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Drought-ravaged Lake Travis faces grim economic outlook

Friday, September 30, 2011 by Josh Rosenblatt

With Central Texas in the midst of a historical drought, a report released yesterday confirmed many people’s worst fears about the resulting economic impact on the Lake Travis area: that low lake levels can, and most likely will, have a devastating effect, quite possibly to the tune of $21 million a year.


The report, which was presented yesterday at the Oasis restaurant, was commissioned by a coalition of some 17 governments, nonprofits, and businesses in the area, including the city of Austin, the city of Lakeway, the Lago Vista Economic Development Alliance, Samsung, and Travis County. According to the report, the lake’s current low levels could decrease revenues in the area by between $16.4 and $21.9 million annually. Those figures account for both the decrease in tax revenues and potential loss of the “premium” status of the area, which, the consulting firm RCLCO determined, adds 15 percent to the combined value of properties in the region.


That estimate also includes $1.7 million in lost sales tax revenue, $45,000 in decreased hotel receipts, and $120,000 less in mixed drink revenues.


It’s a powerful wake-up call to the Lake Travis region, which brought in more than $112 million in lake-related spending last year (including food, hotels, sporting and leisure activities, and boat sales). Compare that to the $113 million brought in by the South by Southwest Festival and you get a sense of just how important a vibrant and full Lake Travis is to the economies of Austin, Travis County, and myriad other local governments.


County Commissioner Karen Huber, who spoke on behalf of the coalition yesterday, said stakeholders in the area need to put aside their ideological differences and look for a common solution to a common problem


“This study has been a long time coming,” Huber told the approximately 100 people in attendance at Thursday’s presentation. ”The challenge in doing such a study was to do one that was a true tool. A study to explore one particular issue is not the goal we had in mind. We wanted to come together and do a quantitative study not in association with any particular policy goal in mind but a tool that can be recognized as valid by all stakeholders.”


The study focused on eight cities around the lake, all growing over the last two decades. In 1990, the population of the study area was 12,772, with 5413 households. By 2010 the area’s population had more than tripled, to 45,547. The area now boasts 18,093 households, and that number is expected to jump to 22,000 by 2015.


Revenue increases are even more dramatic. The residential property tax revenue last year alone totaled more than $127 million, with an additional $5 million coming from sales taxes. In 2010 the total assessed property value of the area was $8.4 billion.


The study also estimates that 2.8 million visitors (including boaters and second-home owners) came to Lake Travis last year, and spent for than $168 million while they were there. A dramatic decrease in lake levels is resulting in far less use of the lake and far fewer trips to it, meaning revenues are decline and will continue to do so.


“If lake levels are persistently low, a 50 percent drop in visitors potentially results in loss of 580+ jobs and $33.5 million in economic value,” the report states.


Experts say that a water level of between 660 feet and 680 brings with it an increase in economic activity. Once Lake Travis goes below 650 feet, however, the result, most likely, is “serious economic impacts.”


As of last night, the Lake Travis water level was at 629.33 feet.


Pete Clark, the proprietor of Carlos’n Charlie’s and numerous other lake establishments, compared owning a business on Lake Travis during a summer with such low water levels to operating a toy store the year Christmas is canceled “because all of our efforts are concentrated into about a 90-day period,” he said.


After the meeting, Huber told In Fact Daily that the report is just a start, a reference tool that stakeholders up and down the watershed can use to come up with solutions to the area’s long-term water policy problems.


“We want this in everyone’s hands,” said Huber. “So anyone involved in water policy- making can say, ‘This is a tool. How does it relate to the decision I’m working on right now?’ As the population grows there are more and more demands placed on our water resources and we need to have the data to make decisions.”


Addressing what she hopes to see happen as a result of this report, Huber said, “We really need to continue to work on statewide water policy. Our decision-making is fragmented. TCEQ (Texas Commission on Environmental Quality) has some authority. LCRA (the Lower Colorado River Authority) only has a small piece to that as it relates to drought. We need to tighten it up and look at it in the bigger picture and see how we can best plan for the droughts of the future.


“Because after a drought gets here is not the time to change the policy process.”

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