5 questions for med school boosters

In our inaugural issue of the Redback Report, we looked at the shortage of physicians in Texas, why the gap will likely grow without additional capacity at our medical schools, and what closing the gap could mean in economic benefits to the state and local economies. We did not, however, say anything about how to fund it, which was in hindsight probably a missed opportunity.

Hey, we’re pretty close to perfect … but remember that when the issue came out, nobody was paying us yet. We aren’t fools. We did, however, beat some local reporters to this story, thankyouverymuchnoreally.

At any rate, our opening line here is actually the first part of Question Number 5 from a post by our own Brian Kelsey, rabble-rouser extraordinaire, about a month ago on his own blog in an effort to get some answers out of the boosters of the new UT medical school on next week’s ballot. Now, Redback hasn’t taken an official stand on Prop 1 and, frankly, it’s not exactly our place to do that. But we have some genuine questions – as do plenty of people – and would love to hear back from some of you.

By Brian Kelsey

Redback Report

I was going to leave this one alone. I don’t like to get too deep into local politics here, but then I read earlier this week about how voting for a property tax increase is like going back in time and investing in Apple stock and so, really, who could resist walking through that very wide open door.

For you non-Austin readers, Central Health, our taxpayer-funded health care district, is asking Travis County residents in November to approve a property tax increase of five cents per $100 valuation in order to raise more money for health care services and partially fund a medical school at The University of Texas at Austin (I know that most grammar experts say to use healthcare instead of health care, but I just can’t do it. Stop reading now if this rebelliousness bothers you too much). For those of you so inclined, there is a long and very complicated backstory about why UT-Austin doesn’t have a medical school, and you can get more details on the proposed tax increase by reading Mike Kanin’s excellent primer, The Med School Solution, in the Austin Chronicle or by visiting Keep Austin Healthy, the PAC set up to advocate for passage of Prop 1.

The gist of it is that the proposed tax increase would raise about 10% of the approximately $4 billion needed over 12 years to fund the medical school and expanded services, or about $54 million annually, an increase of about $100 on the annual tax bill for families living in a median-valued home of $200,000. The Seton Healthcare Family has pledged $2 billion, and UT is in for at least $25 million annually. Supporters are also looking toSection 1115 Medicaid Waivers for federal matching funds of $1.46 for every $1.00 contributed locally.

In addition to the projected benefits in terms of improved access to health care services, Prop 1 supporters are arguing their case on the grounds of economic development. According to a TXP study, funded by a coalition of supporters going by the name HealthyATX, the medical school and teaching hospital are expected to result in$2 billion in new economic activity and 15,400 jobs. TXP is one of the best firms in this business, so to the extent that you believe economic impact analysis can produce reliable data, I’m sure their numbers are as solid as any.

I do, however, have some other questions for Prop 1 supporters:

1. How is a tax increase like investing in the stock market? The comparison to Apple stock was stretching it a bit. Pitching tax increases as investments is standard fare in political communications, but I don’t think this convinced anybody. The $100 increase in my property tax bill may have a social return on investment–we decided that health care is a public good when voters created Central Health in 2004 after all–but that’s not the same as a personal return on investment, much less the staggering gains you’d see from investing in Apple 30 years ago. Yes, you could argue that one day a medical breakthrough at the UT-Austin medical school may benefit me directly, but, I don’t think that’s too convincing, especially given the mood of taxpayers right now.

And speaking of medical breakthroughs…

Click here to read the rest of his post on Civic Analytics.


Trib: Cities paying off state budget cuts

Municipal debt has more than doubled in the past decade in Texas and, in just the last five years, some cities have seen an increase up to 45 percent just in the amount of money they’re having to pay for STATE transportation projects, according to a fascinating little report in the Texas Tribune today. The Texas Municipal League says this is all thanks to budget cuts that have led departments like TxDOT to pass costs onto cities, including $6 million billed to Pflugerville for an exit ramp.

Read the report here, including Comptroller Susan Combs’ response to the TML assertions.

State Farm wants to sell earthquake insurance … in Johnson County

OK, energy people, I know this is on your radar. 

But we’re not sure how up-to-speed Normal Texans are on this issue. Namely, the fact that Johnson County is plagued with earthquakes and people are starting to think that it has something to do with the wastewater disposal part of the fracking going on in that part of North Texas. 

No, you’re not the only person who thinks its a little odd that Johnson County, historically not a seismic hotbed by any stretch of the imagination, is suddenly feeling the earth shake – to the tune of 10 earthquakes in the last month. TEN. EARTHQUAKES. IN THE LAST MONTH.

(as an aside, nerd alert – I love the URL on that above story by the star-telegram. whats-up-with-all-the-earthquakes.htm…) 

And now State Farm has noticed, offering to sell earthquake insurance there – a bizarre little situation that would seem similar to being sold snow-and-ice insurance in Hawaii. One would think. 

Read the Dallas Observer’s report here, start educating yourself on the issue, and look forward to coverage of this and other related issues in our Summer edition of the Redback Report! 

DMN: County taxpayers could lose if Texas rejects Medicaid expansion

The Dallas Morning News’ Dave Michaels has some insight on what it could mean to counties and taxpayers if Texas rejects the expansion.

WASHINGTON — States that look skeptically at a massive expansion of Medicaid under the Affordable Care Act were among the winners in last week’s Supreme Court health care ruling. Among the possible losers: county taxpayers.

If the Texas Legislature chooses not to expand its Medicaid rolls in 2014 to cover an additional 1.5 million people, counties and public hospitals would continue to shoulder the burden of paying for the uninsured, who often seek expensive care in emergency rooms.

Unlike many states, Texas does not directly subsidize the cost of caring for the uninsured. Instead, taxpayers in Dallas County and elsewhere help pick up that tab through property taxes that support safety-net hospitals such as Parkland Memorial Hospital.

Kelsey: Capital of the “Free Agent Nation”

Our man Brian Kelsey, co-founder of the Redback Report and local hot-shot economy expert, laid out his vision for what lies in store in Austin’s economic future in a great little Austin American Statesman piece this weekend.

Cities  are struggling with the skills gap and the challenge of bringing more jobs to their towns only to find themselves having to recruit the skilled labor to fill those positions. Even in Austin, which prides itself on the smarts and skills of its residents, only 50 percent of the residents over 25 have a post-secondary degree – which is needed for the vast majority of job openings for positions that pay enough to support a family.

You will especially love this piece if you, like us, are among the 25 percent of Austinites who are self-employed or have otherwise non-traditional employment arrangements. Brian believes that number will grow for several reasons, not the least of which

“In fact, the growth critics in Austin should be the ones protesting loudest about the poor decisions we’re making at the state level concerning investment in education and workforce training,” Kelsey said. “The more we can educate and train existing residents for higher-wage, higher-skill jobs that employers need, the less we have to rely on new people moving here for those jobs.”

Then there are those of us who elect NOT to work for someone, and we account for about 25 percent of working Austinites – the self-employed or those who are in non-traditional job situations. Kelsey gives us a shout-out, too, believing that Austin’s unique and enterprising nature (and that of those who choose to put down roots here) rightfully encourages such behavior – critics (who think we’re being lazy and hedonistic) be damned.

“I think it’s a confluence of a changing economy and shifting attitudes about work, particularly among younger people,” Kelsey said. “The pendulum was solidly in the camp of large corporations in the 1980s and 1990s, when the best and brightest stepped all over each other for positions with clearly defined career ladders at prestigious companies. You made good money, earned promotions and could plan your career in 10-year increments.

“Those days, for the most part, are over.”


Kelsey goes on to discuss the perceived skills gap and how bright young people who want to make an impact on the world are choosing to do it in their own way, not as part of a larger corporate culture in a job that may or may not be around in 5 years. Not that there’s anything wrong with that…

Click here or on the link above to check out the rest of the story, and let us know what you think in our comments section here.

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New jobs: This is why we Buzzkill

In our newest Buzzkill, we take a look at recently reported new-jobs numbers about companies moving into Austin and Texas from out of state – and we posit that the vast majority of new jobs come from startups and expansions by local businesses, who we think don’t get the credit they deserve for job growth.

Why does this matter? Take a look at the recent article published in the Lompoc Record, just outside Santa Barbara, covering a presentation in that fair city by Austin’s own Gary Farmer, who heads the business-supported Opportunity Austin economic development program.

Local job growth has been in the news a lot lately, with Apple promising thousands of jobs here and Austin winning the distinction of being ranked No. 1 in 50 metro areas across the country in job growth over the last eight years.

Coverage of the issue, including the presentation by Farmer in Cali, is decidedly heavy on the side of recruitment from out of state – with big emphasis on how much of our new jobs come from outside of Texas these days.

Not to take anything away from Farmer, whose tireless efforts to recruit businesses to Austin is definitely a win for the city and for the state. But the question is not whether he’s effective or even whether organizations like his – which has raised millions to recruit from out of state – should refocus.

There’s a place for all of us here, not to get too Small-World-After-All on you.

At issue, however, is whether local companies – startups and expansions, in particular – are getting enough credit for creating the lion’s share of the new jobs.
Where do we get the most bang for our buck? Why is it that every time we cover new jobs, we take the out-of-state angle? If it’s true that less than 6 percent of new jobs are coming from out of state (as our numbers show) then why are we spending 90 percent of our time talking about the 6 percent? What of the other 94 percent that are homegrown?
Given the numbers we’ve seen in our research, we don’t really get it.
It’s worth considering whether we’re getting the most bang for our buck when taxpayers and businesses are investing money in bumping Santa Barbara and other West Coasties off the map as The Best Place to Do Business – while the real employment breadwinners for cities and the state are right here in Austin.
Are we advocating that money be pulled back from recruitment efforts like Farmer’s? Absolutely not. There’s no question he and his organization are effective.
But we believe it’s worth noting that the true job heroes are locals – just take a look at our latest Buzzkill and find out why.

Ill effects from the can ban in New Braunfels

As you know, one of our founders is also publishing a beverage industry site – and it’s been tracking the ban on disposable containers in the rivers of  New Braunfels since the city passed that ordinance last summer.

And as many suspected, business along the Comal and Guadalupe in New Braunfels has been dismal for some long-time entrepreneurs, who battled the ordinance that was pushed as a way to curtail drinking on the river.

Here’s the Texas Beverage Industry Journal’s post, which takes the position that the ordinance is unconstitutional. Linked inside it is more coverage, both with a bias and without. Read up, as this is already spreading to San Marcos and could have big implications for the rights of other cities to ban drinking – or the things that make it possible.

AAS: Study says tort reform didn’t lower healthcare costs

Mary Ann Roser at the Statesman writes:

A new study found no evidence that health care costs in Texas dipped after a 2003 constitutional amendment limited payouts in medical malpractice lawsuits, despite claims made to voters by some backers of tort reform.

The researchers, who include University of Texas law professor Charles Silver, examined Medicare spending in Texas counties and saw no reduction in doctors’ fees for seniors and disabled patients between 2002 and 2009. A 2003 voter campaign in Texas, and some congressional backers of Texas-style tort reform in every state, however, argued that capping damage awards would not onlycurb malpractice lawsuits and insurance costs for doctors, it would lower costs for patients while boosting their access to physicians.

Tort reform is a controversial topic likely to be resurrected by Republicans and doctors’ groups who hoped to make it part of the 2010 federal health care law.

Motiva Enterprises new CDU will stay shut for several months, owners say

(Reuters) – Motiva Enterprises LLC is preparing to keep its new crude oil unit shut for “several months” as it investigates major corrosion problems that have crippled the country’s biggest refinery weeks after a massive expansion.

In the first public acknowledgment of a potentially long-term outage at the Port Arthur, Texas, plant, Motiva co-owner Royal Dutch Shell Plc confirmed the 325,000-barrel-per- day (bpd) unit was shut due to “corrosion problems,” as originally reported earlier this week by Reuters.

“The outage of the new crude unit may continue for several months, while the causes of the issue are established and rectified,” Shell said in a statement late Wednesday.

Here’s the link for Reuters coverage this week.

Report: Houston ISD to ask voters for up to $1.8 billion

The Houston Chronicle is reporting that the Houston Independent School District plans to ask voters for a bond package up to $1.8 billion.

The proposal will be officially revealed on Thursday. Our sources say similar things – that i’ll be between $1 billion and $1.8 billion ( a big difference to be sure) and likely change again by the time the ballot deadline comes along.

It’s already a bond-heavy package on the ballot for Houston voters in November, with several city initiatives that proponents hope will be approved by the large number of Dems and minorities voters expected at the polls during a presidential election.  Between that dynamic and the fact that the recession makes it cheaper to build new construction, it would seem a perfect storm for bond elections – but we’ll have to wait and see just how much they plan to ask for.

And they’ll have to justify to critics, too, asking for more money even as they continue to spend the 2007 bond voters already passed for schools in the mount of around $800 million.

Meanwhile, though, here are some more details from the Chronicle, pasted below. You can read the entire story online here. 

The Houston Independent School District is preparing to ask voters to fund up to $1.8 billion in bonds to replace and upgrade aging campuses.

Superintendent Terry Grier has said the bond referendum – which would go to voters in November if the school board approves – likely would focus on high schools.

Grier plans to reveal his specific proposal Thursday. Sources familiar with the plan say the amount will be as high as $1.8 billion, likely requiring a property tax increase of 6.25 cents per $100 of assessed value.

“You could spend many times that number and still not touch everything,” Grier said.

At that amount, owners of a $200,000 home would see their annual property tax bill rise by $91 annually in a few years, when the district prepares to start construction.

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