T E X A S A & M U N I V E R S I T Y - K I N G S V I L L EC O L L E G E O F B U S I N E S S A D M I N I S T R A T I O N
forumA Comparison of Economic Conditions in Three Counties with Similar TAMUS Student Populations:Kleberg County, Randall County and Waller County
by Dr. Thomas M. Krueger
Judy Hawley– Commissioner and Chair, Port of Corpus Christi
The Energy Renaissance and South Texas
Judy Hawley served eight years in the Texas House of Representatives. She was the Executive Director of the San Patricio Economic Development Corporation prior to joining a small technology company as the Texas business development lead.
Hawley’s recent community affiliations include serving as chair of the Corpus Christi Regional Economic Development Corporation, chair of the Texas State Aquarium Board and co-chair of the Chamber Infrastructure Committee. Hawley chairs the
State I-69 Corridor Advisory Board and serves on numerous other statewide transportation boards including the Texas Transportation Institute Advisory Committee, the Alliance for I-69 and the Border Trade Advisory Committee. She has been a Commissioner for the Port of Corpus Christi Authority for nearly 12 years, serving as chair for the last two.
Dr. Thomas Krueger– J.R. Manning Endowed Professor of Innovation in Business Education
Texas A&M University-Kingsville College of Business Administration
Thomas Krueger is the J.R. Manning Endowed Professor of Innovation in Business Education at Texas A&M-Kingsville. He holds a B.S. from the University of Wiscon-sin-Eau Claire, MBA from Minnesota State University and DBA in Finance from the
University of Kentucky. Before joining Texas A&M-Kingsville, he taught finance at the University of North Carolina at Charlotte (1986-1989) and the University of Wisconsin-La Crosse (1989-2010). While at UW-La Crosse, he was chair of the Finance Department (1993-1999) and Internship Coordinator of the East Central European Scholarship Program. Since joining Texas A&M-Kingsville in 2011, Dr. Krueger has taught a variety of undergraduate and gradu-ate courses. Some of the classes taught over the past year are Business Finance, Financial Planning and Capital Budgeting, Financial Ranch Management and Global Finance. In October, Dr. Krueger hosted a personal finance seminar series for King Ranch employees.
Dr. Krueger has authored over 87 refereed journal articles and has been cited 568 times in other articles. Google-Scholar reported that his H-statistic is 11, which means that at least 11 authored articles have been cited 11 or more times. Perhaps his most widely-read article, titled, “Super Bowl Stock Market Predictor,” was published in the top-tier Journal of Finance. Other research has resulted in winning three “Best in Track” Awards and one “Distin-guished Research” Award at national finance meetings, as well as been chosen for the 2015 “Teaching Excellence Award,” an acknowledgement as the best instructor in the finance discipline by the Academy of Finance, an international association of Finance Professionals. In 2014 and 2015, Dr. Krueger and Dr. Bartelt were recipients of the CBA’s Distinguished Research of the Year awards.
ThePresenters
A Comparison of Economic Conditions in Three Counties with Similar TAMUS Student Populations:Kleberg County, Randall County and Waller County
Welcome
Tuesday, November 3, 2015, 11:30 a.m. - 1 p.m.Memorial Student Union Building • Ballrooms A&B
Sponsored by Kleberg Bank
Luncheon &
The College of Business Administration is proud to bring the university and business community togeth-
er for our annual Economic Forum. This is the fifth time we have presented this event in an effort to raise
awareness of the area’s key factors affecting economic growth and prosperity. We hope that you will
find our program informative and enjoyable and will return to attend our future forums.
Welcome and Introductions by Dr. Thomas Krueger, DBA
J.R. Manning Endowed Professor of Innovation in Business Education, Texas A&M-Kingsville
College of Business Administration............................................................................ 11:50 a.m. - 11:55 a.m.
Welcome from Mr. Joe Henkel, President and CEO, Kleberg Bank......................... 11:55 a.m. - 12:00 p.m.
“ The Energy Renaissance and South Texas”
by Judy Hawley, Commissioner and Chair, Port of Corpus Christi .............................. 12:05 - 12:35 p.m.
“A Comparison of Economic Conditions in Three Counties with Similar TAMUS Student Populations:
Kleberg County, Randall County and Waller County”
by Dr. Thomas Krueger, Professor, Texas A&M-Kingsville ........................................... 12:35 - 12:50 p.m.
Question & Answer Session ............................................................................................... 12:50 - 12:55 p.m.
Concluding Remarks by Dr. Krueger.................................................................................... 12:55 - 1:00 p.m.
forum
Statement ofPurposeThe 2015 Economic Forum booklet provides comprehensive documentation concerning regional econom-ic indicators for Kleberg County, Texas. The research is part of ongoing analysis provided by Texas A&M University-Kingsville’s College of Business Administration. Part I presents a broad range of demographic data, including education and poverty levels. Part II presents revenue arising from employment condi-tions, while Part III focuses on expenditures. Part IV presents opinions of local business managers, citizens and students regarding key economic factors, including anticipated standards of living. The report builds on the base of economic information first provided in 2012 and is expected to annually expand our understanding of Kleberg County and thereby give decision-makers a valuable tool for strate-gic planning.
Kleberg Bank, under the direction of Mr. Joe Henkel, sponsors this research in collaboration with Texas A&M-Kingsville’s College of Business Administration, which is led by Dean Natalya Delcoure. I want to thank the College of Business Administration’s Mary Alice Wiechman for her assistance in putting this report in its final form as well as the PowerPoint presentation, while Harmeet Singh, lecturer in the College of Business Administration, and Julie Navejar, communications specialist in the Office of Market-ing and Communications, served as the proofreaders.
Specific goals of the project include: • Assist business owners by supplying key indicators of local economic vitality. • Identify trends in order to put the current economic condition in perspective. • Contrast Kleberg County to other relevant regions in order to enhance our understanding. • Develop specific economic measures that are not readily available. • Act as a storehouse of these economic fundamental and trend insights. • Develop and refine tools to assess Kleberg County’s economic condition. • Bring academic, business and government professionals together for discussion about the local economy and related critical issues. • Create a business recruitment and retention tool by publishing this information.
The 2015 ForumIn 2012, the College of Business Administration hosted its first Economic Forum. Across the years, Kleberg County’s economic condition has been studied in reference to adjacent counties (Spring 2012), data across a 40-year time span (Spring 2013), and counties with similar populations (Spring 2014) and the impact of the Eagle Ford Shale formation (Fall 2014).
One cannot provide an accurate description of Kleberg County’s economic condition without reference to Corpus Christi. The Port of Corpus Christi is key to the economic vitality of the region. Building on last year’s presentation by Port Commissioner Barbara Canales, J.D., we are fortunate to have Ms. Judy Hawley, Corpus Christi Port Commissioner and Chair, to share her perception of the Energy Renaissance in South Texas.
Figure 1. Comparison of Select Texas A&M University System Universities with Similar Enrollment Figure 2. County Population and Land Area Figure 3. County Ethnicity Figure 4. Primary Language and Educational Attainment Figure 5. Current Poverty Levels
Figure 6. Average Compensation per Job Figure 7. Distribution of Population across Income Levels Figure 8. Most Common Occupations Figure 9. Recent Job Growth and Job Growth Prospects Figure 10. Unemployment Rates
Figure 11. Cost of Living Figure 12. Housing Costs Figure 13. Building Permits Figure 14. Property Taxes Figure 15. Educational Expenditures
Figure 16. Percent of Sample Expecting Improvement in U.S. Economy during the Next Year Figure 17. Percent of Sample Expecting Improvement in Local Economy during the Next Year Figure 18. Percent of Sample Expecting Improvement in Personal Financial Condition during the Next Year Figure 19. Percent of Sample Perceiving Local Community Is Supportive of Business Figure 20. Percent of Sample Perceiving Local Government Is Supportive of Business Figure 21. Percent of Sample Perceiving Texas A&M-Kingsville Is Supportive of Business Figure 22. Top Economic Concerns Figure 23. Preferred Government Allocation of $100 in Additional Revenue
ofTable CONTENTS
Part I. Key Demographic Aspects
Introduction
Part IV. Economic Survey
Part II. Employment Conditions
Part III. Monetary Expenditures
Across the state of Texas, 17 out of every 100 students are in college. In Kleberg County, 34 out of every 100 students are in college. This additional activity is likely to have a significant impact on the economic well-being of our county. Consequently, this year’s analysis compares the financial health of three counties with universities from The Texas A&M University System. The A&M System institution with the next smaller size, Prairie View A&M University (PVAMU), and next larger size, West Texas A&M Universi-ty (WTAMU), relative to the 2014 enrollment at Texas A&M University-Kingsville, were identified leading to the choice of Randall and Waller Counties for analysis. Demographic, income and expenditure data for these three counties are presented along with information regarding the results of a survey regard-ing Kleberg County resident views regarding the economy. Some information about these universities is given below and dicussed in Part I.
*Prairie View A&M separates its local economic impact into Waller County and Houston metropolis components, significantly reducing the reported value of Prairie View A&M’s impact on the local economy.
Sources: Panel A. Year and students from Texas A&M University (http://www.tamus.edu/about/); Budget from Executive Budget Summary for Year ending August 31, 2014, Texas A&M University; Tuition, 6-year graduation rate, and class size data from U.S. News & World Report.
Panel B: Demonstrating the Economic Value of Texas A&M-Kingsville (February 2015) and Demonstrating the Economic Value of West Texas A&M (February 2015) both by Economic Modeling Specialist (Moscow, Idaho); and The Economic Impact of Prairie View A&M University by M. Quddus, L Langley, M. Williams, R. Quazi, and L. McNeil, reported at http://www.pvamu.edu/in-clude/Reports_Library/pv-economic-impact.pdf.
Figure 1: Comparison of Select Texas A&M University System Universities with Similar Enrollment
CountyUniversity
University
Classes with 1-20Students
6-yearGraduation
Rates
2014Budget
(millions)
In-stateTuition
and Fees
2014Students
TotalBenefit
FormerStudents
Operations Research Students Visitors
Panel B. Annual Economic Impact (all values in millions)
Panel A. Basic Demograhics
Texas A&M-Kingsville Kleberg 8728 $7,434 $142.7 36% 41%
Prairie View A&M Waller 8343 $9,460 $183.9 43% 29%
West Texas A&M Randall 8970 $6,264 $120.7 36% 22%
Texas A&M-Kingsville $491.9 $91.5 $13.3 $25.6 $1.0 $360.5
Prairie View A&M* $276.4 $138.2 $1.6 $30.2 $7.4 $99.0
West Texas A&M $432.2 $83.9 $4.1 $5.8 $0.7 $337.7
Introduction
Comparison of Three Schools in The Texas A&M University System Used in County SelectionOne cannot get too far into a description of Kleberg County before mentioning that it is the location of Texas A&M-Kingsville, which has received a lot of notoriety over the years. In March of this year, Washing-ton Monthly magazine identified Texas A&M-Kingsville as one of the top 40 southern schools in its “Best Bang for the Buck” listing. PVAMU and two other Texas A&M institutions also were in the Top 40. This is just one of A&M-Kingsville’s many accolades helping it become the fastest growing doctoral-granting institution in the nation by one measure.
Part I. Key Demographic Aspects
The top portion of Figure 1 provides some information about A&M-Kingsville and the two Texas A&M University System members with the most similar student enrollment in 2014. As reported in the third column of Figure 1, A&M-Kingsville’s 8,728 students are 385 more than Waller County’s PVAMU and 242 less than Randall County’s WTAMU. At the time of this writing, the 2015 fall semester totals were unavail-able, but early indications suggested that there was a surge in A&M-Kingsville’s enrollment to more than 9,200 students. For those unfamiliar with their relative location, WTAMU is 22 miles south of Amarillo. PVAMU is 47 miles northwest of Houston. Meanwhile, A&M-Kingsville students have to drive 45 miles northeast to reach Corpus Christi. Hence, all schools have a large city nearby. These students face a wide range of in-state tuition charges and fees. U.S. News & World Report’s evaluation of in-state tuition and fees pegs A&M-Kingsville’s cost at $7,434/year. PVAMU charges are 27 percent more, while WTAMU’s tuition and fees are 16 percent less.
Two popular gauges of university quality prominently reported by U.S. News & World Report are the six-year graduation rate and class size. As shown in the right two columns of Figure 1’s Panel A, 36 percent of A&M-Kingsville freshmen graduate in six years. The six-year graduation rate is the same at WTAMU, with a higher percentage of PVAMU’s freshmen earning their degrees in six years. A&M-Kingsville’s class size metric is much better than that of the other two universities, with 41 out of every 100 classes having fewer than 21 students.
While institutions of higher education are principally viewed as organizations that enhance the lives of students, they also can have a profound impact on the local area. The impetus for this year’s benchmark-ing of Kleberg County is this year’s study of the economic impact of all public and private institutions of higher education. The economic analysis was conducted by Economic Modeling Specialists Intl. (EMSI) of Moscow, Idaho, which is home to the University of Idaho.
EMSI information about the economic impact of A&M-Kingsville and WTAMU are given in the first and last line of Figure 1’s Panel B. PVAMU’s College of Business has conducted its own analysis of institutional impact, which is used in PVAMU’s reporting. Their analysis separates out PVAMU’s impact on the economy of Harris County (i.e., Houston), enhancing the apparent value of PVAMU. Unfortunately, reporting of this nature understates the impact of PVAMU in Waller County. As a consequence, the values in Panel B’s PVAMU row understate its local impact.
As shown in the first column of Panel B, A&M-Kingsville’s annual economic benefit to the region is almost half of a billion dollars. Its $491.9 million impact is greater than that of WTAMU and the underreported PVAMU. According to EMSI, A&M-Kingsville’s presence adds 8,844 jobs directly and indirectly to the local economy. In terms of operations, PVAMU has the largest impact at $138.2 million. According to EMSI, A&M-Kingsville’s direct expenditure on faculty and goods and services adds $91.5 million to the local economy and is responsible for 2,147 jobs.
A&M-Kingsville leads its peers in terms of research spending, given in the third column of Panel B. Accord-ing to EMSI, the $13.3 million is responsible for 334 jobs. Student spending adds $25.6 million, while visitors add another $1.0 million to the local economy, resulting in an additional 457 and 25 jobs, respectively, according to EMSI. Finally, A&M-Kingsville graduates add $360.5 million in value to the local economy
annually through the application of their education within their profession, which adds 5,881 jobs. Although WTAMU’s alumni add only $337.7 million, or nine percent less than that of A&M-Kingsville, its enrollment also is three percent lower. There is a large shifting of population towards Houston upon graduation, resulting in PVAMU’s impact on Waller County being only about a fourth of that located in Kleberg County.
While institutions of higher education are principally viewed as organizations that enhance the lives of students, they also can have a profound impact on the local area. The impetus for this year’s benchmark-ing of Kleberg County is this year’s study of the economic impact of all public and private institutions of higher education. The economic analysis was conducted by Economic Modeling Specialists Intl. (EMSI) of Moscow, Idaho, which is home to the University of Idaho.
EMSI information about the economic impact of A&M-Kingsville and WTAMU are given in the first and last line of Figure 1’s Panel B. PVAMU’s College of Business has conducted its own analysis of institutional impact, which is used in PVAMU’s reporting. Their analysis separates out PVAMU’s impact on the economy of Harris County (i.e., Houston), enhancing the apparent value of PVAMU. Unfortunately, reporting of this nature understates the impact of PVAMU in Waller County. As a consequence, the values in Panel B’s PVAMU row understate its local impact.
As shown in the first column of Panel B, A&M-Kingsville’s annual economic benefit to the region is almost half of a billion dollars. Its $491.9 million impact is greater than that of WTAMU and the underreported PVAMU. According to EMSI, A&M-Kingsville’s presence adds 8,844 jobs directly and indirectly to the local economy. In terms of operations, PVAMU has the largest impact at $138.2 million. According to EMSI, A&M-Kingsville’s direct expenditure on faculty and goods and services adds $91.5 million to the local economy and is responsible for 2,147 jobs.
A&M-Kingsville leads its peers in terms of research spending, given in the third column of Panel B. Accord-ing to EMSI, the $13.3 million is responsible for 334 jobs. Student spending adds $25.6 million, while visitors add another $1.0 million to the local economy, resulting in an additional 457 and 25 jobs, respectively, according to EMSI. Finally, A&M-Kingsville graduates add $360.5 million in value to the local economy
Figure 2a: County Population
140,000120,000100,00080,00060,00040,00020,000
2010
31,549 32,149 26,213
13,303
5,770
104,312 128,220
43,237 46,820
2014 County Seat0
Kleberg
Randall
Waller
Source: U.S. Bureau of Census
Figure 2b: County Land Area in Square Miles
1,000900800700600500400300200100
0Kleberg
Square Miles 881 912 513
Randall Waller
Source: U.S. Bureau of Census
annually through the application of their education within their profession, which adds 5,881 jobs. Although WTAMU’s alumni add only $337.7 million, or nine percent less than that of A&M-Kingsville, its enrollment also is three percent lower. There is a large shifting of population towards Houston upon graduation, resulting in PVAMU’s impact on Waller County being only about a fourth of that located in Kleberg County.
Figure 3: 2013 County Ethnicity
The remainder of the 2015 Economic Forum report takes a closer look at these three counties. After a comparison of demographics, there is an analysis of economic conditions including the cost of living in the three counties. A lower cost of living is often cited as a benefit of living here. In the final section of this year’s report is an updated survey of Kleberg County resident perceptions regarding economic conditions.
County Population and EthnicityThe population of Randall County dwarfs the other two counties, as shown in Figures 2a and 2b on the previous page. In 2014, Randall County had four times as many residents as Kleberg County and 2.7 as many residents as Waller County. Over the preceding four years, population grew by 22.9 percent in Randall County, 8.3 percent in Waller County and 1.9 percent in Kleberg County. Nonetheless, when it comes to population concentration, a much higher percentage of Kleberg County residents live in Kings-ville. The other counties tend to have residents in communities which are not the county seat on the side closest to the nearby large city. The presences of King Ranch and other land-holding operations have concentrated 82 percent of Kleberg County’s residents in the 12-square mile city of Kingsville.
The difference in population is only partially attributable to county size. Randall County’s 912 square miles is 31 more than Kleberg County and 399 more than Waller County. Hence, Kleberg County is the most rural, with only 36 residents per square mile. Randall County has 141 residents per square mile. Approxi-mately midway in between, Waller County has 91 residents per square mile.
As shown in Figure 3, there is a significant difference in the heritage of these three counties. Kleberg County is largely Hispanic, Randall County is largely white, and Waller County has an above average black population. Waller County is most similar to the Texas distribution of the three primary races, while Randall County is closest to the distribution of races found in the United States overall.
80%
Hispanic
71.4%
18.7%
17.1% 62.6%
29.5%
38.4% 44.0%
43.6% 24.9%
12.4%
13.2%
5.2%
7.1%
2.0%
75.3% 2.6%
21.9% 3.6%
3.4%
3.1%
White Black Other
Kleberg
Randall
Waller
Texas
United States
70%60%50%40%30%20%10%
0%
Source: U.S. Bureau of Census
Language, Education and PovertyAs shown in the first set of bars in Figure 4, none of the counties in this year’s study have the in-migration found in Texas overall. One out of every 13 Kleberg County residents was born outside the United States. A lesser one out of every eight Waller County residents was born abroad, while the proportion in Randall County is only one in 23 residents.
As in past years, Kleberg County is the most bilingual county. As illustrated by the blue bar in Table 4’s second cluster, almost half of its population speaks another language at home, presumably Spanish. A language other than English is spoken at over one third of all homes in Texas. At the other extreme, English is not the first language spoken at only one in nine homes in Randall County.
High school graduation rates vary dramatically across the counties being studied. Out of every 1,000 residents above the age of 24, only 741 have graduated from high school in Kleberg County. At the other extreme, 911 have graduated in Randall County. In Waller and Texas overall, about 810 out of 1,000 residents above the age of 24 have a high school certificate.
Figure 4: 2013 Primary Language and Educational Attainment
Source: U.S. Bureau of Census
80%
70%
60%50%
40%
30%
20%
10%
0%
7.4% 74.1%
91.1%80.9%80.8%
23.6%
30.2%
19.0%26.3%
4.4%12.9%
10.8%23.7%
34.7%
49.5%
16.3%
Foreign BornPerson
High SchoolGraduate
CollegeGraduate
ForeignLanguage
Spoken in Home
90%
100%
Kleberg
Randall
Waller
Texas
Persons 25+
Educational attainment appears to be one of the factors driving poverty statistics, which are displayed in Figure 5. Randall County, which has the highest high school and college graduation rates, also has the lowest level of poverty. Over twice as many Kleberg County children (i.e., 29.9 percent) live in poverty as in Randall County, where the childhood poverty rate is only 14.2 percent. Waller County childhood poverty statistics are closest to the poverty statistics for the entire state.
30%
23.9%
Residents in PovertyPer
cent
age
of S
peci
fied
Pop
ulat
ion
Children in Poverty
26.4%
25.0%
29.9%
11.0% 14.2%
19.4%
17.4%
20%
25%
15%
10%
5%
0%
Kleberg
Randall
Waller
Texas
Figure 5: Current Poverty Levels
Source: U.S. Bureau of Census
The next two sections compare income and the cost of living in Kleberg, Randall and Waller Counties. In 2013, the average compensation per job in Kleberg County was $35,449, as depicted by the blue bar on the right of Figure 6. From 2009 to 2013, the blue bars rise by $2,501. Stated another way, Kleberg County’s annualized rate of growth was 1.85 percent during the four years. During the same period, the inflation rate, as measured by the Consumer Price Index (CPI), was 2.18 percent. An item costing $100 in 2009 would cost $109 in 2013. Employing the numbers reported in Figure 6, for every $100 in income at the end of 2009, Kleberg County residents had $107.61 in additional income in 2013. Per $100 of income in 2009, they had $1.39 less in purchasing power in 2013.
Part II. Employment Conditions
Compensation
Perhaps a more surprising statistic in Figure 4 is the percentage of residents who are not college graduates. In light of these counties hosting a Texas A&M University System institution, only Randall County exceeds the state of Texas average of 26.3 percent having a college degree. Out of every 1,000 residents in Kleberg County, 236 have a college degree. One reason Kleberg County may lag the statewide average is that several A&M-Kingsville professors reside in Corpus Christi.
Residents in Randall County fared better on both a dollar and growth rate basis. Over the four years, average compensation per job grew 5.43 percent, to $38,695, as illustrated by the red bars in Figure 6. While the CPI changed by $9 per $100, Randall County income rose $23.54 per $100. The highest income per job is earned in Waller County, with $42,848 being posted in the bottom row of Figure 6. However, the growth rate over the 2009-2013 period was closer to Kleberg County’s growth rate at 2.48 percent.
Average job remuneration values do not provide any insight to the actual distribution of incomes, exclude the income arising from having more than one job and does not consider investment income. These limita-tions are addressed by Figure 7, which sheds light on the distribution of the population across total income levels. The vertical axis reports the percentage of county income that is in the income range is identified on the horizontal axis. Ideally, one would like to have a fairly level (if not increasing) curve, suggesting that there is not a large drop-off in the percentage of the population represented as income rises.
Unfortunately, this is not the case for Kleberg County, where 26.2 percent of its 11,600 working residents earn less than $20,000. For comparison purposes, the 2014 poverty level for a family of four was $23,850. Even after including the impact of multiple jobs and investment income, the first two income brackets (leading up to $39,999) describe the financial situation for 48.8 percent of Kleberg County residents. By comparison, 33.0 percent and 40.8 percent of residents have total income below $40,000 in Randall County and Waller County, respectively.
Pew Research defines “middle class” as those earning between 67 percent and 200 percent of the state’s median income. The median income in Texas during 2014 was $51,704. Hence the “middle class” would be those with an income between $34,651 and $103,408. For our purposes here, given the income brackets provided by the U.S. Census Bureau, the income range from $40,000 to $99,999 is being viewed as that earned by the “middle class”. In these three brackets we find 38.0 percent (i.e., 14.5%, 13.7% and 9.8%) of Kleberg County’s population. A higher 42.9 percent of Randall County’s residents would be considered to be part of the “middle class.” At 39.1 percent of the total, the proportion of Waller County’s population in the middle class is similar to that of Kleberg County.
Figure 6: Average Compensation per Job
45,00040,00035,000
25,000
15,000
5,000
2009 20130
10,000
20,000
30,000
32,948
31,321
38,845
35,449
38,695
42,848
Kleberg
Randall
Waller
Source: U.S. Bureau of Census
Source: U.S. Bureau of Census
26.2% 22.6%
17.7% 17.6%
16.6%
13.7% 9.8%
11.3%
7.4% 7.2%
5.7%
5.7% 5.2% 3.1%
3.1%
3.7% 2.3% 1.4% 0.1%
0.2%
0.3%
9.9%
4.9% 4.6%
14.0%
15.1%
14.5%
21.6%
15.3%
19.2%
Kleberg 11,600
Randall 52,019
Waller 14,716
0-
$19,999
$20,00-
$39,999
$40,00-
$59,000
$60,000-
$79,999
$80,000-
$99,999
$100,000-
$124,999
$125,000-
$149,000
$150,000-
$199,999
$200,000-
$499,000 $500,000+
Figure 7: Distribution of Population across Income Levels
At the “high income” extreme, 13.2 percent, or one in eight, of Kleberg County working residents earn over $100,000. Almost one in four (e.g., 24.1 percent) of Randall County’s 52,019 working residents earn over $100,000. One in five (e.g., 20.1 percent) of Waller County’s 14,716 working residents earns more than $100,000.
One reason for the low income may be the concentration of Kleberg County residents in low-paying occupa-tions. Figure 8 reports the most common occupations where at least seven percent of the population of any one political jurisdiction is engaged in the listed activities. Each county has its own occupation-related characteristics. Kleberg County has the highest percentages in two columns, the education (third column), which is discussed further in the following paragraph, and the low-paying food preparation industry (fifth column). Randall County has the highest percentage in the sales, office and administrative support occupa-tion (first column). Waller County has the highest percentages in the construction/extraction (second column) and the production/transportation occupations (fourth column). Given the absence of one of the large Texas cities in any of these counties, it is not surprising that all counties lag the state in terms of the management, business or finance occupation group (sixth column).
The presence of a large university in each of these counties is reflected in the proportion of the population in education-related jobs. Kleberg County undoubtedly registers the highest percentage (e.g., 10.6 percent), because of the presence of A&M-Kingsville in our rural county. In fact, 21 percent of Kleberg County salaries come from governmental institutions (i.e., education, police, fire, city hall, etc.). By contrast, only 14 percent of Randall County jobs and 12 percent of Waller County jobs are governmental. Waller County leads in the “self-employed, not incorporated” [think maintenance, personal services (i.e., beauty salon)] sector. Meanwhile, 60 percent of Randall County employees work for private firms including corporations. Only 23 percent of Kleberg County residents are self-employed, while another 56 percent are private wage earners.
A bright spot in the employment conditions realm is Kleberg County’s recent job growth and projected job growth, which is depicted in Figure 9. The 2.8 percent job growth during 2014 exceeds both the Texas (e.g., 2.6 percent) and United States (e.g., 1.2 percent) growth rates, and might be attributable to A&M-Kings-ville’s recent growth. Perhaps most exciting is the 3.6 percent annual growth rate forecast for the 2015 to 2024 period. Kleberg County’s forecast job growth rate exceeds that of Randall County, Waller County, Texas and the United States overall.
30%
25%
15%
5%
0%
10%
20%
Figure 9: Job Growth and Job Growth Prospects
30%
Sales, Office,Administrative
Support
Kleberg County
Randall County
Waller County
Texas
Construction,Extraction
Education Production/Transportation
FoodPreparation
Management,Business,Finance
25%
20%
15%
10%
5%
0%
23.2% 11.5% 10.6%10.0%15.8%12.1%
13.5%12.2%14.4%
13.0%8.7%
8.9% 8.3% 8.0%5.6%
5.6%5.2%
8.0%6.9%6.1%8.6%
23.6%24.9%
27.6%
Figure 8: Most Common Occupations with at Least Seven Percent of Population
Source: U.S. Bureau of Census
4.0%
2014 2015-2024
3.5%3.0%2.5%
2.8%
2.6%
1.2%
-0.3% 3.2%
3.5%
3.5%
3.1%
3.0%
3.6%
2.0%1.5%
0.5%0.0%
-0.5%
1.0%
Kleberg County
Randall County
Waller
Texas
United States
Source: U.S. Bureau of Labor Statistics
This high growth will help offset the recent upswing in Kleberg County unemployment, which is shown with the blue line in Figure 10. Although unemployment is down from the 8.4 percent mark in 2010, the recent 6.2 percent unemployment rate is up almost one percent from the end of 2014. Waller County’s unemployment rate has also recently ticked up, but the increase is only 0.3 percent. By comparison, Randall County and Texas overall experienced a decline in the unemployment rate during the first half of 2015 to 3.2 percent and 4.2 percent, respectively.
Part III. Monetary Expenditures
Figure 10: Unemployment Rate 2010-2014 Year-end, 2015 July
109
8
8.4%
8.6%
8.0%
8.2% 7.0%
5.2%
7.9%
7.4%
4.9% 4.4% 4.3%
4.6% 4.2%5.6%
6.8%
6.5%
6.4% 6.2%5.4%
5.0% 5.3%
3.4%
6.4%
3.2%
76
5
4
3
21
02010 2011 2012 2013 2014 2015
Kleberg
Une
mpl
oym
ent R
ate
Randall
Waller
Texas
Source: U.S. Bureau of Labor Statistics
Relatively low incomes are not alarming if the cost of living is also proportionately lower. Figure 11 helps put this potential off-setting factor into perspective for the three counties under consideration and Texas overall. Perhaps the first thing that pops out is that none of the bars reach 100, meaning that local costs overall and on the identified dimensions are always lower than the average costs in the United States.
As depicted by the blue bar in the first overall cost of living cluster, Kleberg County’s cost of living is only 79 percent of the national average. The cost of living in Kleberg County is below that of the other reported political jurisdictions. Looking across the cost of living components, one sees that this 79 percent mark arises from the extremely low 44 percent cost of housing. In fact, when it comes to the cost of healthcare, transportation and utilities, Kleberg County’s costs are on the high end. In each case, residents of Kleberg County pay a percentage that is 98 percent of the national level. Local grocery costs exceed those in Waller County and equal the statewide mark of 90 percent of the national average. The key difference across these costs of living is that housing is a purely local commodity. By comparison, groceries have to be shipped into Kleberg County from elsewhere, health care costs are dictated by national insurance reimbursement rates, vehicles are produced in San Antonio or farther away and air conditioning costs are relatively high.
Figure 11: Cost of Living100
80
60
40
20
Overall
79 90
90
90 90 97
91 93
99
96
96 97
94 92
79
77
98 44 98 98
83
88 86
81
Grocery Health Housing UtilitiesTransportation
0
Kleberg
Randall
Waller
Texas
Source: Sperling’s Best Places to Live
Randall County, Waller County and Texas overall have approximately the same cost of living value. Randall County residents pay relatively fewer dollars for healthcare and utilities. Waller County residents pay less for groceries and transportation than other counties in this comparison.
Before leaving the cost of living analysis, additional information is being shared about local housing costs (in Figure 12) and how housing has been changing (in Figure 13). Sperling’s analysis of the “Best Places to Live,” reports that the average per square foot cost of current homes is $78 dollars in Kleberg County. This is $10, $13, $14 and $34 dollars less than the costs in Randall County, Waller County, Texas and the United States on average, respectively, as shown in the first set of bars in Figure 12.
The 44 percent of national housing costs level assigned to Kleberg County is based upon recent home sales. As shown in the sales price diagram on the right of Figure 12, the average price of recently sold homes is $78 per square foot in Kleberg County. With home prices and home sales prices being equal on a per square foot basis, it appears as though residences on the market are not more expensive than the typical Kleberg County residence. The local new home cost, on a square foot basis, is well below the $162 price experienced in the rest of the nation. Differing from the situation in Kleberg County, recently-sold homes in Randall County, Waller County and Texas overall, have costs per square foot that are below national average and the cost of existing housing.
$180
$140$120$100$80$60$40$20$0
$160
Home Prices
$78
$88
$89
$78
$78
$77
$112 $162
$91
$92
Sale Prices
Kleberg
Randall
Waller
Texas
United States
Figure 12: Housing Costs/ Price per Square Foot
Source: Sperling’s Best Places to Live
Rental housing costs also contribute to the relatively low housing cost of living report shown in Figure 11. The average of all-rental cost in Kleberg County is $526 per month. However, the relatively high propor-tion of student housing, at $401 for a one bedroom, understates the true rental cost in Kleberg County. By comparison, the average cost of all rentals in Randall County and Waller County is $1,253 and $1,229, respectively.
Low housing costs are a two-edged sword to a community. Low costs attract residents, while low reve-nues limit builder interest in projects within a community. Figure 13 reports the number of building permits issued in two-year periods over the past 12 years. After a very slow 2003 –2004 period, building permits in Kleberg County were pretty stable at about 50 every two years from 2005 to 2012. However, during the recent 2013-2014 period, building permits went up dramatically, as exhibited by the rising blue line in Figure 13. Consistent with its larger population base, more building permits are issued in Randall County. The red line in Figure 13 seems to have two segments, with an average of about 70 permits during the first three time segments (i.e., 2003-2008), and 110 thereafter (i.e., 2009-2014). By contrast, building permits in Waller County have fallen from 187 in the 2005-2006 period, before the financial crisis of 2008, to about 30 every two years since 2008.
The purchase of housing brings with it the obligation to pay property taxes. Information related to property taxes in the largest city in each of the three counties being studied is given in Figure 14. Kingsville residents pay an annual property tax of $0.74 per $100 of assessed value, as shown in the first column of Figure 14. A similar county tax rate exists in Waller County’s city of Hempstead but is almost twice that paid in more-urban Randall County. Adding the Kingsville’s city tax ($0.84), school tax ($1.52) and other taxes ($0.09) results in a $3.19 cost per $100 of valuation. Total taxes in Randall County’s city of Canyon amount to $2.10 per $100 of valuation, while the total in Hempstead is $2.53. Stated another way, residents of Kingsville pay $1.09 more per $100 of assess property valuation than those in Canyon and $0.66 more than those in Hempstead. Although differences in valuation procedures may account for differences in the taxes, it appears as though Kingsville residents pay a higher level of property taxes.
80
15 47 49
79
46 7553
63 60 100 117 111
131 187 92 3031 34
6040200
100
200
2003/2004 2005/2006 2007/2008 2009/2010 2011/2012 2013/2014
180160140120
Kleberg
Randall
Waller
Figure 13: Building Permits/ Two-year Moving Window
Figure 14: Property Taxes
Source: U.S. Bureau of Census
Source: Kleberg County Appraisal District, Randall County Tax Office and Waller County Tax Office
Perhaps the best way to increase a community’s economic condition is through education. Bringing the focus of education and property taxes together--especially in light of the varying school system taxes in Kleberg County ($1.52), Randall County ($1.22) and Waller County ($1.38)—an analysis was conducted regarding the amounts spent on education. In Kleberg County $11,200 is spent per student on education, which is more than all but the United States average of $12,400, as shown in the first column of Figure 15. Comparing the first column to the second column of Figure 15, we see that approximately half of the expenditure on education goes to instruction in each political jurisdiction. In Kleberg County, the $5,500 is 49 percent of the $11,200 spent on average per student. One benefit of the higher fees is the lower local student-to-teacher ratio. As shown in the right hand column of Figure 15, on average, there are two more students (i.e., 14.9-12.9) in the typical Randall County classroom, verses the typical Kleberg County class-room. In the United States, one would expect to see 2.4 more students.
3.50
2.50
1.50
0.500.00
0.74
0.790.40
0.69
1.58 3.10
2.10
3.19
2.01
2.43 2.531.05
County Tax
Kingsville
CanyonHempstead
Plus City Tax Plus School TaxPlus Other
Property Taxes
1.00
2.00
3.00
Figure 15: Educational Expenditures
$18.0
$11.2 12.9
14.9
14.0
13.2
15.3
$10.1
$10.8
$12.4
$5.2
$5.2
$6.4
$5.5
$4.3$7.7
$16.0$14.0$12.0$10.0
$8.0$6.0$4.0$2.0$0.0
Total Expenditure perStudent (in Thousands)
Instructional Expendituresper Student (in Thousands) Student/Teacher Ratio
Kleberg
Randall
Waller
Texas
USA
Source: Sperling’s Best Places to Live
Part IV. Economic Forum Survey Results
Economic ConditionsU.S. Economy. Perceptions regarding the economy, business support, leading economic concerns and desired government spending were again collected from participants, local residents and students. Participants were asked to share their perceptions when they registered for the Economic Forum. Mem-bers of the Delta Sigma Pi business fraternity assisted in the collection of responses from local residents. Students in the author’s finance class and Delta Sigma Pi members were the primary source of informa-tion regarding student opinions. In order to entice survey participation, two prizes were secured from Kleberg Bank. Non-university survey-takers and students assisting in a survey of local residents were each eligible for a soft-sided cooler valued at $60. Nonetheless, survey participation remained weak, resulting in this being an unscientific sampling of the identified populations. At best, it is a measure of the beliefs held by those willing to participate. On average, 18 Economic Forum participants and 46 students have taken the survey since the inception of the CBA Economic Forum in 2012. Last fall, local residents were added to the list of those surveyed, with an average of 28 responses.
Approximately half of Economic Forum participants and students expect the economy to improve over the next year, as exhibited in Figure 16. There has been a decline in participant confidence regarding the overall economy, though the number remains above the 2012 and 2013 levels. Student confidence is back to its 2012 high of 52 percent expecting economic growth over the coming year. By contrast, only about one third of local residents are as confident that the economy will grow over the following year. For perspective, the survey was taken between the time of the first Republican Presidential debate and first Democratic Presidential debate, which included a lot of rhetoric regarding what is wrong with America.
807060504030
38
2552
36
36 49
30 32
76 46
2010
02012
Participants
Students
Local Residents
2013 2014 2015
Figure 16: Percent of People Expecting Improvement in U.S. Economy during the Next Year
Figure 17: Percent of Sample Expecting Improvement in Local Economy during the Next Year
Disclaimer: On average, surveys were completed by 18 participants, 28 local residents, and 46 students in the spring of 2012, spring of 2013, fall of 2014 and fall of 2015. Given the low sample size, this survey is a measure of those who wanted to participate and is not necessarily representative of the population from which the sample is drawn. (Applies to Figures 16-21).
Local Economy. Confidence in the local economy has reached its lowest level during the four years that the survey has been taken, as exhibited in Figure 17. Participant confidence in the local economy is 60 percent of what it was in 2012, while student confidence is 56 percent of that year’s level. Over the past year, local resident confidence in the local economy has dropped by about one fourth, with only 26 percent of local residents expecting the local economy to improve over the coming year. Given the region’s dependency on the energy industry, these declines are not surprising in light of the drop in oil prices over the past year.
80
2012
75
75
72
50 54
45
42
36 26
59
2013 2014 2015
70605040302010
0
Participants
Students
Local Residents
IBID
Figure 18: Percent of Sample Expecting Improvement in Personal Financial Condition during the Next Year
Personal Economic Conditions. Diminished expectations regarding the local economy are reflected in expectations regarding the likelihood of personally being better off in a year, which is exhibited in Figure 18. Over the past two years, the percentage of Economic Forum participants who are confident about their personal future being better has fallen from 86 to 35 percent. Forum participants, who tend to be more entrepreneurial in nature, are still twice as confident as local residents, who tend to be job takers. The bright spot in this analysis is the response of students, where we find over half expecting to be personally better off in a year. Of course, the prospect of moving out of student housing and from temporary employ-ment to a full-time job creates an upward bias here. However, students registered a very noticeable improvement in expectations regarding their economic futures.
100
2012 2013 2014 2015
8060
50
39 36
47 35
17 16
5375
86
40200
Participants
Students
Local Residents
Business Support by Local Community. The perceived relationship between the local community and business varies by respondent group, as exhibited in Figure 19. Economic Forum participants, which includes a higher level of business owners than the other groups, tend to rank the support received by the local community to be higher. However, there has been a lot of variation around the average percentage of participants believing Kleberg County community supports local businesses, which is 60 percent. Local resident views of Kleberg County community support have been quite stationary, at about one third of the respondents viewing the local community as being supportive of businesses. Student perception of the support provided to businesses by the local community has fallen from a participant-matching 75 percent to a level more in line with local residents. The discussion below regarding primary economic fears will shed additional light on these trends.
IBID
Figure 19: Percent of Sample Perceiving Local Community Is Supportive of Business
Figure 20: Percent of Sample Perceiving Local Government Is Supportive of Business
80
2012 2013 2014 2015
60
75
75
42
4150
65
55
583229
4020
0
Participants
Students
Local Residents
Participants
Students
Local Residents
Business Support by Local Government. Perceptions regarding the level of support given by local govern-ment to business have experienced a dip at different times across the respondent groups, as exhibited in Figure 20. The dip in this measure occurred first for Economic Forum participants, and has recovered and stabilized around the 50 percent level meaning half of participants are satisfied with the support provided to business by local government officials. The dip in student perceptions regarding government support occurred in 2014, and has subsequently recovered to a top value in 2015 of 57 percent. Perhaps the decline witnessed among local residents in this measure in 2015 will show recovery by next fall as well.
60
62
48 41
32
39
53 50
57
5062
70
2012 2013 2014 2015
5040302010
0
IBID
IBID
Figure 21: Percent of Sample Perceiving Texas A&M-Kingsville Is Supportive of Business
University support of local business. As in past years, Texas A&M University-Kingsville again registers the highest level of perceived business support, as exhibited in Figure 21. The percentage of Economic Forum participants with favorable views of A&M-Kingsville’s support has reached 84 percent, which is an increase of 15 percent from 2014. In contrast, the perception of local residents and students on this measure has declined slightly. If the trend continues, additional effort should be made to share with these groups some of the participant-noticed aspects of A&M-Kingsville that are helping the local business community.
75
75 64 6147
6956
73
71
20132012
10080604020
02014 2015
84Participants
Students
Local Residents
Top Economic Concerns. Survey respondents were asked to identify their greatest economic concerns by ranking 11 various measures of a community, which are listed alphabetically in the first column of Figure 22. In order to assess the change in the perceived importance of these economic variables, information is provided for 2014 and 2015. Public education continues to top the list of priorities, regardless of the group surveyed. Economic Forum participants listed housing second for the second consecutive year, which currently ranks fifth among the Kleberg County residents and students. These two groups ranked health care as their second priority, which currently comes in fourth among participants.
Perhaps the most enlightening aspect of Figure 22 is not the economic variables at the top of the list, but those that fell out and entered the top five listing. The factor which has risen in prominence is unemploy-ment, which no group listed as a top-five concern in 2014. This fall, unemployment is ranked third by Economic Forum participants and students, and fourth by local residents. Making room for unemployment was a decline in the importance of city beautification among participants, border security among local residents and inflation among students.
IBID
Border Security
Participants StudentsLocal Residents
2014 2015 20143
3
3
3
3
3
4
444
4
4
55
5 5
5
5
2
2 22 2
2
1 1 11
1 1
2015 2014 2015
Health CareHousingInflationInfrastructurePersonal SecurityTaxationTerrorismUnemployment
City BeautificationPublic Education (K-12)
Figure 22: Top Economic Concerns
Desired Local Government Spending. In order to address these economic concerns, survey respondents were asked to indicate how they felt government should spend an unexpected windfall. Figure 23 presents the preferred allocation for all uses with at least one group indicating that five percent of the money should go to a designated use. Figure 23 exhibits an average of the 2014 and 2015 values, which were quite consistent.
Per $100 available, Economic Forum participants would give $19 to each of their two top spending priori-ties, streets and K-12 public education. Local residents would move $1 from public education to streets. Students would further increase the disparity among these two accounts, raising the street allocation to $24, while reducing the K-12 public education allocation to $14. “Infrastructure,” which was mentioned repeatedly during both parties’ presidential debates, receives an average $12.
The various groups have different opinions regarding where to spend additional amounts of money. Limiting the discussion to amounts in excess of $10, Economic Forum participants would spend $13 on parks and recreation. Local residents would spend $12 on building repair and maintenance. Students would direct $17 to tourism/economic development. Although fire and police protection does make the listing, the amounts spent are relatively small, which may be a result of a general level of satisfaction with both of these institutions within Kleberg County.
Disclaimer: On average, surveys were completed by 20 participants, 28 local residents, and 61 students in the fall of 2014, and fall of 2015. Given the low sample size, this survey is a measure of those who wanted to participate and is not necessarily representative of the population from which the sample is drawn. (Applies to Figures 22 and 23.)
Figure 23: Preferred Government Allocation of $100 in Additional Revenue
$100
$80
$40
$20
$7
$5
$5
$12
$9
$10
$10$11
$13
$14
$19
$19
$12
$13
$18 $14
$20 $23
$7 $17
$3 $8
$5
$8 $7
$6 $7
$0
$60
StudentsLocal CitizensParticipants
Police
Streets
Other
Fire
Infrastructure
Public Education
Parks & Recreation
Property Maintenance
Tourism
All divisions with at least $5 allocation
Summary
The 2015 Economic Forum Report compared Kleberg County to two other Texas counties with universities in The Texas A&M University System of similar enrollments. Noticeable differences were observed in terms of the demographics, income and expenditures. As in prior years, the Fall 2015 report also presents findings from a survey of Economic Forum participants, local residents and Texas A&M University-Kingsville students. The survey discloses concerns about the local economy which have been reported in the local press and other outlets as oil prices have declined, with unemployment now being registered as a concern by all groups. Next year’s report will contrast three Texas counties with similar relatively-rural populations.
IBID
Our Sponsor
We wish to extend avery special thanks to
forum2015
