State government steadies Austin against recession
Austin — Recession-proof.
It's a term many cities would like to have tied to their economies. And it's a term one often hears when talking about Austin.
While ''recession-proof'' may be a bit of Texas overstatement, the fact remains that the city's economy enjoys a certain sense of stability, thanks to its role as the state's political hub.
''The high complement of government payrolls provides an excellent buffer to recession,'' says Dan Davidson, former Austin city manager and now an executive vice-president with one of the city's leading real estate firms. ''We have a good balance between government salaries and private-sector salaries.''
A few figures bear out this theme of stability.
According to the US Bureau of Labor Statistics and the Texas Employment Commission, Austin's unemployment rate averaged 3.7 percent for the 1976-81 period. The average rate for the US period was 6.8 percent.
''In 1970 Austin ranked 56th in the nation as to size of city,'' says Mr. Davidson. ''But from 1972 to 1980, Dun & Bradstreet's building report showed that in every quarter, Austin ranked between seventh and 14th in the dollar value of building permits issued.''
''That puts a lot of people to work. And much of that construction evolved out of the University of Texas and the state and federal governments,'' he says.
''Even during the Great Depression, Austin was less affected than most cities because of the predominance of public employment. It lends an air of permanence to the city, and it (the public sector) experienced quite a bit of growth and expansion during the post-World War II period,'' says University of Texas economist Lynn Anderson.
The state government's share of Austin's labor market has declined during the past few years--from 24 percent in 1975 to 19 percent last year - as more industry has moved in to help diversify the city's economy.
But the state remains a formidable presence: Its payroll in the Austin area--including employees at the sprawling University of Texas campus downtown--totaled $666.6 million during 1981, according to the state Comptroller of Public Accounts office.
The public sector--including federal, state, and local government--accounted for 32 percent of the Austin area's nonagricultural jobs during 1981. Of that, about 59 percent of all government workers punched state time clocks.
But the state government's effect extends beyond its immediate payroll.
The Austin campus of the University of Texas enjoys a fall enrollment of about 48,000 students. Some 20,000 sign up for summer classes. The university newspaper's advertising office estimates that these students bring with them $75 million in discretionary income.
This can be seen in the amount of condominium construction under way nearby. Streets to the west of the campus are replete with buff-colored skeletons of rising apartments and condominiums, the piercing sound of power saws, and the pungent smell of sawdust.
''The university area is probably one of the strongest in Austin with respect to new construction activity,'' says one appraiser. ''That area shows one of the highest absorption (sales) rates and one of the highest appreciation rates in the city. People see the construction sign and the number to call, and the projects are sold out before they're even finished.''
Many of these units, city officials say, are bought by wealthy parents with children at the university. The parents get a tax break on the condo and when the student graduates, the parents sell the condo--often recouping the cost of the education in the process.
Because Austin is the political center of Texas, trade associations and interest groups make their headquarters there. And for 120 days every two years, the city becomes a beehive of activity as the state Legislature meets: In come lobbyists throwing lavish parties; in come 31 state senators and 150 state representatives, all of whom need to be fed, and the vast majority of whom need to be housed.
For the most part, local officials say, the city and state get along pretty amiably during these frantic periods. But the sudden influx of legislators has been known to spark some unique clashes between state and local officials.
One city official, who pleads for anonymity, tells of a state representative who, during the last session, was so miffed at receiving a city parking ticket that he offered a motion to dissolve the City of Austin and establish the District of Travis--along the lines of the District of Columbia. The motion was rejected. And vitriolic speeches have been leveled at the city for its treatment of the occasional legislator picked up on drunken driving charges.
Episodes like these have led some local wags to demand that the Legislature meet only two days every 120 years instead of 120 days every two years.