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April 15th, 2014:

Another trip down Demography Lane

From the Sunday Chron op-ed pages:

Texas is headed for the ditch, but few people are aware of the state’s perilous path. The demographers have seen the future, though, because it’s foretold in their numbers. And they’ve been sounding the alarm.

There hasn’t been much of a public-policy response, so far.

Texas could be the pacesetter: It has a young and rapidly growing population. Educate that workforce and Texas becomes a vibrant, thriving state for decades. Unfortunately, that young population is overwhelmingly minority and under-educated, and there appears to be little political interest in addressing the needs of that demographic group.

Increasingly, Texas stands to become poorer and less competitive, according to demographers who study the numbers for a living. Neither state leaders nor the media is paying adequate attention. Few Texans are aware of the state’s rapidly changing population. Hispanics will surpass whites as the largest population group some time before 2020.

By the numbers, here’s what’s been taking place: The state lost 184,486 white children between 2000 and 2010 while gaining 931,012 Hispanic children over that decade, according to the U.S. Census. Stated another way, in 2000, Texas white kids outnumbered Hispanic children by 120,382; Flash forward to 2010 and Hispanic children outnumbered white kids by 995,116.

This gap will continue to widen. Demographer Steve Murdock notes the average white female is 42 years old compared to an average age of 28 for Latinas. And the fertility rate is 1.9 children for the white female compared to 2.7 for the Latina. Demographers say replacement of a population group requires a fertility rate of at least 2.1.

Whites are projected to make up fewer than 4 percent of the state’s population growth between now and 2040, compared to 78 percent for Texas Hispanics.

Here’s the most important figure: All of our K-12 enrollment growth over the past decade comes from low-income children – that is, children whose family income qualifies them for free and reduced-cost school lunches. Those low-income students now make up a little more than 60 percent of our public school enrollment.

Many are way behind when they arrive in the first grade. Too many drop out years later. A whopping 47 percent of low-income high school students from the Class of 2015 were off track to graduate, according to testimony in last year’s public school finance trial.

Why does this matter? Murdock, who served as director of the U.S Census Bureau in the administration of President George W. Bush, projects that three out of 10 Texas workers will not have a high school diploma by 2040. Also, in 25 years, the average Texas household income will be some $6,500 less than it was in the year 2000. The figure is not inflation-adjusted, so it will be worse than it sounds. Basically, today’s children, collectively, stand to be worse off than preceding generations.

How can we address the trend line? The first step is to increase access to high-quality pre-K, Murdock says.

[…]

The demographers are warning us about the not so-rosy future if we fail to act. Education is the answer. Education is the best ticket out of poverty. We simply need state leaders to understand a universal truth: It doesn’t cost to educate a child; it pays to educate a child.

This is a condensed version of a longer piece by former Chron and Express-News reporter Gary Scharrer, which first appeared on Texas To The World. Scharrer was more recently on the staff of now-former Sen. Tommy Williams. Steve Murdock is a familiar name in this blog – he’s been singing this tune for well over a decade now, not that the powers that be have been listening. Here’s an interview I did with him in 2011, just as the Legislature was getting set to cut $5.4 billion from public education and $200 million from pre-k, because they suck like that. As we know, these issues are salient in the election for Governor this fall. You tell me whose pre-k plan, not to mention whose overall vision for education, is a better fit for our future.

Perry lawyers up

It’s getting real.

Rosemary Lehmberg

Texas Gov. Rick Perry has hired a high-profile Austin defense lawyer to represent him in an investigation into whether he illegally withheld money from the Travis County District Attorney’s office.

KVUE News and the Austin American-Statesman confirmed Sunday evening the hiring of David L. Botsford.

The hiring comes as a special Travis County grand jury is set to be seated Monday to hear evidence into whether Perry broke state laws concerning bribery, coercion and abuse of authority.

[…]

Botsford said Sunday night, “The matter at hand pertains to the power of the governor to issue vetoes as allowed under the Texas Constitution. I have been retained to ensure that (the special prosecutor) receives all the facts, which will show that the governor’s veto was carried out in both the spirit and the letter of the law.”

See here, here, and here for the background. Attorney Botsford must be good at what he does, because he’s already obfuscating the facts. The issue, as I’ve said repeatedly, is not that Perry vetoed the funds but that he threatened to veto them unless Travis County DA Rosemary Lehmberg resigned. Trying to force out another elected official in this manner is the no-no. Had Perry simply vetoed the funds without yapping about it beforehand, there would be no allegation of wrongdoing. I can’t wait to see what the grand jury, which has been seated, makes of this. Jason Stanford and Juanita have more.

Regulating Bitcoin in Texas

Bitcoin regulations. We have ’em.

Texas will not treat Bitcoin and other virtual currencies as legal money, according to a new memo from the Texas Department of Banking. Yet some companies that deal in Bitcoin transactions could draw state oversight, even if they are based outside of Texas.

Texas Banking Commissioner Charles Cooper issued a memo this month outlining the agency’s policies involving virtual currencies like Bitcoin.

“At this point a cryptocurrency like Bitcoin is best viewed like a speculative investment, not as money,” Cooper said in a statement.

In his memo, Cooper provided reasoning that echoed the IRS. Last month, the federal agency announced that, for tax purposes, it would treat Bitcoin as property instead of currency because no government recognizes the virtual currency as legal tender.

“Because neither centralized virtual currencies nor cryptocurrencies are coin and paper money issued by the government of a country, they cannot be considered currencies under the statute,” Cooper’s memo reads.

While Texas does not have a state income tax, the state’s Department of Banking does regulate certain financial transactions and license financial institutions. An exchange of Bitcoin for U.S. dollars between two parties would not draw the agency’s interest, according to the memo.

But some third-party Bitcoin exchanges are already drawing state scrutiny because of the way they handle transactions involving U.S. currency and Bitcoin, according to Daniel Wood, assistant general counsel at the Department of Banking. Cooper’s memo states that such exchanges are involved in “money transmission” because they act as an “escrow-like intermediary” that holds onto a buyer’s funds “until it determines that the terms of the sale have been satisfied before remitting the funds to the seller.”

Such exchanges do not need to be based in Texas to fall under the state’s regulations, Wood said. “If they do business with Texas consumers, we can force them to get a Texas license,” he added.

I’ll admit, I had no idea there was a Texas Department of Banking. I don’t know what effect this will have, but I suppose it’s good to be one of the pioneers in setting this sort of regulatory framework. I personally think that Bitcoin is more toy than currency, though I could see it maybe being useful for campaign contributions. Assuming all disclosure and other requirements are met, of course. What do you think about this?

The downtown lifestyle

Demand for residences in downtown Houston is up.

For Krishnan Iyer, moving downtown meant a lot of things: Not having to use his car in auto-dependent Houston, being able to walk to work, to restaurants, to the movies.

The 34-year-old consultant left The Woodlands two years ago for a one-bedroom apartment in the Post Rice Lofts at Main and Texas and hasn’t looked back. Iyer expects many others to follow him in the coming years.

“I think for sure the rising oil prices will have an effect on people moving inward to a place near where they work, and there is a trend of renting among younger people rather than buying,” Iyer said. “There’s going to be demand to live here. It’s not going down.”

With people like Iyer in mind, developers are proposing six residential projects for downtown Houston that could add more than 2,200 new apartments to the urban core, fueled by a $15,000-per-unit city subsidy program that officials now want to expand.

Most of this story is about whether Council should expand an incentive program for developers that build downtown. I’ve no strong opinions about that, I’m more interested in the attitude expressed above. As we know, there are many job centers in the greater Houston area, but it seems to me that downtown is one of only a couple where you could reasonably live and walk to your job. You could probably do that if you lived and worked in the Rice/Medical Center area, and maybe in Greenway Plaza or the Galleria. I can’t imagine doing it in the Energy Corridor or Greenspoint, or in a suburban location like The Woodlands. That’s a niche market, but one that downtown is very well positioned to serve.

More broadly, if one really wants to avoid traffic, one has to be in a position to stay off the roads. That means walking, bicycling (on trails and side roads if possible), and taking the light rail, with buses as the next best thing and carpools or vanpools another step down. You can reduce your exposure to traffic by having a shorter commute or by taking HOV lanes, but you can’t avoid it. Something I keep coming back to in this space is that while we’ve done a lot to make it easier to travel by highway, with more of that to come once TxDOT reveals its master plan for I-45 inside the Beltway, we’ve not done nearly as much for those who aren’t on the highway, which includes all those extra highway drivers once they reach their destinations. This is why I remain skeptical of the grandiose plans to transform I-45 in and around downtown or to build dedicated connectors to the Medical Center from 288. You can increase the capacity all you want on the highways, but the streets and especially the parking lots where all these people will be going aren’t getting any bigger or faster.

The inescapable truth is that we can’t solve traffic problems by adding highway capacity. All that extra capacity winds up generating bigger problems elsewhere. Widening I-10 west of the Loop has caused traffic on I-10 inside the Loop to become a mess, and that mess extends to the surface roads that access I-10, as anyone who remembers what Studemont and Yale and Shepherd were like pre-widening can attest. Ultimately, we are going to have to put more effort and resources into options that get people out of their cars, at least some of the time. That means more transit, more walking and biking, and more affordable housing close to or right in employment centers. That brings us back to the more transit and walking and biking options, because density without those things is just more cars on streets whose capacity can’t be – and shouldn’t be – increased. Downtown has all of that already, which is why it’s so attractive for people who don’t care about having their own plot of land. Near downtown – Midtown, EaDo, Heights, Montrose, and eventually Fifth Ward – has these things in varying amounts, but is struggling to keep up with demand for housing and the strain on infrastructure. Neighborhoods farther out also have these things to varying degrees, at least until you start getting into master-planned-with-cul-de-sacs territory. I don’t think I’m stretching to suggest that the less walkable a place is, the less amenable it will be to transit as well. Places like that are going to have a lot more trouble with traffic going forward because they just don’t have as many alternatives.

And that brings us back where we started. Council did approve the tax break to encourage more downtown residential construction, and I expect that it won’t be long before we start seeing more projects on the drawing board. In the meantime, more and more people will just have to learn to cope with traffic.