebookTwitterShareThis

BY FARZAD MASHHOOD – AMERICAN-STATESMAN STAFF

As Travis County commissioners embark on plans for a $340 million civil courthouse — hoping to avoid the embarrassing cost overruns, delays and lawsuits that plagued their last major downtown construction project — officials are looking toward the beaches of Florida for guidance.

Two miles from the Atlantic Ocean, officials in Broward County, Fla. are working on a new courthouse, too. The south Florida courthouse will be five stories taller and contain twice as many courtrooms as Travis County officials plan to build, but at a cost of $298 per square foot — half the price Travis County officials project.

Consumer advocate Bill Oakey has told Travis commissioners all about the Broward County courthouse, which is under construction and slated to open in the summer of 2015. Now, Travis County leaders are looking into the Florida project, and may survey other recently built courthouses around the country for cost-cutting ideas.

“I think, shame on us if we can’t find a way to build this thing the most most-effective way possible and give the judges what they feel they need,” said Commissioner Gerald Daugherty. He met with Oakey and is having an aide research the Broward project’s particulars to see how comparable Travis County’s project is and what can be scaled back here.

County Judge Sam Biscoe, chairman of the commissioners, said he will have a discussion during an upcoming meeting and will ask his colleagues to vote on whether to ask staffers to survey similar projects, including the Harris County courthouse that opened in 2005.

The county’s anxieties about cost overruns are real: The Criminal Justice Center opened in 2000, three years later than planned and at a cost of $45 million, about twice what was originally budgeted. The county sued the contractor overseeing the project, accusing it of design problems and delays, but the company said it did everything the county asked of it. Others had said the county rushed the project and demanded too many design changes.

As with that complex, commissioners plan to fund the civil courthouse through voter-approved bonds, perhaps on the November 2014 ballot. But approval is not going to be a slam dunk. Last year, Austin voters narrowly nixed $78.3 million in bonds for affordable housing; in May, two of the Austin school district’s bond packages, worth a combined $403 million, also failed.

If Travis County seeks $340 million in bonds for the civil courthouse, the cost to taxpayers would be about $61 to $69 a year. Commissioners have said shrinking the project’s tab could improve its chances for approval.

Back in Broward County, voters balked at the request for $450 million in bonds to finance most of the courthouse project, which would have cost the average landowner about $33 a year. About 61 percent of the voters rejected those bonds in 2006. That forced community leaders — lawyers, judges, mayors and commissioners — to regroup and reshape the courthouse plan into something they could afford with other pots of money.

“The type of building we had originally contemplated was not possible,” said Alphonso Jefferson, assistant to the Broward County administrator. “The task force looked at what the basic components of a new courthouse are … and that’s what you’re seeing coming out of the ground today.”

The new courthouse will have some room for expansion, but is built for Broward County’s court needs of today, Jefferson said. Originally planned as a 893,000-square-feet complex costing $510 million, the courthouse was pared down to a 714,000-square-foot tower costing $213 million. Broward officials are using cash, federal stimulus money and tax revenue to pay for it.

Shrinking the project helped, but Broward also found more affordable ways to build and finance it. How? That’s what Travis County officials hope to learn by scrutinizing the project.

Biscoe said his request for staffers to study other projects is “more than two hours of work. It’s a major investment of time.”

He also cautioned that Travis County’s $340 million estimate, originating from a consultant’s report in 2012, is likely an unreliably high figure. He said county staffers haven’t vetted the assumptions behind the estimate. The building hasn’t even been designed yet, which is when more accurate costs emerge. The actual cost, he said, will “be based on a whole lot of facts we don’t have today.”

Travis County officials plan to build a civil courthouse sized to meet its needs 2035 and last for at least 50 years. The existing Heman Sweatt Travis County Courthouse opened in 1931 and has had two major expansions, yet, the building has about half as much space as the county says it needs.

The new courthouse estimates are made on various assumptions by the consultants, such as building a “world-class building of significance/a grand public building,” according to an Ernst and Young report.

“That’s exactly what we can’t afford,” said Oakey, a retired accountant. “We definitely need a new courthouse. … But I quite frankly don’t think that if they put it on the ballot at somewhere between $300 million and $350 million, it will pass.”

The county is negotiating a contract with consultant URS Corp. to continue managing the remainder of the project, including public outreach ahead of a bond election and help with preliminary designs of the building. The firm would also help find a separate contractor to handle the final design and construction of the courthouse and help oversee the work at the downtown site, on the block south of Republic Square Park.

“The place we need to get fairly quickly is asking, ‘What are we talking about building? How big? What are the features that the judges say they need?’” Daugherty said.

The ultimate design of the building, and in turn its cost, will be determined by commissioners, working with URS.

Two courthouses

Travis County (projections)

$340 million

15 stories

510,000 square feet

500-car underground parking garage

31 courtrooms

Broward County (under construction)

$213 million

20 stories

714,000 square feet

500-car above-ground parking garage

77 courtrooms

A Decade of Flat Wages

Leave a reply

September 4, 2013

Can the City of Austin defy gravity?

When you look around Austin, it is easy to be lulled into believing that we are invincible.  Our housing market is so hot right now that sellers are getting multiple bids that are often higher than the asking price.  Every other week a new magazine article places Austin at the top of somebody’s “Best Place To…” list.

Over the next several years, a Grand Vision Design Plan (officially known as a “charrette”) will transform Congress Avenue into something rivaling the Champs Elysees in Paris.  Any woman who leaves her white gloves at home, or any guy who forgets where he parked his Lamborghini might still be able to head over to Hut’s Hamburgers, if it survives in its present form.

All of the Grand Visions for Austin assume that the huge bubble we now find ourselves in could never burst.  They assume that we can defy gravity, in a way that no other city in the history of the world has ever been able to do.  I guess time will tell and we will all find out, one way or the other.

In the meantime, there is an inescapable economic reality that faces the United States.  It is the reality of “A Decade of Flat Wages.”  The new report by the Economic Policy Institute is subtitled, “The Key Barrier to Shared Prosperity and a Rising Middle Class.”  Here is an excerpt from that report, followed by a link to the full text:

A DECADE OF LOST WAGES (Excerpt) By LAWRENCE MISHEL AND HEIDI SHIERHOLZ

The nation’s economic discourse has finally shifted from talk of “grand bargain” budget deals to a focus on addressing the economic challenges of the middle class and those aspiring to join the middle class. Growing the economy from the “middle out” has become the new frame for discussing economic policy. This is long overdue; in our view, an economy that does not provide shared prosperity is, by definition, a poorly performing one. Further, such an economy will not provide sustainable growth without relying on consumption fueled by asset bubbles and escalating household debt. The collapse of the housing bubble and the ensuing Great Recession have laid bare the consequences of this model of unbalanced growth.

The revived discussion of strengthening the middle class, however, has so far failed to drill down to the central problem: The wage and benefit growth of the vast majority, including white-collar and blue-collar workers and those with and without a college degree, has stagnated, as the fruits of overall growth have accrued disproportionately to the richest households.

The full report is available at: www.epi.org/files/2013/BP365.pdf

Time to Pause for Another Laugh

Leave a reply

The Definition of a Figure

By Bill Oakey

September 4, 2013

In order to become proficient in the field of accounting, one must master the art of figuring out what a figure is.  Figures are everywhere.  They just don’t seem to ever go away.  Especially the ones we don’t like, the ones that don’t balance, and the ones that linger around too long and haunt us.

Just what exactly is a figure anyway, and what do accountants use them for?

That of course depends on where it came from, who came up with it, and what you are trying to prove with it at the time.  The best way to understand figures is to sort them into types first.  Here are a few:

1. Actual Figure – A figure that actually got where it is.  It may or may not belong there, but if you rub your eyes and look again and it’s still there, it’s an actual figure.

2. Pure Figure – A single figure that is pulled from a group of figures that everybody likes.  Not to be confused with true figures.

3. True Figure – A figure that appears to be correct, but in an embarrassing sort of way.  Nobody else in the office likes it.  Usually needs to be adjusted.  Not to be confused with correct figures.

4. Correct Figure – Any figure that balances to any other figure.  It is possible for either pure figures or true figures not to balance.  In that case, do not use them.  Always use correct figures, especially if they look familiar.

5. Familiar Figure – A figure that looks right because you remember seeing it somewhere else before.  Especially useful when trying to arrive at realistic figures.

6. Realistic Figure – A figure that comes out the way it is expected to.  Should always be used on official reports.

7. Accurate Figure – A figure that bothers you because you can’t find anything wrong with it.  Be extremely careful when using one, especially if it balances the first time you try.  It may or may not be a firm figure.

8. Firm Figure – A figure that you have to go with.  Either it is too late to change it, or its effect on the person sitting next to you hasn’t been discovered yet.

9. Perfect Figure – One that makes the boss happy.  Never question it.

10. Final Figure – The kind that we only see once in a lifetime.  We can all count on it.  It’s the one that’s assessed by our undertaker.  Even if it’s out of whack, we can rest assured that it will go away and never bother us again.

Dead Serious Note:  If you were considering settling into your final resting place in a City of Austin cemetery, you might want to do it before the end of September.  The friendly folks at City Hall are planning hefty fee increases for all cemetery services, effective October 1st.  Your final figure could be 30% more, or even higher, if you don’t act quickly to avoid letting their unaffordable policies follow you to your grave.  (For the complete list of cemetery fee increases, see www.austintexas.gov/edims/document.cfm?id=191684)

Time to Pause for a Laugh

1 Reply

Consumer Weather Bulletin

By Bill Oakey

August 28, 2013

Tax and utility rate increases from the mid teens to the upper twenties this fall, with freezing conditions expected for salaries and wages throughout Central Texas.

Ninety-eight percent chance of heavy precipitation extending from East Austin across the City, as tears begin streaming down the cheeks of low-income taxpayers.

Radar indicates a rising tide of continued cost spirals every year from an intense high pressure area developing over the Sea of Red Ink that engulfs City and County budgets.

A large hot air mass is expected to move into Central Texas next year as political election candidates attempt to cover the huge issue of fiscal responsibility with a thin layer of cloudy promises.

Austin American-Statesman Affordability Editorials

Leave a reply

Austin American-Statesman

City, County Must Stop Its Binge On Tax Hikes

Posted: 2:40 p.m. Friday, Aug. 16, 2013

BY EDITORIAL BOARD

The Austin City Council is either unable or unwilling to stop itself from raising taxes to near or at maximum legal levels — despite larger revenues, windfalls, and growing tax bases. In doing so, city officials have shown themselves to be drunk on tax hikes, and it’s time to implement a 12-step program.

How else can their actions be explained? Year after year, without much — if any — consideration for the public’s ability to pay through-the-roof tax bills from the city, county, school districts, hospital district and Austin Community College, elected officials have continued to impose steep tax hikes. Other cities, such as Round Rock and Cedar Park, have held the line on taxes, even while giving employees a pay raise and expanding city services.

Certainly, well-financed local governments provide services to residents and take care of parks, libraries, schools, roads and people in need. But there are limits – points at which more harm is being done than good when taxes are raised beyond certain levels. As local contributor Bill Oakey notes in his commentary below, the current system is not sustainable for most city residents whose wages have not kept pace with ballooning housing costs, electric rates and tax bills. It’s disheartening that the public’s ability to pay has been an afterthought in budget decisions.

That concern continues to be trumped by other priorities, such as providing substantial yearly pay raises and benefits for city and county employees and, in some cases, pay raises elected officials have awarded themselves; tax rebates for private companies that relocate to Austin or Travis County; and tax breaks for homeowners of historical homes in upscale neighborhoods. The steep and continued increase of tax bills is curious given all the additional money generated by new construction and businesses, a rebounding economy and larger revenue from higher property values. Elected officials tout growth as a counterbalance against such steep tax increases. Yet that benefit is not showing up in our tax bills.

That situation caused Austin City Council Member Laura Morrison to pose this question, “What do we have systemically in our business model that, even with growth, we can’t keep up with expenses … and (because of higher rates) are taking more and more of a bite out of people’s incomes?”

That question deserves an immediate answer. And neither the council nor the commissioners court should approve budgets until that question is answered and budgets are adjusted to reflect the financial realities of people who are paying the bills. Taxpayers should be getting a break, given all the extra money the city and county are taking in.

But the binge continues.

American-Statesman writer Sarah Coppola reported in recent editions that Austin’s property tax rate would increase from 50.29 cents per $100 of property value to 51.14 cents. That rate is just below the highest rate the city could choose under state law — 51.34 cents — without triggering a possible election to limit the increase.

Under the proposal, the typical Austin household would pay $173 more in property taxes, utility bills and other fees next year if the budget is approved in September. Austin would add 365 jobs to its nearly 12,400-person payroll, including 23 jobs in the planning department to review, inspect and permit new construction. Local attorney Bill Aleshire has a good recommendation to address planning department expenditures, including new jobs: Make the department a self-supporting enterprise from user fees. Council Member Mike Martinez, citing 900 positions in the city that are vacant, doesn’t see the need to add hundreds more. We agree. Council Member Bill Spelman is challenging the idea that Austin needs an additional 47 police officers in jobs that can be filled by non-civil service employees, who earn considerably less than police officers.

To give taxpayers a break, the council should take the long overdue step of granting home owners tax relief through a homestead exemption, as the county already offers.

For its part, the county also is on a bender regarding its expenditures. Earlier this month, two county commissioners, Margaret Gomez and Ron Davis, voted themselves and about 40 other elected officials a 3 percent pay raise. They were joined in that arrogance by retiring County Judge Sam Biscoe. The proposed budget for the next fiscal year also includes 3 percent across the board pay raises for all employees, though employees received hefty pay raises this year and the year before.

Though county tax bills will rise nearly 3 percent for the average homeowner, the tax rate will decline by a wee bit, about 1.1 percent. Taxpayers could and should get a bigger break, given the windfall to the county budget from rising property values. Officials seem unaware that most residents don’t share their affluence or ability to pay ever-increasing tax bills.

We’re not advocating that the city, county and other taxing entities practice strict austerity. Perhaps smaller tax increases are warranted in some cases, but they should be justified. We are arguing for tax sobriety.

OTHERS SAY: AUSTIN AFFORDABILITY

Oakey: Dollar signs can be danger signs

Posted: 12:00 a.m. Friday, Aug. 16, 2013

BY BILL OAKEY – LOCAL CONTRIBUTOR

Let’s get straight to the bottom line. The Austin city budget has increased a whopping 73.7 percent in the past 10 years, from $1.9 billion to $3.3 billion. Travis County’s budget increased 93.6 percent between 2003 and 2013, which means that it nearly doubled. Right now, the Austin area is experiencing one of the biggest economic booms that the entire country has ever seen. The glow looks great in the national spotlight. But look out for the danger signs.

We surged from becoming America’s 17th largest city in 2000 to 11th place this year. But not without a hefty price. The layer upon layer of related cost increases and future spending proposals can be summed up with one word — unsustainable.

Local property taxes have increased 38 percent in the past decade, and rents have skyrocketed 49 percent. And yet, the median income in Austin, adjusted for inflation, has stayed virtually flat since 2000. The tax rates for the city and county alone have gone up 25 percent in just four years. Homeowners whose tax appraisals have increased during that period have seen even higher increases. And that does not include Austin Community College, Central Health, area schools, and water and electric rate increases.

When many people think of 21st-century Austin, they envision young high-tech whiz kids and innovative entrepreneurs who bring new companies with good-paying jobs to town. We hear about Formula One and the X Games, and an impressive schedule of music and cultural festivals that attract more tourists every year. But beneath the veil of prosperity lies an inescapable fact. The Austin population is a diverse demographic mix.

According to U.S. Census figures, one in five Austinites lives in poverty. Interestingly, poverty has spread to our suburbs at a growth rate that ranks number two nationwide. The Brookings Institution released a report that shows we have the nation’s fastest-growing population of “pre-seniors,” ages 55 to 64, and the second-fastest-growing senior population. And yet, our city and county older-than-65 homestead exemptions have never been indexed for inflation or rising home values, and are woefully inadequate.

Estimates of the number of people moving here range from 100 to 158 per day. Those who landed a good job or who sold their home in a West Coast market can live quite comfortably in Austin. But their arrival in older neighborhoods has driven up property values and priced a lot of longtime Austinites out of their homes. Many of the tens of thousands of residents who were already here before the boom started now face economic uncertainty.

Some of these problems are not unique to Austin. San Francisco, Portland, Ore., and other cities have gone through similar growing pains. But the accelerated pace of the Austin transition gives reason for local government officials to wake up to the harsh realities of affordability. If anyone thinks the past 10 years of tax increases and high housing costs were hard to swallow, just ask yourself this. How long could you sustain the same pace, if not even higher costs going forward?

Over the next 15 months, voters will need to decide on some very expensive bond propositions. ACC is considering a half-billion dollar bond election for building renovation and expansion. Next year, we may see a $275 million election for the first phase of the urban rail project. Add to that a proposed new Travis County Civil Courthouse for $300 million to $345 million. More water and electric rate increases are forecast. Worst of all, the Austin City Council continues to raise property taxes to the legal maximum year after year.

So, what can be done to bring the area’s perceived needs and the cost to fund them in line with the public’s ability to pay? I have read dozens of consultant reports and internal planning documents. But nowhere have I ever encountered the phrase “the public’s ability to pay.” Policymakers should heed the warning signals. For many Austinites, there are only two options: cut the family budget, or load up the car and watch Austin fade away in the rear view mirror.

If local officials really want to tackle this problem, they must first recognize how serious it is. Then they need to schedule some joint planning sessions and get down to the business of doing whatever it takes to make Austin more affordable.

Oakey is a retired accountant and a consumer advocate

Why Lack of Affordability Is Killing Austin

3 Replies

By Bill Oakey

August 25, 2013

Austin is no longer a stepchild to Dallas or Houston.  And its closer neighbor, San Antonio, barely registers on the national radar scene compared to Austin.  The Capital City now boasts F1, the X Games, South By Southwest, and a booming economy that appears unstoppable.  But wait, can any City experience too much of a good thing?  Could Austin somehow become a victim of its own success?  Not only is such a scenario possible, but many observers find it to be frighteningly probable.  By reviewing numerous published articles, editorials and data, both local and national, one can find compelling evidence that Austin is becoming so unaffordable so rapidly that we may be headed for another boom and bust cycle.

While that may sound like a strong statement to make, consider this.  Austin has risen from the nation’s 17th largest city in 2000, to 11th this year, according to U.S. Census figures.  The explosive growth has brought crushing demands on infrastructure and public services, along with a seller’s market for housing.  Property taxes have risen 38% since 2003.  Rents have risen 49%.  The median sales price for a home has increased from $159,000 to $225,000 in the same period.  These figures do not take into account that many Central Austin neighborhoods have seen home prices well above $300,000 or higher since the late 90’s.  And yet, median income in Austin, adjusted for inflation, has stayed virtually flat since 2000.

Here’s the bottom line.  The Travis County Budget increased a whopping 81.1% in the 10 years from 2003 to 2013, going from $449.5 million to $814.2 million.  The Austin City Budget has skyrocketed 73.7% from 2004 to the proposed 2014 budget, going from $1.9 billion to $3.3 billion.  How many friends do you have whose paychecks have gone up by those percentages?

Both Forbes and Bloomberg have recently named Austin America’s current top boomtown.  But boom and bust cycles are all too familiar to anyone who lived in Austin during the 1980’s.  We remember the savings and loan collapse and subsequent real estate crash.  Residents who moved into suburban municipal utility districts, or MUD’s as they were called, found themselves in a financial quagmire.  In the heyday of speculative land-flipping, some lots were bought and sold more than once in the same day.  But once the market crashed, many homeowners owed more on their home loans than they could get from trying to sell.  So, quite a few simply went to the loan office, laid their keys on the table, and walked away.

Fast forward to the Great Recession of 2008.  Austin fared better than most of the rest of the country.  We went through a large number of foreclosures, but it was more of a stumble than a great fall.  The local economy held up fairly well.  This year, the economic recovery is well underway.  Home values are on the rise for the first time in several years.  No place on earth is riding the real estate boom faster than Austin, Texas.  Estimates of the number of new people moving here every single day vary.  But it ranges from 100 to 158 per day.

So, what’s not to like about being the fastest growing city in the USA?   Wouldn’t any city salivate at the chance to own that crown?   Well, yes, it is safe to say that business is booming in Austin.  Austin venture capital firms have spawned the growth of innovative startup companies in a broad range of fields.  If one phrase could be used to describe the new urbanites in Austin, it would be “young and hip.”  While not all of the young professionals work in the high tech industry, many are receiving other high paying jobs.

But for Austin and Travis County to be able to afford the expensive building and expansion plans already on the books, we would need to out-recruit every other city on the planet.  That’s because existing residents are rapidly being squeezed out of the city.  So, consider this question.  Even if Austin wanted to displace all of the older folks and low to moderate income residents, could they become the only city in world history to make that happen?  Austin is flying high now, but can it really defy gravity?  And what kind of place would it be with little demographic or economic diversity?

Generous tax incentives to Apple, Samsung, and even a high-end shopping complex, The Domain, have lured a steady stream of businesses to town.  The shopping center incentives drew loud protests and an unsuccessful ballot initiative to have them repealed.  The City then followed up with a hefty round of fee waivers for a downtown convention center hotel.  Again, the protestors clamored for an explanation as to why a hotel chain would need an incentive to build in the hottest city in the country.  At the same time, the Texas Legislature delivered severe cuts to local school districts, then added to the districts’ pain by awarding a basket of school tax exemptions to incoming businesses.  Some admire the incentives; others call them “corporate welfare.”

In the shadows of the newfound glitz and glamour that charms the downtown corridors of Austin are the remaining longtime residents.  Retired school teachers and state retirees have not received a cost of living pay increase since 2001.  Those people, along with tens of thousands of other low to moderate-income residents face skyrocketing property taxes, escalating tax assessments on their modest homes, and rapidly rising utility bills.  Of course, the story of local displacement in a growing, prosperous city is nothing new.  Gentrification has happened in San Francisco, Portland and lots of other places.

And yet there is something stunning about the rapid pace at which the Austin transition is occurring.  The Great Recession may have slowed things down temporarily, but now the boom is exploding.  The effort to pay for the growth pushed both City of Austin and Travis County property taxes up a full 25% between 2008 and 2012.  If that was the pace during the downturn, how much more will taxes accelerate during the recovery?  If the public’s ability to pay is not plugged into the budget planning process, how long can the status quo be sustained?

The voters of Austin, historically proud of their clean and attractive city’s stellar reputation, have willingly ponied up to support bond propositions for the schools, as well as bonds to pay for City and County capital projects.  But a couple of years ago, a new watchword found its way into the local political lexicon.  Affordability.  A person cannot attend a civic function or a political campaign forum without hearing “affordability” mentioned countless times.  The annual budget hearings for the City and County, which once drew large interest groups asking for more money for this or that pet project have dwindled.  The lineup of speakers these days delivers a new message in multiple-part harmony.  “Don’t raise our taxes any higher.  We just can’t afford it!”

What many predicted would happen sooner or later did happen in the spring of this year.  Two out of four bond propositions for the Austin Independent School District failed at the ballot box.  It was the first time that had happened since 1989.  Between now and the end of 2015, local voters will be asked to approve half a billion dollars for Austin Community College building expansion and renovation and $200 – $300 million for a downtown skyscraper to house Travis County’s civil and family courts.  In November 2014 bonds will be on the ballot totaling several hundred million for the first phase of the City of Austin’s proposed urban rail project.  The City Council is also considering adding about $200 million for roads, and combining that with the rail bonds into a single bond proposition.

The Austin City Council routinely sets their annual budget target using the maximum property tax increase allowed by law.  Then they publicize an additional “unmet needs” amount to the media.  This is labeled as a “budget shortfall.”  Everyone clamors for them to whittle down the shortfall.  But when they do, they have only reduced it back to where they started – at or near the highest property tax increase legally allowed.  Just close your eyes and try to imagine if our community could sustain another 10 years of budget increases of the same magnitude.  Could you sustain it with your paycheck?  Or would you just be looking at Austin in your rear view mirror?

Here is an outline of topics and relevant data from newspaper articles, radio and TV websites, and primary sources:

1. “Policy Group Finds Austin Most Expensive City in Texas.”  Austin Business Journal, July 10, 2013

2. “Austin Named Most Expensive City for Families.”  KVUE-TV News, July 1, 2013

3. “Through the Roof – Cost of Living in Austin Is ‘Out of Reach’ for Most Renters.”  Austin Chronicle, March 23, 2012.  This article includes an interesting discussion of the displacement of low-income families from a historically affordable neighborhood along East Riverside Drive.  A single City zoning change led to a snowball effect that changed the lives of a large number of residents.  A valuable segment of Austin’s dwindling supply of affordable housing was wiped out.  One can only hope that voters will approve a badly needed program for affordable housing in the fall.

4. “Where Have Austin’s Urban Children Gone?” Austin American-Statesman, April 24, 2011.  The “Big Picture” of Austin’s growth reveals a disturbing pattern of outward migration by families with children.  Many young families who transfer here to start a new job try to find a home in a Central City neighborhood.  But those who locate to a close-in neighborhood find that the convenience of avoiding a long commute comes with a hefty price tag.  So much so, that it doesn’t take long for them to join the rapidly increasing migration to the outer reaches of the City or County.  This phenomenon depresses the population of children in the inner city schools.  The next refrain in that particular song is announced school closings, followed by hollering neighborhood protests.

5. “Austin: Second Fasting Growing City for Suburban Poverty (In the Nation),” KUT News, May 20, 2013.  “Poverty Takes Root in Austin’s Suburbs,” Austin American-Statesman, May 19, 2013. “More Than One in Five Austinites Live in Poverty,” Austin American-Statesman, Sept. 22, 2011.  “Crime and Homeless Drop in Austin, but Poverty Is on the Rise,” Austin American-Statesman, May 23, 2013

6. “FY 2013-2014 City of Austin Community Needs Assessment,” A comprehensive demographic study of population trends including ethnic breakdowns, age breakdowns, unemployment data, income levels, etc.

7. “Pre-Seniors Are Booming and Austin Leads the Pack,” Austin Business Journal, July 31, 2013.  Discussion of a Brookings Institution Report that states Austin has the fastest growing percentage of people ages 55 to 64 in the United States, and the second fastest growing senior population.  “Growing Senior Population May Bring Problems to Austin Area,” Community Impact Newspaper, October 25, 2012. These reports led to Austin Mayor Lee Leffingwell’s Task Force on Aging.

8. “5 Must-Do’s As Age Wave Bears Down on USA.” USA Today & The National Council on Aging, August 2, 2013.

9. “Austin Housing Prices A Concern for Employers,” Austin American-Statesman, August 1, 2013.

10. “Austin Property Taxes Jump 38% Over Past Decade,” Editorial Board, Austin American-Statesman, June 23, 2012

11. “Central Texans Deserve Truth About Their Taxes,” Editorial Board, Austin American-Statesman, August 25, 2012

12. “Austin City Council’s Budget Does Not Address Affordability,” Editorial Board, Austin American-Statesman, September 15, 2012

13. “Pull Back Now on Rapid Tax Increases,” Editorial Board, Austin American-Statesman, July 7, 2012

14. “Texas Business Incentives Highest in Nation,” New York Times, December 2, 2012.  Discussion of tradeoffs between “business Incentives” vs. “corporate welfare.”

15. “Austin Could Seek $275 Million In Bonds for Initial Urban Rail Line,” Austin American-Statesman, May 22, 2012.

16. “Start Now to Make Austin Affordable Again,” Brigid Shea, Austin American-Statesman, October 24, 2012.

17. “Taxpayers May Be Asked to Share $250 Million Cost of Replacing Austin’s Public Hospital,” Austin American-Statesman, Jan. 27, 2012.

18. “Local Entities Join Forces to Sync Myriad Bond, Tax Proposals – Average Homeowner Would See $1,000 Increase In Taxes in Next 5 Years Under Some Scenarios,” Austin American-Statesman, July 11, 2012.

19. “Austin City Council Approves Brand New Vision for Downtown ($350 Million), Austin American-Statesman, Dec. 8, 2011.

20. “Travis County’s Downtown Plan Calls for More Than $1 Billion In Spending,” Austin American-Statesman, December 23, 2012.

21. “U.T. Gets New Medical School Thanks to Tax Increase,” Houston Chronicle, Nov. 7, 2012. “Central Health Defends Tax Hike of 5 Cents, Or 63%,” Austin American-Statesman, August 18, 2012

22. ”As Debt Rises, Travis County Considers New Downtown Office Building,” Austin American-Statesman, April 29, 2013.  The County’s non-voter-approved bond debt has tripled since 2005, from $68.8 million to $226 million.

23. “Will New Travis County Civil Courthouse Rise 66 Stories?” Austin American-Statesman, October 11, 2011. “Travis County Commissioners Approve Building Method for New Courthouse ($312 Million),” July 23, 2013

24. ”Austin Community College Weighs $499 Million Bond Proposition,” Community Impact Newspaper, July 25, 2013

25. ”Big Increase In Next Year’s Proposed (City) Budget,” MyFox Austin, August 1, 2013.  New taxes and fees totaling $14.39 per month for the average Austin family.  This does not include Travis County, Central Health, ACC, or the school district.

26. ”Austin To Tackle Affordability Question in Building Rules,” Austin American-Statesman, August 10, 2013.

27. ”How to Keep Up With 158 People Moving to Austin Per Day,” Realty Austin, May 17, 2013.

28. “Austin Ranked Best for Everything and Everyone,” Austin Business Journal, June 20, 2012

29. ”America’s Fastest Growing Cities,” (Austin is #1, for Third Year In a Row), Forbes Magazine, Jan. 23, 2013.

30. “How Austin Energy’s Rate Increase Will Affect You,“ Austin American-Statesman,” June 16, 2012.  “State Report: Austin Energy Rate Increase Too High,” Austin American-Statesman, February 14, 2013.  “Austin Energy Wins Round One,” Austin Chronicle, March 8, 2013.

31. “Critics Tie Proposed Plant to Rise In Austin Water Rates,” Austin American-Statesman, August 26, 2010.  Rates to rise 35% by 2015.  “Higher Water Fees Coming for Austin Customers,” Austin American-Statesman, July 15, 2012.  Water conservation leads to lower revenues, so rates must go up.

32. ”Cost of Infrastructure to Serve New Residential Development,” Fodor & Associates, Jan. 2011.  Austin only collects two of the four types of impact fees allowed under Texas law.  Their water and wastewater impact fees only recover 38% of the full cost.  The rest is paid by all City ratepayers.  Austin’s growth is not paying for itself.  http://www.fodorandassociates.com/Reports/Cost_of_Res_Infrastructure_in_Austin_Exec_Sum.pdf

33. “The Unfair Burden: How Austin Homeowners Subsidize Speculative Land Holdings and Commercial Property Owners,” By Brian Rodgers, July 1, 2009.  http://costofgrowth.com/property-taxes/the-unfair-burden/  “Systemic Undervaluations,” News stories and reports of undervaluations of commercial properties at the expense of residential taxpayers.  Compiled by Brian Rodgers.  http://costofgrowth.com/category/property-tax/systemic-undervaluations/