Economists see continued growth for Austin economy

But important tech sector has yet to bounce back

Some of the state's leading economists predicted another year of continued economic recovery for Austin on Wednesday. Economist John Hockenyos of Texas Perspectives, Ray Perryman with the Perryman Group, and Billy Hamilton, the state's Deputy Comptroller of Public Account s shared their projections with dozens of small business owners attending the Economic Forecast for Small Business organized by the Greater Austin Chamber of Commerce.

"As best we can tell, the local economy hit bottom in the summer of 2003," said Hockenyos, citing trends in sales tax figures and the local unemployment rate. "Since then, the employment rate has begun to improve, but the improvement has been relatively anemic." The city has been hit especially hard by the loss of high-paying jobs in the technology sector, while the jobs being created to fuel the economic rebound are in lower-paying fields. "We haven't seen any big improvement in the core sectors of our economy…the industries that make a product or service that is sold outside this region," he said. "While things have hit the bottom and bounced up, we still have a significant level of under-employment."

However, Hockenyos said the city is showing signs of reversing that trend. "I do think that 2005 will be a little better than 2004, in part because I think the economic development efforts the community at large is pursuing will bear some fruit. Now that city policy is at least reasonably clear on this, now that the Chamber is pulling with all the oars in the water and pushing toward economic development, I think we can compete successfully." Hockenyos is predicting job growth in Austin of 1.7 percent in 2005. "Brand 'Austin' is beginning to translate into sales. Austin has a buzz out there in the world," he said. "That means people want to visit here as tourism…companies are now looking at Austin again as a place for relocation or expansion."

Hockenyos characterized the Austin economy as likely to slightly out-pace the rest of the state. On a state level, Perryman predicted Texas would begin to catch up with the recovery being experienced nationwide. "If you look at what makes economies grow in the future…such as the ability to participate in national trade, workforce issues, and the ability to capture and retain new technologies…for a variety of reasons, Texas comes out ahead on those," he said. "Consequently, we will outperform the nation over an extended time."

After the formal presentations, the small business owners had the opportunity to ask questions of the panelists. Many of them took the opportunity to seek Hamilton’s opinion on the prospects for school finance reform, changes in the state's tax code, or both. "I think the first place the Legislature is going to go is to an expanded business tax," he said, "trying to pick up beyond corporations, trying to close the Delaware loophole, and trying to expand the base to something like payroll." But he warned that making any changes to the code, whether to help fund education or for any other purpose, would certainly run into opposition from the affected businesses or groups, and the Legislature would likely try to spread the burden over several different areas. "I think it's really hard to pass a big business tax reform. At the end of the day, if I had to guess right now, if they had to fix school finance…they'd boost the sales tax a little bit, they'd boost the alcoholic beverage tax, they'd boost the cigarette tax, they might do something with video lottery," he concluded.

RMA spells out toll road policies

The Central Texas Regional Mobility Authority’s (CTRMA) board of directors has taken special care to ensure that adopted toll policies are clear about when tolls may or may not be collected on phases of the CTRMA turnpike projects that are “under construction.” But they are also making sure that any delay in assessing charges for driving on new capacity roadways doesn’t take too big a bite out of expected revenues.

Eleven members of the Capital Area Metropolitan Planning Organization (CAMPO) signed a letter, dated Nov. 9, asking Chairman Bob Tesch to “defer the collection of tolls on Texas 71 and U.S. 183 until all of the new capacity on those roads has been constructed.”

Rep. Dawnna Dukes (D-Austin) raised the issue at last month’s CAMPO meeting. Rep. Mike Krusee (R-Round Rock) agreed to co-sign the letter and others signatures followed: Sen. Gonzalo Barrientos (D-Austin), Reps. Elliott Naishtat (D-Austin) and Eddie Rodriguez (D-Austin), Mayor Will Wynn, Council Member Danny Thomas, County Judge Sam Biscoe and Commissioners Gerald Daugherty and Karen Sonleitner. District Engineer Bob Daigh, who serves on the CAMPO board, also signed the letter.

“It is imperative that as alterations to the toll road plan are considered, such as the removing of the Loop 1, or MoPac segment from U.S. 290 West to south of William Cannon Drive, that the social equity of the entire plan be considered,” the authors wrote. “Deferring the collection of tolls on Texas 71 and U.S. 183 will preserve the social equity of the toll plan within the Central Texas region and also makes sense from a practical standpoint, as tolls would not be imposed before true connectivity has been achieved on these facilities.”

However, the CTRMA will not wait for US 183 and Texas 71 to be fully expanded before the collection of tolls begins. Bonds, backed by toll revenues, will pay for part of each toll project. Instead, the toll policies adopted yesterday by the board say that the CTRMA “will defer collection of tolls on that phase until additional phases are completed to provide continuous uninterrupted travel for a distance, or to a destination, decided by the CTRMA Board.”

The board’s CTRMA attorney, Brian Cassidy, says that “uninterrupted travel distance” would be different on each toll road project and up to the board of directors to define. At this point, a significant uninterrupted travel distance is considered to be a substantial distance between two points of interest that is more than simply a mile or a mile-and-a-half apart.

For instance, the CTRMA board could determine it was comfortable with tolling US 183 once the expanded stretch crosses US 290. That would keep drivers from being put on a stretch of toll road for two miles, then forced onto frontage roads, with lights, to get to a destination like Austin-Bergstrom International Airport. By tolling significant segments, the CTRMA also continues to take in revenue for future expansions, Cassidy said.

South MoPac also was included in the “under construction” policy, but the CAMPO board seems likely to pull the segment from the Central Texas toll road plan. The proposal will not apply to US 183A, which will open in 2007.

Other policies adopted included the guidelines for establishing toll tag accounts for registered, unregistered and business users; discounted rates for toll tag buyers; introductory toll rates for segments of toll roads once they are open; and a procedure for handling those who fail to pay tolls. Those who ignore repeated warnings to pay tolls could be charged with a misdemeanor and required to pay penalties and court fees. Cassidy said such prosecution would be used only on extreme cases.

Construction on US 183A is expected to begin next spring. Already, the CTRMA has secured a $66 million federal loan. Last month, the Texas Transportation Commission also passed a $65 million grant for the US 183A on first reading. The balance of the $172 million toll road project will be covered by revenue bonds, Cassidy said.

The original request to the Texas Transportation Commission was $50 million. That request was increased when the engineers decided they needed to move the tollbooths near the intersection of US 183A and State Highway 45, cutting some of the revenue the authority was anticipating.. Hence, the final request was for $65 million rather than $50 million in order to cover the bonded debt.

Move ‘em on out . . . Today is the last day to pack for the City Council, their staff, the city manager's office and the city clerk's office. All of them are expected to have their computers labeled and everything that needs to go to the new City Hall packed neatly into plastic boxes by 4:30 this afternoon. So, don't call unless you really need something, but don't wait till Friday either, because Council members and their staff will not be able to access their phones and voice mail, as well as their e-mail from Friday through Sunday. Jason Maurer of the City Manager's office told In Fact Daily that folks can still call that office on Friday, since they have arranged to answer their phones at an off site location. The Public Information Office will continue to answer their lines on the third floor of the Municipal Building, since they're not moving until December 17. All the Council offices are supposed to be open for business with computers humming by Monday morning. City Attorney David Smith said

he was pleasantly surprised by how smoothly his office had been moved from its old location to City Hall last weekend. . . Alvarez chooses to disagree . . . Council Member Raul Alvarez believes yesterday’s In Fact Daily report on the proposed revitalization zone meeting in East Austin concentrated on the negative. He sent us this comment:“I feel that we had a very positive discussion on the Community Preservation & Revitalization Zone proposal at the town hall meeting and that there was more support expressed for the proposal at the meeting than was reflected in the headline and the article on this subject. It was apparent from the meeting that we are on the right track in terms of ensuring that the initiative (does) not just focus on incentives for developers, but also on addressing other related economic impacts by requiring the development of affordable housing, investment in a homeowner assistance program, and the creation of jobs. There was widespread agreement that something needed to be done. The comments focused on levels of affordability, levels & types of assistance, the types of jobs, etc. This is exactly the type of input that we wanted to receive because it will help us strengthen the proposal as we move forward with this process.” . . . Nice work . . . The Central Texas Regional Mobility Authority’s board of directors approved a $20,000 raise for Executive Director Mike Heiligenstein in absentia at Wednesday’s meeting. Heiligenstein was in Washington, presenting an overview of the US 183A project to the American Road Builders & Transportation Association in Washington DC. That brings Heiligenstein’s salary, after a year on the job, to $150,000 . . . On the other end of the scale . . . A report released by the State Auditor’s Office on Wednesday says the typical state employee is a 42-year-old woman working in Central Texas with about 8 years of agency experience. For that experience, she is paid an average of $32,618. A number of lawmakers, including Sen. Todd Staples (R-Palestine), have filed legislation this session to give state employees an across-the-board raise. About a third of the state’s 142,000 classified full-time employees work in Central Texas . . . Reappointments . . . Last week the City Council reappointed Gilbert Martinez to the Building and Standards Commission and Martha Cotera and Clemencia Zapata to the Mexican American Cultural Center Advisory Board by consensus. Mayor Will Wynn reappointed Conrad Masters to the C onstruction Advisory Committee and William Hale to the Human Rights Commission. Also, J ames Hill and Juliet Nious were reappointed by consensus and by Council Member Danny Thomas, respectively, to the Human Rights Commission. The Council appointed Catherine Kyle, a representative of the Austin Bar Association to the Ethics Review Commission.

Copyright 2004 In Fact Daily