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Username: Julio Gonzalez Altamirano
PersonId: 6829
Created: Thu Feb 04, 2010 at 11:17 AM CST
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Web Page: http:///www.keepaustinwonky.wordpress.com

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Julio is an Austinite.

East Riverside to Downtown is the ticket


by: Julio Gonzalez Altamirano

Mon Feb 24, 2014 at 01:23 PM CST

Austin’s City Council will choose an urban rail route to put on the November ballot around the end of May. In December, Council narrowed their focus to the Highland-Core-East Riverside set of sub-corridors. This past Friday, the transit staff and consultants leading the route research process briefed the Mayor’s Central Corridor Advisory Group on their recommended route.  Below is my visualized summary of the decisions they made.

 

 

 

So far, the tea leaves indicate that Council will be asking voters to approve rail from Highland to the medical district. While there is widespread acknowledgment that the data supports a route covering East Riverside and downtown as the best choice, Council members have been hesitant to publicly embrace the prioritization of that route. Beginning rail service at the so-called Highland corridor is left as the likely option. Here's why it’s the wrong choice.

1. East Riverside to the medical district has the numbers

Rail has high fixed operating costs relative to bus – there are signals, power sub-station infrastructure, additional rail-specific regulations, and track maintenance. And once a rail line is laid, it’s extremely expensive - if not impossible - to ‘move the tracks’. Bus re-routing is simpler because it runs on existing roads.

On the other hand, rail has lower operator labor costs. That makes rail a strong choice when there are a lot of riders packing into a chain of rail cars and certainty about enduring demand by those riders. Otherwise, bus is a better starting point. The precise threshold for rail-supporting population density is an elusive mark. That said, literature reviews make it clear that densities under 10,000 people per square mile don’t make the cut.

The sections of the city that have transit-supportive densities are acknowledged by CapMetro’s service guidelines.

 

They are also acknowledged by the Austin Chamber of Commerce’s most recent Mobility Report.

 

 

As both these sources make clear, the Riverside corridor presently has supportive density and perhaps most importantly, already has the land use policy and neighborhood plan to support more. Highland does not presently have the necessary density.

2. Highland to downtown will be another poorly-performing Red Line

Some areas of the Highland corridor may get the appropriate entitlements that catalyze transit-supportive densities in the future as part of the Airport form-based code rewrite. Unfortunately, the consultants and staff advising the Mayor rely on a population 'forecasting' (I am using the term very loosely) model - referred to as the ‘Demographic Allocation Tool’ (DAT) - without any independent validation of its predictive powers. And that's not surprising, since the DAT is not designed to actually be predictive.

Instead, the DAT scores different parcels on ‘how nice it would be’ if growth happened at said parcel – not the actual likelihood those parcels will experience growth. If the tools tell us the real nature of the task, then the use of this approach reveals an almost complete focus on selecting a route to ‘shape growth’.

The lack of awareness or scrutiny about the validity of the DAT is a substantial, egregious oversight that speaks to the utter lack of rigor surrounding transit planning in Austin; it remains buried because of the inherent difficulties in getting elected officials and their staff, media, and other advocates interested in such technical questions. The projections from the DAT are the official reason that Highland is even under consideration. But if we do a basic reality check on the Highland population growth rate implied by the DAT scoring, it’s clear that it is making highly-speculative assumptions.

 

 

DAT allocates a share of population to Highland that would require it grows at twice the rate of Austin. The DAT ignores the cyclical nature of the economy, which means that it doesn’t plan for the possibility that Highland's hoped for redevelopment could stall right before rail launch due to a perfectly normal recession. And remember, Highland is near the middle of the city and is already somewhat developed. Many Austinites are not aware that areas near the core - such as Highland - had modest or negative growth from 2000-2010.

 

 

Because of the high fixed costs of rail and the impossibility of redeploying it, a low ridership route will create a woeful financial outlook for local transit operations. Much like the Red Line, it would by a highly-subsidized service that eats up operational revenue that could move more people and actually reduce car-dependence if it was dedicated to improving bus frequency.

 

 

 

If CapMetro were to have both the Red Line 1 and Red Line 2 (Highland) on its books and they had similar financial performance, that would mean 10% of operational funds are being dedicated towards 2% of ridership. That is an incredible destruction of public value as a result of lack of rigor in forecasting and growth-shaping hubris by policymakers. It would drain much-needed funds from bus operations and further debilitate the political feasibility of rail in Austin.

3. This is a great time to build a bridge

The 2008 global financial crisis, ensuing recession, and accompanying monetary policy response mean that the costs of borrowing capital are remarkably low. Moreover, while Austin’s growth streak – and the strong bond rating it allows - is likely to continue, it is not an immutable attribute of the region. Simply put, we are at the top of our fiscal game and borrowing is cheap. A wise local government would be taking on the tough infrastructure challenges right now.

Sadly, our elected policymakers and transportation officials are remarkably timid in embracing this reality. They are not laying the groundwork for public understanding of why this is a great moment to build a tunnel or bridge across the Lake for rail. Instead, some elected officials and transit staff are already laying the groundwork against infrastructure construction by making arguments about the total figure and the alleged complexity of building a bridge across water. Starting rail at Highland is the path of least resistance. While that corridor may be ready to support rail sometime in the middle of this century, it is not the right choice to start rail.

What’s needed now is grassroots action to persuade Council that there is community support for making the wise choice of building a bridge that joins East Riverside and the core; they also need to hear that starting rail at Highland will be a political loser this November.

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Towards Ending Austin's 'Meetingopoly'


by: Julio Gonzalez Altamirano

Mon Jan 21, 2013 at 11:53 PM CST


This past November Austinites replenished our municipal democratic practices by shifting towards geographic districts and moving elections from May to November.  However, much work remains to be done to ensure that city government is truly open to the community's diverse perspectives. A high priority for reform is the City of Austin's approach to lobbying and public input.  

The city manager, city staffers, and council members are full-timers who work typical day hours (i.e. "9 to 5"). Presently, our policymakers routinely receive public input while the typical employed adult Austinite is working.   One-on-one policy advocacy and lobbying also happens during work hours.

Even when public hearings are scheduled during evenings or weekends, these sessions take place at a specific place during a set time.  If you can't get a babysitter, or you are out of town for work, or have a conflicting civic commitment, or can't afford/find the transportation to the location, then you are out of luck.  While a few superstar citizens persevere, these barriers create a 'meetingopoly' that favors professionals compensated to navigate pet issues through the process.  

In my experiences I've found that council members and civil servants are responsive to new voices; many are deeply sincere in seeking out exhaustive public input.  The problem I am identifying is that it is very hard for people to successfully and consistently engage without it being their job.

Truly democratizing public participation in Austin requires adoption of proven reforms including:

- Increasing the importance of digitally-submitted public input

- Shifting from exclusively paying consultants to chat with NGO leaders and civic junkies towards actually engaging the average Austinite through citizen juries and deliberative polling

- Adopting publicly-financed clean elections

As an initial step, I've requested that the City of Austin adopt the White House's approach to digital petitions.  This move will facilitate collective action, encourage the transition towards digital public input, and create easily-accessible, transparent accounts about where policymakers stand. Please join me in supporting this request here.

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Past or Future? Austin Latinos & City Council Design


by: Julio Gonzalez Altamirano

Tue Jun 19, 2012 at 06:00 AM CDT

(Interesting read as Council prepares to debate the merits of two competing geographical representation systems. - promoted by Katherine Haenschen)

When trying to determine what city council election system is best for Austin's Latino community, one has to consider the remarkable demographic transition revealed by the 2010 U.S. Census data outlined in the charts above.

Single-member districts (SMDs) would make sense if the Austin Latino community was projected to remain a geographically-concentrated minority.

But if current demographic trends hold, an exclusively SMD system - such as 10-1 advocated by Austinites for Geographic Representation - creates three substantial problems for Austin's future Latino majority.  Fortunately, a hybrid mix of SMD and at-large council seats (similar to Houston and Corpus Christi's systems) addresses these problems while satisfying community demands for neighborhood-focused council members.

Read more below the jump.

There's More... :: (29 Comments, 546 words in story)

What does empirical political science tell us about single-member districts?


by: Julio Gonzalez Altamirano

Sat Nov 19, 2011 at 07:18 AM CST

In Austin, SMD proponents claim that a new electoral scheme will (1) improve the delivery of public services by creating geographic representation, (2) increase the proportion of Latinos elected to the City Council, and (3) address relatively low voter turnout rates. Pro-SMD arguments are often theoretical or anecdotal; luckily, empirical political science provides helpful insights about the usefulness of SMDs.

Austin's peculiar 'at-large' method  as well as the so-called 'Gentlemen's agreement' that protects Latino and African-American seats is a deviation from conventional at-large systems. In the Austin implementation there are 'places' that force a voter to compare candidates running for a specific seat - candidates explicitly run against each other. Hence, in Austin, someone can run for the 'Hispanic' seat. The more conventional arrangement features a pool of candidates and the voter allocates their multiple votes across that pool. Candidates are not running against each other. This has important implications when considering the impact of SMDs on ethnic and gender representation.

With that important clarification, here are some key findings from the political science literature on SMDs that are relevant to Austin's discussion:

1. Geographic districts are likely to help Latino's 'descriptive' representation, but might hurt women's. Including some pooled at-large seats can reduce risk to women's representation.

The most recent and exhaustive review of at-large versus single-member districts in a national data set concludes that only African-American male candidates are significantly helped by single-member districts; white women candidates are hurt.

Latinos, Latinas, and female African-Americans seem to perform at relatively similar levels under the 'pooled' version of at-large districts (as opposed to Austin's place-driven implementation). Hispanics show significant variation in the level of ethnocentric voting and so SMDs tend to beat the at-large average only when there's a very high density of Hispanic voters.

The precise reasons for the success of white women in at-large systems are elusive, but there's a suggestion that the lack of direct head-to-head competition in the at-large pools is more helpful to female candidates' style and triggers less overt sexist bias in voters. Black men are disadvantaged by the at-large systems, but significantly benefit from ethnocentric voting under SMDs.

However, if we dig deeper into the data and older research and adapt it to Austin's quirky citywide implementation, it becomes clear that the effect on Latino descriptive representation would be high because of the dense nature of the districts being designed, as well as the fact that the Austin place-driven implementation potentially forces some of the ethnic polarization through head-to-head contests that the pooled systems avoid. For example, in Boston, the first Hispanic city council person was elected from a citywide pool by assembling a coalition of progressives, non-Latin American new immigrants, and Hispanics. According to the candidate, when Bostonians voted for him, they were not picking him 'over' an explicit choice, but rather including him in their preferred pool.

The implication for Austin is that a hybrid system with some at-large seats might be the best balance of the different 'descriptive' representation needs. It's important to note that the at-large seats should be a pool and not place-based if the goal is to support women or give an additional shot to African-American or Asian candidates. Having to explicitly pick a candidate to run against might generate bias that makes success difficult.

2. SMDs are unlikely to improve long-term citywide voter turnout.

The most recent study with the most extensive controls found that SMDs are not drivers of increased turnout. While it's possible that some previously inactive neighborhoods will see more activity as the result of contested elections, there's no empirical basis to claim that SMDs will be a helpful piece in increasing turnout. Instead, the timing of elections was found to be the most important element.

However, the fact that SMDs do not affect turnout is not an argument against them. For example, the glib tone of this Statesman editorial against SMDs urging some 'participation' boot-strapping by marginal Austinites is completely off the mark. SMDs are not the path, but overlooking the sub-optimal design of our institutions in properly engaging the young, the poor, and the newly arrived is the wrong direction for boosting Austin's civic engagement. Instead we should consider changing the timing of elections, mail voting, public financing, and bulking up teens' civic education on the mechanics of voting.

3. A higher number of districts are likely to increase public spending unless the Mayor gets a veto.

This is a repeated finding over the last few decades. As the number of seats (whether at-large or SMD) increase, then the coordination costs amongst the higher number of legislators along with their constituent connections mean higher expenditures relative to similar communities with fewer legislators. Whether this is good or bad is up to one's values: one person's park is another's pork. However, more recent research indicates that local governments where Mayors have a veto tend to reduce if not eliminate the additional spending since the Mayor is responsive to a citywide median voter. The takeaway is that smaller bodies coordinate more efficiently and that providing the Mayor with a veto is a good hedge against excessively costly logrolling.

In Austin, we will have to balance the desire to create opportunities for African-American representation with logrolling downsides.  The larger the final council member count, the more important including a Mayoral veto in the package becomes to reduce the risk of becoming a public expenditure outlier.

4. SMDs are likely to create unpredictable NIMBY dynamics.

One of the more eloquent critics of SMDs in Austin has been Chris Bradford who has raised the idea of 'ward courtesy.' Certainly, there is some support for ward courtesy in the spend-and-let-spend literature mentioned above. However, the most detailed examination of locally-unwanted land-uses (in this case fire stations and community centers) and SMDs found that the uses still got sited somewhere. In Austin, SMDs would disrupt the existing sole median voter (e.g. a Central Austin preservationist) with a new set of many median voters . It doesn't seem that the incentives under such a scheme prevent collusion by coalitions of SMD representatives from packing or ganging up on one district.

For supporters of thoughtful land use like Chris, this could cut both ways. For example, on the one hand, building aggressive market-rate housing density in the core could become more viable since those communities will lose their outsize influence over the existing electorate's median voter. This might be unwelcome news to some of the most vocal proponents of SMDs. SMD reps accountable to neighborhoods could also become a lot more polarized around topics such as supportive housing than the current set of citywide officials. I don't think anyone can claim that the precise pattern of NIMBYism that will arise is obvious or that it will be permanently enshrined by an SMD system.

The transition to SMDs will lower the barriers to entry for minority opinions (as opposed to 'minority' ethnic groups) and sometimes they will win. I'd expect a much faster tempo of incorporation of new ideas; whether they gain enduring clout is hard to assess.

5. The dominant coalition displaced by SMDs is likely to resort to greater use of referendums to achieve policy priorities.

A displaced coalition might try and circumvent the new SMD process through the use of referendums.  This step provides a mechanism to re-establish the previous sole, citywide median voter. The implication: a transition to SMDs should ensure that the qualification for a referendum process is meaningful enough that it doesn't undermine the elected branches.

Originally posted at www.keepaustinwonky.wordpress.com

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How the Statesman Can Improve its Discussion of the Austin Economy


by: Julio Gonzalez Altamirano

Mon Oct 17, 2011 at 11:10 PM CDT

The Statesman's review of the Austin economic climate is a much-needed profile and (to some extent) evaluation of the city's economy. There are four areas where the Statesman's coverage could improve.

1. Don't forget about sub-group income levels. Not everybody is 'OK'.

A chart of family median income in Austin, TX

I often refer to the above chart as the most important overlooked chart in Austin policy and politics. Focusing on the city's overall economic situation and rendering an 'OK' evaluation based simply on unemployment relative to other municipalities obscures the significant pain being experienced by sub-groups. Moreover, making it simply a question of unemployment rates also obscures the decline in wages.

2. Discuss policy choices. Policy nihilism conceals the possibility of making unemployment lower sooner.

The coverage did not delve into  policy options to reduce unemployment through municipal action. There are many potential policy choices from the left and right (e.g. have local public sector adopt a German kurzarbeit scheme, ease development regulations, undertake more capital projects and accelerate existing projects, etc.). The absence of a policy discussion might leave readers with an impression that the conventional wisdom dictates there's nothing that can be done or worth discussing to ameliorate local unemployment in the short-term.

3. Focus on the value added (or destroyed) by policy makers on top of the City's economic fundamentals.

The Statesman's article implies that there are certain aspects of the local economy - the location of the state public sector as well as the presence of technology companies - that help Austin outperform other communities. However, looking at relative levels can be misleading. As I have argued in the past, it's better to focus on communities that share a narrow band of characteristics that make them quite similar to Austin. So, other state capitals with tech hubs in the Southwest would be more appropriate than nebulous comparisons to other cities.

Visually, the newspaper could do a set of simple scatter plot visualizations to give readers a sense of how Austin performs given certain underlying characteristics. Said visualization approach replicates a multivariate analysis in a user-friendly way.

My concern is that readers will walk away thinking that the existing policy mix is value-creating when a more statistically-sound evaluation might reveal that we are actually wasting the underlying trove of economic advantages we possess.

4. There is no forecast or 'threat' assessment.

Toward its conclusion, the piece indicates that Austin has a positive 'reputation' that allows talent to be attracted. In my estimation, I believe this has to do with people thinking of Austin as a place with interesting cultural amenities, housing affordability relative to the coasts, quality public spaces, and dense urban land use. The article does not consider whether this important asset is likely to remain given the city's existing land use decisions. The article does discuss the potential downside of public sector layoffs, but in general, it did not ask whether the underlying mix of industries and policies are best moving forward.

I sincerely hope that the Statesman's journalists will consider some of these suggestions as they continue with their important series.

Originally posted at Keep Austin Wonky.

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Latino density & per capita budget cuts


by: Julio Gonzalez Altamirano

Wed Mar 02, 2011 at 03:02 PM CST

The current legislative session has been described as possibly the "worst in recent memory" for Latino Texans. What are likely coalitions that might be able to mitigate the budget cut proposals under consideration?

To figure this out, I visualized Texas county data matching Latino population density and per capita budget cuts.  Demographic data on total population and Hispanic density is based on 2010 Census data made available at the Texas Tribune data portal.  Projected budgets cuts are based on Center for Public Policy Priorities (CPPP) estimates; the $10 billion cut scenario was utilized for the Medicaid visualization.  My complete source file can be found here.

Let's start with public education.  The blue line represents the state average per capita K12 cut: $127. The 2010 Census data indicated that Texas is 38% Hispanic, so counties above that are above average in terms of Latino density.  Finally, the larger the size of the bubble, the larger the plotted county's total population.  Examining the chart yields that a likely best strategy for pro-education advocates is to build a coalition of Harris and Dallas-area county legislators along with targeted low population counties with high per capita cuts that are represented by conservative legislators.

On the Medicaid front, there is a stronger correlation between Latino density and size of per capita cuts.  The average state cut is $406 under the $10 billion cut scenario. This is represented by the red line.  Two Rio Grande Valley counties - Hidalgo and Cameron - are particularly hard hit under any of the CPPP scenarios.  Legislators from the RGV might be able to form a pro-Medicaid coalition with the eclectic mix of small- to mid-size counties that also will be experiencing very high per capita cuts.

Overall, the current budget promises to wreak havoc on all of Texas, as well as disproportionately burden many Latino communities across the state.  It is the culmination of years of reckless, ideologically-driven budgeting. Hopefully, the extreme nature of proposed cuts will create a space for new, surprising coalitions to propose a more balanced approached to repairing the budget mess. Such an approach would include use of the Rainy Day Fund and practical, fair revenue increases.

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Austin's homicide rate spike (Updated)


by: Julio Gonzalez Altamirano

Sun Jan 16, 2011 at 11:34 PM CST

( - promoted by Karl-Thomas Musselman)

The Statesman recently highlighted an increase in homicides from 22 in '09 to 37 in '10.  While the piece provided a compelling visualization with the long-term count of homicides in Austin, it did not provide data that adjusted for the city's population growth.  In the chart below, I provide the number of homicides per 100,000 residents within the city's total area, as well as a 3-year trailing average.

Austin appears to have bottomed at around 2.8 homicides per 100k residents.  I wonder if the recent increase in rate volatility combined with the potential for a trailing average uptick in the near future is a result of more young men migrating into Austin, or perhaps a shift in the underlying community demographics towards a younger city.

Given the relatively high proportion of the City of Austin budget dedicated towards public safety, it seems feasible to ask for policymakers and APD to anticipate a demographic shift and begin putting programs (e.g. targeted after-school for boys with behavior issues at school) in place that can mitigate the effects of the shift.  A lot of our effectiveness in catching a potential wave will depend on the urgency placed on public safety risk management by the City Council.  I say 'risk management' because it's unclear if indeed there's a fundamental demographic transition that will make the days of 2.8/100k extremely difficult to repeat; however, the data should make us want to hedge against that possibility.  Hopefully, this chart gets the (some?) conversation started.

Here's my data file in XLSX format (AtxHomicideRate) .  Population numbers come from the City demographer's website.

*UPDATE

In response to the comments section, I've created a visualization of recent crime data from APD in the other leading violent categories:

I think this data reiterates the value of local government considering risk management and/or examining how optimally public safety resources are deployed.  The totals in these categories are indeed much larger and less likely to be distorted by randomness, so the slight but steady increases in aggravated assault and burglary should be noted.

Cross-posted at Keep Austin Wonky. Follow Julio on twitter: @juliogatx.

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Austin's democracy deficit hurts local median income


by: Julio Gonzalez Altamirano

Mon Jan 03, 2011 at 00:18 AM CST

( - promoted by Matt Glazer)

Wells Dunbar's tumblr post of demographic data from the City's African-American Quality of Life Initiative reminded me that there's a local democracy deficit concerning municipal policies that might help boost median income. I visualize the family median income data below.  As you can see, overall family median income growth is sluggish, and perhaps most troubling is the fact that Hispanic/Latino family median income actually declined since 2000.

A chart of family median income in Austin, TX


So, why aren't our local discourse and policies more aggressive on this front?

One part of the problem is the fragmentation of municipal-level public institutions that might be able to do something about it (AISD, ACC, City, County).  A second issue is that the current election design (at-large districts for City, lack of publicly-funded elections for all entities) makes it hard for more progressive political economy coalitions to form.  Third, there doesn't seem to be a lot of civic density/community organizing around boosting median incomes.  Therefore, it's not surprising that Austin doesn't seem to create a lot of value with its human capital.

As a result of the current recession, I think there is greater recognition that we need to refocus on the growth of middle class median income.  Many of the effective policies for boosting median wages such as quality K-12, affordable higher ed, effective workforce development, and community support for private sector union organizing campaigns are all local efforts.  Add these to transit, corporate subsidization, and land use...and all of a sudden local policymakers possess a pretty extensive toolkit to contribute to median income growth in their region.  The question is whether proponents of such activism can get organized to empower local policymakers that want to deploy such tools.

Cross-posted at Keep Austin Wonky.

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LegalZoom or LegalDoom?


by: Julio Gonzalez Altamirano

Sun Feb 14, 2010 at 07:12 PM CST

(I've asked Julio to post some of his work here on BOR as he's been writing some really excellent 'wonky' work on his blog. - promoted by Karl-Thomas Musselman)

The City Council is trying to decide whether or not to provide relocation incentives to LegalZoom, an online legal form provider.

Here are the deal details.  The City pays out $20,000 for ten years for a nominal total of $200,000.  The state's recruitment- and talent poaching-focused Texas Enterprise Fund would provide an additional $1,000,000.  Austin's population is only about 3% of the state's population, though it's likely that we produce more revenue per capita to state coffers than the average community, so let's say 7% of the state's money comes from Austinites.  That's a total of $270,000 nominal going to the folks at LegalZoom.

In exchange for Austin's $270k, LegalZoom agrees to provide jobs, make real estate improvements to its space, and use minority and women sub-contractors in the improvements.  At the onset, LegalZoom agrees to bring in 50 jobs, augmenting the number to a total of 600 jobs by 2016.  To put these numbers in context, Austin's proposed budget for FY 2010 is $2.75 billion.  Austin has about half a million working age adults (over 18 under 65).  So, either way, this deal is neither a substantial public expense nor a significant contributor to employment.  The City's analysts estimate a net benefit to the City's revenues of $563,000, and LegalZoom indicates that about 540 of the 600 jobs will be local new hires.

Is this a good deal?

In the chart below, I calculate the expected nominal dollar benefits to City revenues under different flight probabilities by LegalZoom if no incentive package is offered.  While the media coverage seems to convey a sense of 100% flight probability if the incentives are nixed, that is unlikely to be the case.

The return on revenues for the City are decent in the event that LegalZoom is likely to skip Austin without incentives, but if that is not the case than this investment looks less compelling as a revenue generator.  This is especially the case if there is a good chance of LegalZoom relocating regardless of incentives, and particularly so because Austin has many ways of generating revenue through enforcement of fines, efficiency initiatives, or just plain old increases of fees and taxes.  From this analysis it does not appear that the revenue generation is a compelling factor in this deal.

The job creation however, does seem much more compelling.  While LegalZoom indicated their net total job creation in the public hearing process, I could not find an estimate of the expected duration of those jobs in years.  This is needed to calculate the subsidy cost per job year.  Let's assume that each job will last an average of 5 years.  Thus, even if there is only a 5% chance of flight, the expected jobs created by the deal would be 27 for a total of 135 job years.  Even under that conservative scenario, Austin public monies would be buying  a job year for $2,000.  Simply put, even if LegalZoom was very likely to show up without the incentives, buying the certainty of the jobs is pretty cheap and the most compelling piece of the deal.

As a one shot deal the LegalZoom job creation commitment makes the incentives pretty compelling for an Austin taxpayer, but as a long-term strategy, there are some potentially troubling issues that should be addressed.

For starters, it's unclear why exactly LegalZoom is seeking these incentives or why the Austin policymakers think this might be a sector worth subsidizing.  As Wells Dunbar implies, LegalZoom's proposal might be opportunistic wrangling, as opposed to a make-or-break incentive mix.  With the Hanger Orthopedic incentives, it was clearly an investment in creating a cluster around one of our desired growth areas (medical) where Austin is not yet a dominant leader.  Dunbar goes on to hypothesize that we are probably offering incentives because some other town is also in the mix, invoking a collective-action dilemma.  Further, the focus on funding relocation probably seems random and unfair to existing Austin companies that might believe they could transform local subsidies into additional job years more efficiently than relocating firms.

To remedy these issues the Council could look into creating an even more structured incentives process that focuses exclusively on key strategic areas like medical technology and life sciences and that uses a market-based bidding mechanism to reward efficient job year creation regardless of the geographic origins of the company.

Originally posted at Keep Austin Wonky.

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