2003 status of rural texas

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ORCA’s Mission: “To assist rural Texans who seek to enhance their quality of life by facilitating, with integrity, the use of the resources of our state so that sustained economic growth will enrich the rural Texas experience for the benefit of all.” The Status of Rural Texas, 2003 OFFICE OF RURAL COMMUNITY AFFAIRS Robt. J. “Sam” Tessen, MS Executive Director

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A demographic report on conditions and trends in rural Texas.

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Page 1: 2003 Status of Rural Texas

ORCA’s Mission: “To assist rural Texans who seek to enhance their quality of life by facilitating, with integrity, the use of the resources of our state so that sustained economic growth will enrich the rural Texas experience for the benefit of all.”

The Status of Rural Texas,

2003

OFFICE OF RURAL COMMUNITY AFFAIRS

Robt. J. “Sam” Tessen, MS Executive Director

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January 1, 2004 The Honorable Rick Perry The Honorable Tom Craddick Governor, State of Texas Speaker of the House of Representatives, State of Texas The Honorable David Dewhurst The Honorable Members Lieutenant Governor, State of Texas 79th Legislature It is with honor that the following report is submitted to you for your review and consideration. The passage of House Bill 7 by the 77th Legislature created the Office of Rural Community Affairs (ORCA). The enabling legislation includes the following requirement: “The office shall monitor developments that have a substantial effect on rural Texas communities, especially actions of state government, and compile an annual report describing and evaluating the condition of rural communities.” The following report is offered in fulfillment of the requirement. The Status of Rural Texas encompasses a broad spectrum of issues that affect rural communities across our state, and includes a variety of actions of state government directed toward those areas or issues. Rural communities in the state of Texas range from those struggling to survive to those struggling to find the infrastructure to keep up with their growth. The attention needed by our rural communities covers the range from survival strategies to managing unplanned growth. Strengths and weaknesses abound in all. Despite such challenges, each rural community contributes significantly to the people of the state of Texas and Texas’ economy, present and future. In addition to offering a vast array of tourism and recreational opportunities, rural Texas offers the mineral wealth, agricultural products, and livestock that sustain all Texans and ensure the vitality of the Texas economy. In every sense of the word, rural communities are partners in the success of the future of Texas. It is our hope that this second report on the status of rural Texas will contribute to the ongoing dialogue that is shaping Texas’ future. This report is the second annual installment and not an endpoint. In creating this report, we have held a series of public hearings to ask a broad range of rural Texans for their opinions, concerns, and possible solutions to the challenges that they face. As such, The Status of Rural Texas offers a glimpse at some of the complex and diverse issues affecting rural Texas. We will continue to monitor developments with all interested parties to maintain an objective focus on the status of life in rural communities. Thank you on behalf of the Executive Committee and the staff of the agency for the opportunity to contribute to the future of our rural communities. Respectfully submitted, Robt. J. “Sam” Tessen, MS Executive Director

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EXECUTIVE COMMITTEE MEMBERS

William M. Jeter, III, Chair Bryan, Texas

David Richey Alders Nacogdoches, Texas

Jim Roberts Lubbock, Texas

Nicki Harle Baird, Texas

Lydia Rangel Saenz Carrizo Springs, Texas

Carol Harrell, Vice Chair Jefferson, Texas

Patrick Wallace Athens, Texas

Wallace G. Klussmann Fredericksburg, Texas

Michael Cooper Waters, Secretary Abilene, Texas

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TABLE OF CONTENTS

EXECUTIVE SUMMARY ................................................................................................................... 1

INTRODUCTION............................................................................................................................... 7

CLASSIFICATION OF COUNTY TYPES .............................................................................................. 8

DEMOGRAPHICS ........................................................................................................................... 12

AGRICULTURE .............................................................................................................................. 17

ECONOMY ..................................................................................................................................... 20

EDUCATION: SPECIAL SECTION .................................................................................................. 26

HEALTHCARE ............................................................................................................................... 38

HOUSING CHARACTERISTICS ....................................................................................................... 45

OIL AND GAS PRODUCTION........................................................................................................... 48

PUBLIC SERVICES ......................................................................................................................... 49

TAX BASE ...................................................................................................................................... 51

TELECOMMUNICATIONS............................................................................................................... 53

TRANSPORTATION ........................................................................................................................ 56

WATER RESOURCES...................................................................................................................... 58

REGIONAL PROFILES .................................................................................................................... 61 ALAMO ……….……………………………………………………………………….…63

CENTRAL TEXAS ………..…………………………………………………………….…91 EAST TEXAS ……….………………………………………………………………..…. 119 LOWER GULF COAST ……….…………………………………………………...……. 147 NORTH CENTRAL TEXAS ………..…………………………………………………..… 175 NORTH TEXAS PLAINS …………………………………………………………….…... 203 PANHANDLE REGION………………………………………………………………..…. 231

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RIO GRANDE REGION………………………………………………………...…...…… 259 SOUTH TEXAS PLAINS ………………………………………………………………… 287 UPPER GULF COAST ………………………………………………………………..…. 315 WEST TEXAS….. ………………………………………………………...…...……….. 341 BORDER…………….. ………………………………………………………………… 369 LESSONS LEARNED………………………………………………………………………...…... 397 APPENDICES APPENDIX A (Economic development corporations) …………………………………..399 APPENDIX B (Trends in tuition and fees) ……………………………………………… 427 APPENDIX C (Healthcare-related maps) …………………………………………….… 433 APPENDIX D (Telecommunications maps) ……………………………………………. 443 APPENDIX E (State service regions and field offices) ………………………………… 451 NOTE: The Status of Rural Texas is available online at http://www.orca.state.tx.us

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EXECUTIVE SUMMARY This report is the second annual installment of The Status of Rural Texas. It builds upon the first Status of Rural Texas report and sharpens its focus down to the regional level. As we developed this year’s The Status of Rural Texas report, it was our hope that this report would generate dialogue and even debate about the future of rural Texas. Our goal in writing this document is to help rural issues reach a wider audience and facilitate increased awareness and discussion. As such, The Status of Rural Texas offers an overview of some of the complex and diverse issues affecting rural Texas. In creating this report, we held a series of public hearings to ask a broad range of rural Texans for their opinions, concerns, and possible solutions to the challenges that they face. Their feedback was central to this year’s issue of The Status of Rural Texas. From the input received at the public hearings, we developed a series of indicators as detailed in the following table.

Indicator Brief definition Population projections Population projections from 2000 to 2040

Population by age group Population in 2000 as distributed by the following age groups: under 5, 5-14, 15-19, 20-44, 45-64, and 65 and older

Income and poverty levels Total personal income in 2000, median household income in 1999, per capita income in 2000, and percent of individuals living below poverty in 1999

Civic participation Registered voters and actual voter turnout for the 2000 presidential elections

Agricultural land use Change in farmland acreage, average farm size, and number of farms between 1987 and 1997

Agricultural production Market value of agricultural products in 1997

Criminal indigent defense Expenditures and changes in court expenses and attorney fees for 2001 and 2002

Employment and unemployment Civilian labor force estimates for July 2003 and percent change from July 2002, and unemployment rates for same time period

Net gain/loss of businesses Change in number of firms between 2001 and 2003

Economic development sales tax 4A and 4B sales tax revenues for 2002, and change in 4A and 4B tax revenues between 1997 and 2002

Tourism spending and employment

Destination spending and change between 1997 and 2002, as well as 2002 tourism-related sales tax revenue

Educational attainment Educational attainment for 2000, broken down by less than high school, high school, some college or Associate, and Bachelor and higher

Healthcare professionals Number and ratio per 100,000 population in 2002 for the following professions: primary care physicians, dentists, pharmacists, licensed psychologists and counselors, and registered nurses

Staffed hospital beds Number and ratio per 100,000 population for staffed hospitals beds in 1999

Uninsured population Estimate of uninsured population in 2002 for the following age groups: under 19; and 19 to 64

Housing units Total housing units and number of vacant units in 2000, percent change in total housing units between 2000 and 2002, and units without complete plumbing

Homeownership Occupied housing units categorized by owner/renter for 2000 Telephone service Occupied housing units without telephone service in 2000 Property tax base Property values, deductions, and classifications for 2002

Sales tax base Gross sales for 2003, percent change from 2002, and sales subject to state sales and use tax

Bridges Number of load restricted bridges and bridges recommended for restriction in November 2003

Roads Centerline miles of state-maintained roads and paved/unpaved roads in 2002 Water use Percent of water use across sectors in 2001 Available water Available water in 2000 and projected change between 2000 and 2040

Public water systems Number and percent of public water systems serving 1,000 or fewer connections and greater than 1,000 connections in 2003

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This report has certain features: Regional focus: We divided the state into 11 regions, keeping intact the councils of government geographic divisions. In addition, there is a section for the 43-county border region. The regions were designed to respect geographic, cultural, and economic traditions. At the end of each regional section, we have included a summary highlighting the region’s strengths. County types: We looked at each region as broken down by three different county types (rural, micropolitan, and urban) to facilitate data analysis. This report aggregates data for these three county types, based on definitions from the U.S. Office of Management and Budget (OMB). Data collection: We collected reliable, county-level data for the aforementioned indicators, breaking the data down by the different county types in each region. County-level data are the building blocks for every indicator in this report. We had to limit our indicators to those with data to support them. For example, indicators that demonstrate quality of life are difficult to substantiate. What is the status of rural Texas in 2003? Below are some highlights for both rural Texas as a whole and for the regions. Agriculture • In 1997, the most recent year for which county-level data are available, rural and micropolitan

counties accounted for 78 percent of the state’s $13.7 billion agricultural production value. • The Panhandle region contributed $6.37 billion or 46.3 percent of the state’s agricultural products

market in 1997, the largest share of the 11 regions. • In 2001, Texas was the second largest agricultural state, accounting for about seven percent of the

total US agricultural income. In 2002, gross cash receipts for agricultural crops and livestock totaled $12.6 billion, which is a decrease from $15.2 billion in 2000.

• In 2002, the estimated value of Texas’ share of agricultural exports was $2.9 billion. Fifteen percent of all Texans work on farms or in farm-related jobs. Texas is the nation’s leading producer of cattle, sheep, goats, horses, wool, mohair, and cotton. The state is also one of the top producers of vegetables, citrus, peanuts, pecans, grain sorghum, rice, sugarcane, and wheat.

Demographics • The state’s rural landscape is home to a greater population than the combined populations of Alaska,

Delaware, North Dakota, Vermont, and Wyoming. • Of the 1,196 incorporated cities in Texas, 1,012 (or 85 percent) have fewer than 10,000 residents. • During the next four decades, the population in urban areas is expected to grow by almost 75 percent.

Between 2000 and 2040, the population in rural counties will grow by 19 percent. The Hispanic population in all areas of Texas is expected to grow the fastest, increasing from nearly 320,000 to almost 590,000 in rural areas.

• The micropolitan and rural counties in the Rio Grande region are projected to experience population growth at nearly three times the state averages for these county types.

• Other regions of the state have low nonmetropolitan populations and are becoming more urban. For example, in the Upper Gulf Coast region, 97 percent of the population resides in the urban counties currently, and the urban population is expected to represent 98 percent in this region in 2040.

Economy • While the rural civilian labor force grew at the same rate as the state, the unemployment rate in the

rural counties (6.6 percent) was lower than the state average (7.4 percent) in 2002 and dropped lower

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in 2003 (6.5 percent). Unemployment varied by region, with the Rio Grande, South Texas Plains, and West Texas regions experiencing higher than average unemployment in some county types.

• Most of the economic development corporations in rural counties saw an increase in 4A/4B sales tax revenues from 1997 to 2002. However, rural corporations, on average, collect far less sales tax revenue than their urban counterparts. In 2002, 103 of the 161 corporations in operation in rural counties collected less than $100,000. Sixty-three corporations collected less than $50,000, making it very difficult for them to comply with the required use of the taxes to generate primary jobs.

• The 1999 median household income in the nonmetropolitan counties in the North Central region was more than $4,000 more per household than the state averages for nonmetropolitan counties.

Education • Recent research by The Rural School and Community Trust demonstrates that smaller schools in four

states—Texas, Georgia, Montana, and Ohio—reduce the harmful effects of poverty on student achievement and “help students from less affluent communities narrow the academic achievement gap…between them [selves] and students from wealthier communities.”

• Four-year graduation rates at rural high schools outpace state graduation rates and graduation rates for all other county types. The four-year graduation rate (for students entering high school in the 1998-1999 school year and earning a high school diploma at the end of the 2001-2002 school year) for Texas is 69.3 percent (68 percent for urban, 74.4 percent for micropolitan, and 79.8 percent for rural).

• The diminished tax base in rural areas has made it increasingly difficult for existing rural community colleges to improve facilities or expand the number of courses offered. In 2002-2003, the total levy for community colleges in Texas was $815.4 million. Texas’ nineteen rural community colleges collected approximately $40.7 million. In other words, 38 percent of Texas’ community colleges collected just five percent of Texas’ community college levy.

• In Central Texas, nonmetropolitan counties have a greater level of educational attainment compared to the state averages for rural and micropolitan counties.

Healthcare • In 2003, the state of Texas had 24 rural or micropolitan counties with no primary care physician; 19

had only one primary care physician; and 22 had only two primary care physicians. There were 61 rural or micropolitan counties without hospitals; 13 without pharmacists; and 40 without dentists.

• Texas’ urban and micropolitan counties had slightly more staffed beds per 100,000 population than the state average in 1999—urban, 288; micropolitan, 292. Urban counties in Texas also had a total of more staffed beds than other county types—urban, 49,611; micropolitan, 4,257; rural, 3,125.

• In 2002, the ratio of healthcare professionals in rural counties in the South Texas Plains region was higher than the state averages for most professions.

Housing • In 2000, Texas had a total of 8.15 million housing units, 6.88 million in urban counties, 608,193 in

micropolitan counties, and 666,336 in rural counties. Rural and micropolitan counties had more vacant housing units relative to the total number of units than the urban counties.

• Rural counties have the slowest growth rate for new housing units: 1.3 percent from 2000 to 2002. • Rural counties have the highest percentage of homeowners (77 percent) followed by the micropolitan

counties (71 percent). The rural counties in the Rio Grande region have the highest homeownership rate in the state, at 81 percent.

Natural Resources • Rural counties accounted for 75 percent of the state’s oil and gas production in 1999. In almost one

of every three Texas counties, oil and gas constitute at least 20 percent of the property tax base, and in one of every eight counties, it accounts for over 50 percent of the tax base.

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• In 2002, oil, gas, and minerals represent more than half of property value in the nonmetropolitan counties in the West Texas region.

• From 1987 to 1997, micropolitan counties in the Lower Gulf Coast region experienced the greatest loss in farmland acreage in the state (-41.8 percent). These counties also showed a decrease in the number of farms (-19.7 percent) as well as in the average farm size (-36.5 percent).

Public services • Statewide spending for criminal indigent defense increased by approximately $20 million between

2001 and 2002. At the state level, all county types (urban, micropolitan, and rural) experienced increased costs for criminal indigent defense.

• From 1988 to 2000, the Texas Legislature appropriated $2.3 billion to construct facilities for over 108,000 prison beds. Rural counties attracted prison construction by offering land, utilities, easements, and other amenities; in fact, a majority of these new prisons were built in rural areas.

Tax base • Nearly 88 percent of total taxable value comes from urban Texas; 5.6 percent from micropolitan; and

7 percent from rural. Urban Texas has slightly more than 86 percent of the state’s population, while micropolitan and rural Texas each have approximately 7 percent of the state’s population.

• In 2002, nearly half of the total taxable property value ($8.16 billion of $17.3 billion) is found in the nonmetropolitan counties in the North Texas Plains region, and is fairly evenly distributed between the micropolitan and rural counties.

Telecommunications • Citizens living in rural counties, whether they rent or own, are most likely among Texans to lack

telephone service. Overall, 5.2 percent of occupied housing units in rural counties lack telephone service; 4.7 percent in micropolitan counties lack telephone service; and 2.9 percent in urban counties lack telephone service.

• In Texas, renters in rural areas are the group least likely to have phone service. 11.7 percent of renters in rural counties lack telephone service (9.6 percent in micropolitan; 5.4 percent in urban).

• Competition in rural areas of Texas is increasing and, as of June 2002, competitive local exchange carriers (CLECs) served 16 percent of local customers in rural areas, as compared with 13 percent in suburban and 16 percent in urban areas.

Tourism • In 2001, rural areas ranked first as travel destinations and rural travel-related spending (not including

air fares) totaled $2.5 billion. Rural destinations maintained their number one ranking in 2002 and preliminary estimates indicate rural travel spending in 2002 remained on par with 2001 levels.

• In East Texas, rural and micropolitan counties have more travel-related jobs than these county types elsewhere in Texas.

• In 2002, tourism accounted for nearly 9,000 jobs in the Border region’s nonmetropolitan counties. • Between 1997 and 2002, destination spending in rural counties in the Alamo region increased by 44

percent, almost twice the state average of 24 percent. During this period, Gillespie County had a net gain of 180 travel-related jobs, an increase of more than 30 percent, compared to 4 percent statewide.

Transportation • Statewide, 46.3 percent of the total 41,008 Farm to Market (FM) miles are in rural counties, 19.2

percent are in micropolitan counties and 34.5 percent are in urban counties. • Statewide, 43.8 percent of the total highway miles are in rural counties, 17.5 percent are in

micropolitan counties, and 38.7 percent are in urban counties.

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• Forty percent of the state’s load-restricted or recommended bridges are located in rural counties, 17 percent are in micropolitan counties, and 43 percent are in urban counties.

Water resources • Roughly 85 percent of the state’s water is located in nonmetropolitan counties. The great majority of

the state’s water is located in the West Texas region, primarily in the form of groundwater. • In urban counties, the primary use of water is for municipal use (52 percent), and the second major

usage in for irrigation (24 percent). In contrast, in rural counties, 87 percent of water is dedicated to irrigation. Likewise, 76 percent of water in micropolitan counties is used for irrigation.

• In Texas, a large percentage of water systems are small water systems—roughly 5,800 or 86.3 percent have 1,000 or fewer connections.

• More than 95 percent of state water resources is derived from groundwater sources. LESSONS LEARNED Different regions have different strengths Although common issues exist, people living in different regions have different concerns and different resources. Regionalism and the expanding sense of community There was a growing acceptance among participants at public hearings that, in some cases, regional cooperation and collaboration may present the best hopes for the long-term sustainability and growth of their hometowns. Need for data and improved methods of data collection Our attempts to accurately describe and evaluate the status of rural Texas were constrained by the availability of county level data. This suggests a need to evaluate how data are defined and collected. Potential to include other indicators We acknowledge that the indicators contained in this report are not the only pertinent indicators that could be used to evaluate the status of rural Texas. FUTURE CONSIDERATIONS This report is not an endpoint, but hopefully it will be of use to rural Texans who passionately believe in the future of their communities and their regions. We will continue to monitor developments with all interested parties to maintain an objective focus on the status of life in rural communities. ORCA welcomes comments related to this report and suggestions for the next annual report.

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INTRODUCTION Pursuant to House Bill 7 (HB 7) of the 77th Legislative Session (Section 487.051(4), Government Code), the Office of Rural Community Affairs (ORCA) “shall monitor developments that have a substantial effect on rural Texas communities, especially actions of state government, and compile an annual report describing and evaluating the condition of rural communities.” To fulfill this responsibility, ORCA held a series of public hearings in rural communities across the State of Texas during the summer of 2003. The goal of these hearings was to listen to rural Texans and their concerns, to share in their achievements, and to ask what would help their communities to grow. The second installment of The Status of Rural Texas includes topics and indicators derived from comments and suggestions made by public hearing participants. The feedback received at the public hearings is central to this year’s issue of The Status of Rural Texas. Why should all Texans care about rural Texas? Although rural, suburban, and urban Texas are often discussed separately, the future of any part of Texas is linked to the success of all. Although it may not be apparent, all Texans, regardless of where they reside, depend on one another. Until shortly after the Second World War, Texas was primarily rural. Rural areas of Texas continue to provide a critical foundation upon which Texas is built. The qualities that are associated with rural Texas (its vastness, richness, beauty, and natural resources and the independence and self-reliance of its people) are inherently linked with the greatness of Texas as a whole. Rural Texas continues to provide opportunities for many Texans and will continue to do so for many generations provided that its challenges and barriers are identified and addressed. As a primary source of agriculture, livestock, petrochemical, and mining industries, the contribution of rural Texas to the state’s traditional economy is clearly significant. Rural Texas also stands to play a major role in Texas’ future. As a primary source for recreation, hunting and fishing, rural areas provide something less tangible but equally important—much needed time with family and friends and a chance to reconnect with the many qualities that make Texas great. Therefore, it is important to preserve, maintain, and enhance rural Texas for the good of all Texans. In this report, we have taken a regional focus in an effort to highlight the varying challenges facing rural Texas. We have done so by collecting county level data and presenting our findings on a regional level. We have combined councils of government into geographic regions to facilitate the presentation of our findings. For the purpose of this report, Texas has been divided into 11 regions. These regions keep intact the state’s regional governing bodies, known as Councils of Government or COGs, and group them based on similarities in geographical, economic, and cultural characteristics. In addition to profiling these 11 regions, the report includes a profile of the 43-county border region. This report is not an endpoint, but hopefully it will be of use to rural Texans who passionately believe in the future of their communities and their regions. We will continue to monitor developments with all interested parties to maintain an objective focus on the status of life in rural communities. ORCA welcomes comments related to this report and suggestions for the next annual report.

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CLASSIFICATION OF COUNTY TYPES In last year’s report, we used the U.S. Office of Management and Budget’s (OMB) 1993 classification of nonmetropolitan to describe “rural” counties. Under the 1993 classification, the OMB designated a county as “nonmetropolitan” if it was located outside territory designated as metropolitan. A county was designated as “metropolitan” if it contained a place with a minimum population of 50,000 and had a total population of at least 100,000. The OMB also considered commuting patterns, population density, and growth when classifying counties as metropolitan. Thus, a nonmetropolitan county contained places with populations less than 50,000 and had a total population of less than 100,000. Based on the 1990 Census, OMB’s 1993 definition classified 196 Texas counties as rural, or nonmetropolitan.

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In June of 2003, OMB revised its definition for metropolitan statistical area and created a new designation, micropolitan statistical area, which is a subset of nonmetropolitan. Under this new definition, Texas has 77 metropolitan counties and 177 nonmetropolitan counties.

This report aggregates data for three county types: rural, urban, and micropolitan.

• “Metropolitan statistical areas” have at least one urbanized area of 50,000 or more population, plus adjacent territory that has a high degree of social and economic integration with the core as measured by commuting ties. For the purpose of this report, a county that is included in a “metropolitan statistical area” is designated as an “urban” county. Using this definition, there are 77 urban counties in Texas. These counties range in population from 1,771 (Irion County) to 3.4 million (Harris County).

• “Micropolitan statistical areas” have at least one urban cluster of at least 10,000 but less than 50,000 population, plus a high degree of social and economic integration with the core as measured by commuting ties. For the purpose of this report, a county that is included in a “micropolitan statistical area” is designated as a “micropolitan” county. Using this definition, there are 44 micropolitan counties in Texas. These counties range in population from 414 (Kenedy County) to 80,130 (Angelina County)

• There are 133 “rural” counties in Texas, which are counties not located in a metropolitan or micropolitan statistical area. These counties range in population from 67 (Loving County) to 48,140 (Van Zandt County).

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BREAKDOWN BY COUNTY TYPE

METROPOLITAN (URBAN) COUNTIES (77 counties) Aransas Brazos Coryell Grayson Jones Orange Taylor Archer Burleson Crosby Gregg Kaufman Parker Tom Green Armstrong Caldwell Dallas Guadalupe Kendall Potter Travis Atascosa Calhoun Delta Hardin Lampasas Randall Upshur Austin Callahan Denton Harris Liberty Robertson Victoria Bandera Cameron Ector Hays Lubbock Rockwall Waller Bastrop Carson El Paso Hidalgo McLennan Rusk Webb Bell Chambers Ellis Hunt Medina San Jacinto Wichita Bexar Clay Fort Bend Irion Midland San Patricio Williamson Bowie Collin Galveston Jefferson Montgomery Smith Wilson Brazoria Comal Goliad Johnson Nueces Tarrant Wise

NONMETROPOLITAN (MICROPOLITAN) COUNTIES (44 counties)

Anderson Dawson Hockley Kerr Navarro Starr Wilbarger Andrews Deaf Smith Hood Kleberg Nolan Titus Willacy Angelina Erath Hopkins Lamar Palo Pinto Uvalde Bee Gray Howard Matagorda Reeves Val Verde Brown Hale Hutchinson Maverick Roberts Walker Cherokee Harrison Jim Wells Moore Scurry Washington Cooke Henderson Kenedy Nacogdoches Somervell Wharton

NONMETROPOLITAN (RURAL) COUNTIES (133 counties)

Bailey Concho Franklin Jack Llano Panola Sterling Baylor Cottle Freestone Jackson Loving Parmer Stonewall Blanco Crane Frio Jasper Lynn Pecos Sutton Borden Crockett Gaines Jeff Davis Madison Polk Swisher Bosque Culberson Garza Jim Hogg Marion Presidio Terrell Brewster Dallam Gillespie Karnes Martin Rains Terry Briscoe DeWitt Glasscock Kent Mason Reagan Throckmorton Brooks Dickens Gonzales Kimble McCulloch Real Trinity Burnet Dimmit Grimes King McMullen Red River Tyler Camp Donley Hall Kinney Menard Refugio Upton Cass Duval Hamilton Knox Milam Runnels Van Zandt Castro Eastland Hansford La Salle Mills Sabine Ward Childress Edwards Hardeman Lamb Mitchell San Augustine Wheeler Cochran Falls Hartley Lavaca Montague San Saba Winkler Coke Fannin Haskell Lee Morris Schleicher Wood Coleman Fayette Hemphill Leon Motley Shackelford Yoakum Collingsworth Fisher Hill Limestone Newton Shelby Young Colorado Floyd Houston Lipscomb Ochiltree Sherman Zapata Comanche Foard Hudspeth Live Oak Oldham Stephens Zavala Source: US Office of Management and Budget, 2003.

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DEMOGRAPHICS

Population overview and recent trends Rural Texas covers approximately 80 percent of the state’s total land area, encompassing 213,297 of Texas’ 267,277 square miles. 2.9 million of Texas’ nearly 21 million citizens live in rural or micropolitan areas. Of the 1,196 incorporated cities in Texas, 1,012 (or 85 percent) have fewer than 10,000 residents.1 Rural and Micropolitan counties in Texas combined have a higher population count than each of 22 other states and the District of Columbia: Alaska, Arkansas, Connecticut, Delaware, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Rhode Island, South Dakota, Utah, Vermont, West Virginia, Wyoming. The state’s rural landscape is also home to a greater population than the combined populations of Alaska, Delaware, North Dakota, Vermont, and Wyoming. Texas’ population reached 20,851,820 in 2000 according to the US Census Bureau. While the state is predominately rural when considering its geographic composition, Texas is predominantly urban when considering population. According to the 2000 Decennial Census, 84.8 percent of Texas’ population lives in metropolitan areas. This is underscored by recent population growth trends—the state’s 27 metropolitan areas accounted for over 91 percent of Texas’ population growth between 1990 and 2000. Growth in the state’s metro areas, however, is not evenly distributed. It is concentrated in the large metropolitan areas of Dallas, Houston, San Antonio, and Austin. Austin added 403,536 people during the 1990’s, increasing its population by nearly 50 percent. Other areas with significant growth are metro areas located along the Texas-Mexico border, such as McAllen, Brownsville, and Laredo. One of the fastest growing regions in the state is the Lower Rio Grande Valley, which comprises two adjacent metro areas—McAllen and Brownsville. Together these cities added 261,025 people between 1990 and 2000—about the same as the increase for the entire San Antonio metro area during the same period.2

Total Population for the State of Texas by Urban, Micropolitan and Rural Areas in Texas

Population Urban 17,944,548 Micro 1,489,577 Rural 1,417,695 Texas 20,851,820

Source: U.S. Census Bureau (2000) The areas that experienced the greatest growth between 1990 and 2000 are those areas classified as “metropolitan suburban”, with a change in population of 45 percent. The areas classified as “metropolitan central cities” grew by 20 percent during the same period, while “nonmetropolitan adjacent” and “nonmetropolitan nonadjacent” grew by 13.8 and 7.8 percent, respectively.

1 2000 Census data. 2 Business and Industry Data Center’s Texas Economy Online, http://www.bidc.state.tx.us/overview/2-2te.htm#Population

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Population and Percentage Change for the State of Texas

and Metropolitan and Nonmetropolitan Areas in Texas* Population Change in Population Area

1990 2000 Number Percent Metropolitan Central City 11,615,291 13,993,705 2,378,414 20.48 Metropolitan Suburban 2,550,367 3,698,175 1,147,808 45.01 Nonmetropolitan Adjacent 1,962,353 2,234,027 271,674 13.84 Nonmetropolitan Nonadjacent 858,499 925,913 67,414 7.85

Source: Center for Demographic and Socioeconomic Research and Education, Department of Rural Sociology, Texas A&M University System. *Based on OMB’s 1993 classifications of metropolitan and nonmetropolitan.

Population projections During the next four decades, urban areas will experience large growth across all sectors, whereby the percent change will be almost 75 percent. The largest growing sector will be the Hispanic population, nearly tripling from 5.9 million to 16.8 million. From 2000 to 2040, micropolitan areas will experience a growth statewide by 30.8 percent, and rural counties will grow by 19 percent.

Statewide Population Projections3 Total Anglo Black Hispanic Other

Number Percent change Number

% of total pop. Number

% of total pop. Number

% of total pop. Number

% of total pop.

2000 17,944,548 --- 9,224,814 51.4% 2,166,816 12.1% 5,892,786 32.8% 660,132 3.7%

2020 24,389,587 35.9 9,838,714 40.3% 2,727,352 11.2% 10,598,659 43.5% 1,224,862 5.0% Urban

2040 31,376,581 74.9 9,581,383 30.5% 3,009,495 9.6% 16,864,366 53.7% 1,921,337 6.1%

2000 1,489,577 --- 880,372 59.1% 135,492 9.1% 458,408 30.8% 15,305 1.0%

2020 1,754,898 17.8 899,622 51.3% 148,410 8.5% 687,278 39.2% 19,588 1.1% Micro

2040 1,948,661 30.8 840,366 43.1% 147,648 7.6% 938,992 48.2% 21,655 1.1%

2000 1,417,695 --- 969,530 68.4% 119,345 8.4% 318,472 22.5% 10,348 0.7%

2020 1,593,893 12.4 996,707 62.5% 128,411 8.1% 456,883 28.7% 11,892 0.7% Rural

2040 1,687,088 19.0 961,243 57.0% 126,270 7.5% 587,975 34.9% 11,600 0.7%

2000 20,851,820 --- 11,074,716 53.1% 2,421,653 11.6% 6,669,666 32.0% 685,785 3.3% 2020 27,738,378 33.0 11,735,043 42.3% 3,004,173 10.8% 11,742,820 42.3% 1,256,342 4.5% State 2040 35,012,330 67.9 11,382,992 32.5% 3,283,413 9.4% 18,391,333 52.5% 1,954,592 5.6%

Source: U.S. Census Bureau

3 The Office of the State Demographer for State of Texas, Texas State Data Center Texas A&M University System, distributes the most widely used population projections for Texas. This current series is the result of revised population data from the 2000 census. Each projection series includes three scenarios resulting in three alternative sets of population values for the State and each county are presented in these projections. These scenarios assume the same set of mortality and fertility assumptions in each scenario but differ in their assumptions relative to net migration. The net migration assumptions made for three scenarios are derived from 1990-2000 patterns which have been altered relative to expected future population trends. This is done by systematically and uniformly altering the adjusted 1990-2000 net migration rates by age, sex and race/ethnicity. The scenarios so produced are referred to as the zero migration (0.0) scenario, the one-half 1990-2000 (0.5) scenario, and the 1990-2000 (1.0) scenario. The recommended scenario for most county based projection reporting used is believed to be the 0.5 scenario as most appropriate scenario for most counties in Texas.

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The statewide projections for Anglo and Hispanic population changes from 2000 to 2040 are nearly the exact opposite, whereby the Anglo population is expected to decrease from 53.1 percent to 32.5 percent and the Hispanic population will increase from 32.0 percent to 52.5 percent. These changes fall across all sectors (urban, micro, and rural counties) in similar increments.

Statewide Population Projections

53.1%

4.5%

52.5%

3.3%

32.0%

11.6%

42.3%

10.8%

42.3%

5.6%9.4%

32.5%

0%

10%

20%

30%

40%

50%

60%

Anglo Black Hispanic Other

200020202040

Source: U.S. Census Bureau

Population by age group When comparing the population characteristics of urban, micro, and rural counties at the state level, all three county types have similar percentages for persons from birth to 19 years. The two biggest differences among age groups by county type are for individuals aged 20 to 44 years (30.8 percent of Texas’ rural population vs. 39.42 percent of Texas’ urban population) and individuals 65 and older (17.36 percent of Texas’ rural population vs. 9.04 percent of Texas’ urban population). The decreased number of young working age adults from 20 to 44 years of age could indicate that such individuals have moved to urban or suburban counties for employment or educational opportunities. The second percentage shows that the population in rural Texas tends to be older than the population in urban and suburban areas and could indicate the desirability of rural Texas as a retirement destination.

Source: U.S. Census Bureau

State: Population by age (2000) Age group Urban Micro Rural State

Under 5 8.0% 7.1% 6.3% 7.8% 5-14 15.9% 15.2% 14.5% 15.8%

15-19 7.8% 8.4% 7.7% 7.8% 20-44 39.4% 34.5% 30.8% 38.5%45-64 19.9% 21.1% 23.4% 20.2%65+ 9.0% 13.7% 17.4% 9.9%

Source: U.S. Census Bureau

State: Population by age, percent (2000)

0%

20%

40%

60%

80%

100%

Urban Micro Rural State

65+45-6420-4415-195-14Under 5

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Income levels and poverty status Total personal income is an indicator of the economic strength of a community, county or larger region. In 2000, total personal income (farm and non-farm) for the state reached $578.2 billion, an increase of 13.6 percent from 1998.

Regional Indicator Individual Indicators

2000 total personal income

Percent change from 1998

1999 median household

income4

2000 per capita

personal income

1999 percent of individuals living below

poverty Urban $526.9 billion 15.9% $41,744 $29,367 14.5% Micro $30.5 billion 9.18% $31,195 $20,474 18.51% Rural $29.1 billion 9.63% $30,173 $20,531 16.88% State $586.5 billion 14.58% $39,927 $28,131 15.4%

Source: Bureau of Economic Analysis, US Census Bureau In contrast to total personal income, per capita income and average household income can indicate how well individuals and families are doing. Median household income is higher than per capita income because it includes wages earned by all individuals living within a single household. It also includes other sources of income, such as net self-employment income; dividends; interest; rent and royalty income or income from estates and trusts; Social Security; Supplemental Security Income (SSI); retirement, survivor, or disability pensions; and all other income. The average per capita personal income in Texas was $27,752 in 2000. Median household income for the state was $39,927 in 1999. Household and per capita income in rural counties is significantly lower than the state and urban counties. Adding poverty rates to the mix helps make the picture clearer. 15.4 percent of individuals were living below poverty in Texas in 1999. This represents a decrease from the 1989 rate of 18.1 percent.

4 Median household income for county types and regions was calculated using an abbreviated version of income distribution tables from the U.S. Census Bureau, compared to those used in Census Summary File 3. At the statewide level, this alternate methodology results in a 0.02 percent variation from the Summary File 3 figure.

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Civic participation For the 2000 Presidential Election, 86.7 percent of the rural population was registered to vote, compared with 81.8 percent of the urban population and 82.2 percent of the micropolitan population. Furthermore, the rural sector also turned out to vote in higher percentages.

State: Civic participation (2000 presidential elections)

81.8% 82.2% 82.2%86.7%

51.5% 52.2%55.7%

51.8%

0%

20%

40%

60%

80%

100%

Urban Micro Rural Total

Registered voters

Voter turnout

Source: Texas Office of the Secretary of State

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AGRICULTURE

Land Use Texas has more than twice as many farms as any other state—227,000; Missouri, the next state, has 110,000. Texas has more land acreage in farms than any other state: 131 million compared with Montana’s 57 million. Agriculture is Texas’ principle land use—Texas farm acreage comprises 78 percent of the state’s total land area.

From 1987 to 1997, the state experienced a loss in farmland acreage. Contrary to intuitive thought processes, there was a slight increase in farmland acreage in urban counties. These counties also experienced an increase in the number of farms during the same period. All county types experienced a decrease in the average farm size, but micropolitan counties experienced the greatest change, decreasing by more than 15 percent.

Farmland Acreage 1987 to 1992 1992 to 1997 1987 to 1997 Urban 30,691,975 30,294,971 31,217,765 Micro 23,778,123 22,905,009 22,503,322 Rural 77,268,405 77,826,180 77,389,085 State 131,738,503 131,026,160 131,110,172 Number of Farms Urban 76,860 72,249 80,215 Micro 33,778 32,352 34,534 Rural 81,665 78,683 82,671 State 192,303 183,284 197,420 Change in Average Farm Size Urban 1.89% -4.38% -2.57% Micro -8.53% -7.91% -15.76% Rural 3.54% -7.56% -4.29% State 1.25% -7.30% -6.14%

Source: USDA National Agricultural Statistics Service, 1997 Census of Agriculture

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Agricultural production In 2001, Texas was the second largest agricultural state, accounting for about seven percent of the total US agricultural income.5 In 2002, gross cash receipts for agricultural crops and livestock totaled $12.6 billion, which is a decrease from $15.2 billion in 2000. In 2002, the estimated value of Texas’ share of agricultural exports was $2.9 billion.6 Fifteen percent of all Texans work on farms or in farm-related jobs. Texas is the nation’s leading producer of cattle, sheep, goats, horses, wool, mohair, and cotton. The state is also one of the top producers of vegetables, citrus, peanuts, pecans, grain sorghum, rice, sugarcane, and wheat. The 1997 Census of Agriculture includes the most recent county-level data on agricultural production. The census, which is conducted every five years, tracks the market value of agricultural products sold. Products include grains, hay, silage and field seeds, vegetables, fruits, nuts, nursery and greenhouse crops, and livestock, poultry and their products. In 1997, the market value of the state’s agricultural products was $13.7. The Panhandle region dramatically outpaced the other regions of the state in agricultural production.

Market value of agricultural products by region, 1997Total market value for the state: $13.7 billion

01234567

Alamo

Centra

l Tex

as

East T

exas

Lower

Gulf C

oast

North C

entra

l

North T

exas

Plai

ns

Panha

ndle

Rio Gran

de

South

Texas

Plains

Upper

Gulf C

oast

Wes

t Tex

as

Dol

lars

in b

illio

ns

Source: National Agricultural Statistics Service

5 Texas Department of Agriculture. 6 USDA Foreign Agricultural Service, September 2003.

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Market value of agricultural products (1997) by county type

Total sales forTexas: $13.7 billion

22%

23%

55%

Urban

Micro

Rural

Source: National Agricultural Statistics Service Another way to assess the value of agriculture to the state economy is to consider the industry’s overall contribution to the Gross State Product (GSP). In 2000, the total food and fiber system, which includes all economic activities linked to agricultural production, such as food processing, machinery repair, fertilizer production, distribution of products and eating establishments, was estimated to contribute $72.8 billion, or 9.8 percent of the Texas GSP. 7

7 Texas Agricultural Experiment Station, The Texas A&M University System

In 1997, rural counties accounted for $7.58billion of the state’s agricultural productionmarket value, or 55 percent. Micropolitancounties added $3.17 billion (23 percent)and urban counties contributed $3 billion(22 percent).

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ECONOMY

Workforce and Jobs From July 2002 to July 2003, the civilian labor force8 in Texas Region grew at an estimated 2.37 percent. During the same time frame, the statewide unemployment rate increased slightly from 7.38 to 7.63 percent. Rural counties fared a bit better.

State: Civilian labor force estimate State: Unemployment rate

July 2003 Change from

July 2002

July 2003

July 2002 Urban 9,857,142 2.43% 7.68% 7.40% Micro 661,065 1.38% 7.95% 7.83% Rural 631,390 2.37% 6.51% 6.58% State 11,149,597 2.37% 7.63% 7.38%

Source: Texas Workforce Commission While the rural civilian labor force grew at the same rate as the state, the unemployment rate in the rural counties was lower than the state average in 2002 (6.58 percent) and dropped a bit lower in 2003 (6.51 percent). Unemployment varied by region, with the Rio Grande, South Texas Plains, and West Texas regions experiencing higher than average unemployment in some county types.

July 2003 average unemployment by region

0%

5%

10%

15%

20%

Alamo

Centra

l Tex

as

East T

exas

Lower

Gulf C

oast

North C

entra

l

North T

exas

Plai

ns

Panha

ndle

Rio Gran

de

South

Texas

Plai

ns

Upper

Gulf C

oast

Wes

t Tex

as

UrbanMicroRural

Source: Texas Workforce Commission

8 The civilian labor force is the sum of civilian employment and civilian unemployment. These individuals are civilians (not members of the Armed Services) who are age 16 years or older, and are not in institutions such as prisons, mental hospitals, or nursing homes.

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In 2000, 78 percent of the workers in Texas were private wage and salary workers; 14.6 percent worked for government, 7.1 percent were self-employed, and 0.3 percent were unpaid family members. Rural and micropolitan counties had a higher proportion of government workers (18.7 percent) compared to the urban counties (14 percent) and the state average. The rural counties had the highest percentage of self-employed workers (11.8 percent) compared to nine percent in the micropolitan counties and 6.6 percent in the urban counties. Although the numbers are low across the board, rural counties also had the highest percentage of unpaid family members (0.8 percent) compared to 0.6 percent in the micropolitan counties and 0.3 percent in urban counties.

State: Class of Workers (2000)

0%

20%

40%

60%

80%

100%

Urban Micro Rural State

Unpaid familySelf-employedGovernmentPrivate wage & salary

Source: US Census Bureau

State: Net gain/loss in number of businesses

Firms 1st

quarter 2001 Firms 1st

quarter 2003 Percent change

Urban 368,672 374,879 1.68% Micro 32,175 31,728 -1.39% Rural 35,302 34,768 -1.51% State 436,149 441,375 1.2%

Source: Texas Workforce Commission

Tourism and the economy Tourism is big business in Texas. The state ranks third in its share of domestic travel spending, behind only California and Florida. In 2002, travel to rural destinations accounted for 19.24 percent of travel by all visitors—21.24 percent of leisure travel and 14.91 percent of business travel. In 2001, rural areas ranked first as travel destinations and rural travel-related spending (not including air fares) totaled $2.5 billion. Rural destinations maintained their number one ranking in 2002 and preliminary estimates indicate rural travel spending in 2002 remained on par with 2001 levels.

The total number of businesses in Texasincreased 1.2 percent from 2001 to 2003, ledby an average increase of 1.68 percent in theurban counties. Conversely, micropolitancounties experienced a 1.39 percent net loss inthe number of businesses, while rural countieslost even more businesses: 1.51 percent

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Top ten destinations overall in Texas in 2002

(total of 189.6 million person trips) Ranking Destination % of total

1 Rural Texas (counties not in an MSA)9 19.24 2 Dallas PMSA10 14.34 3 Houston PMSA 12.31 4 San Antonio MSA 11.72 5 Austin MSA 9.05 6 Fort Worth-Arlington PMSA 4.86 7 Corpus Christi MSA 2.89 8 Galveston-Texas City PMSA 2.33 9 Lubbock MSA 2.25

10 Amarillo MSA 2.08

Top ten business destinations in Texas in 2002 (total of 59.4 million person trips)

Ranking Destination % of Total 1 Dallas PMSA 17.85 2 Rural Texas (counties not in an MSA) 14.91 3 Houston PMSA 12.60 4 Austin MSA 11.16 5 San Antonio MSA 7.81 6 Fort Worth-Arlington PMSA 5.70 7 Lubbock MSA 2.63 8 Corpus Christi MSA 2.60 9 Abilene MSA 2.53

10 Waco MSA 2.49

Top ten leisure destinations in Texas in 2002 (total of 59.4 million person trips)

Ranking Destination % of total 1 Rural Texas (counties not in an MSA) 21.24 2 San Antonio MSA 14.34 3 Dallas PMSA 12.73 4 Houston PMSA 12.17 5 Austin MSA 8.07 6 Fort Worth-Arlington PMSA 4.47 7 Galveston-Texas City PMSA 3.15 8 Corpus Christi MSA 3.02 9 Amarillo MSA 2.12

10 Lubbock MSA 2.07 Sources: Office of the Governor, Economic Development & Tourism; D.K. Shifflet and Associates, LTD.

9 MSA = Metropolitan Statistical Area. 10 PMSA = Primary Metropolitan Statistical Area (used where one or more MSA are adjacent)

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Destination spending (not including air transportation) reached nearly $29 billion statewide in 2002. Rural areas (outside metropolitan statistical areas) collectively ranked as the number one destination for travelers in Texas in 2001 and 2002. Destination spending increased by nearly 20 percent in rural counties overall. However, 2002 spending in rural counties ($1.07 billion) and micropolitan counties ($1.27 billion) pales in comparison to the $26.4 billion spent in urban counties. Travel spending contributes to significant tax revenue at the local and level. In 2002, local sales tax collection related to travel reached $13.9 million in the rural counties and $18.8 million in the micropolitan counties. Urban counties collected more than $599 million in local sales taxes related to travel. Travel-related sales taxes also contribute to the state coffers: urban counties added $1.98 billion in 2002, micropolitan counties over $101 million, and rural counties $82.9 million.

State: Destination spending State: 2002 travel-related tax revenue 1997 2002 % change Local sales tax State sales tax

Urban $21.2 billion $26.4 billion 24.6% $599.1 million $1.98 billion Micro $1.06 billion $1.27 billion 19.8% $18.8 million $101.18 million Rural $894.8 million $1.07 billion 19.89% $13.9 million $82.9 million State $23.18 billion $28.8 billion 24.2% $631 million $2.17 billion

Source: Office of the Governor, Economic Development and Tourism The economic effects of tourism can also be seen in the employment sector. Statewide, earnings related to nearly 451,000 travel-related jobs hit $11.9 billion in 2002. Although many rural communities see tourism as a way to jumpstart a declining economy and job market, the numbers indicate how much work remains to be done for tourism to become a meaningful economic generator. The 77 urban counties boasted 409,020 travel-related jobs in 2002, the lion’s share of employment in this sector. The 44 micropolitan counties had 20,000 travel-related jobs, while the 133 rural counties could claim only 19,400 jobs, a drop of 450 from 1997.

State: Travel-related employment

1997 jobs 2002 jobs 2002 earnings Urban 409,020 411,500 $11.4 billion Micro 20,370 20,000 $310.3 million Rural 19,850 19,400 $275.7 million

State 449,240 450,900 $11.9 billion Source: Office of the Governor, Economic Development and Tourism

The demand for hunting leases, which provide a significant contribution to the economy of many counties, is growing, but land that can produce huntable wildlife is decreasing. Estimated hunting lease income for 2000 was $291 million across rural Texas.11 Wildlife-associated recreation provides a valuable source of income for the state of Texas. In 2001, state residents and non-residents spent $5.4 billion on wildlife-related recreation. In 2001, fishing expenditures contributed almost $2 billion, while hunting and wildlife watching contribute $1.5 billion and $1.3 billion, respectively, to the Texas economy. In 2001, approximately 4.9 million Texas residents 16 years and older engaged in these activities.12

11 2002-2003 Texas Almanac, Mary G. Ramos, Editor. 12 2001 National Survey of Fishing, Hunting, and Wildlife-Associated Recreation, US Fish and Wildlife Service.

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4A and 4B Economic Development Sales Taxes 4A/4B sales taxes represent the state’s largest local revenue source for economic development. These sales taxes are generally available to cities located within a county of under 500,000 in population that have the capacity to adopt an additional one-half cent sales tax while remaining under the local sales tax cap (combined local sales tax rate not exceeding two percent). Under certain conditions, which vary county to county, cities located in counties with a population over 500,000 may also adopt an economic development sales tax. As of August 15, 2003, 123 Texas cities had a 4A sales tax in place, 303 cities had passed a 4B sales tax, and 87 cities had adopted both types of economic development tax. Most of these cities have formed two corporations to administer projects for the two types of taxes. The maps in Appendix C show the locations of these cities. In fiscal year 2002, economic development sales tax collections totaled $323.6 million: $119.7 million generated from 4A sales taxes, and $203.6 from 4B taxes. More than twice as many economic development corporations have been formed by cities in urban counties than in rural counties.

State: Total 4A and 4B sales tax revenue collected (2002) Urban Micro Rural State Revenue collected, 2002 $282.9 million $20.5 million $20.15 million $323.55 million Number of corporations 33313 55 16114 549

Source: Texas Comptroller of Public Accounts The purposes or “projects” for which economic development sales taxes may be used have evolved and expanded since the initial legislation passed in 1979. Most recently, during the 78th Legislative Session, House Bill 2912 amended the laws related to 4A and 4B sales taxes. Among other things, the bill redefined “primary jobs,” as jobs that are within 14 specific industry sectors and at companies that export a majority of products or services beyond the local market, infusing new dollars into the local economy. The definition is important because economic development corporations are required to focus on projects that will result in primary jobs. The Office of Attorney General is expected to publish an updated Handbook on Economic Development Laws for Texas Cities in 2004, which will provide guidelines for the amended law.

13 Four of the corporations in urban counties administer projects for both 4A and 4B sales taxes. 14 Five of the corporations in rural counties administer projects for both 4A and 4B sales taxes.

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State: 4A/4B economic development sales tax revenue trends

# of corporations

1997 taxes collected

1997 taxes adjusted for inflation15

2002 taxes collected

Percent change

Urban 190 $137,350,413 $153,832,463 $169,573,852 10.2%

Micro 33 $14,696,219 $16,459,765 $16,813,807 2.2% Rural 95 $11,383,340 $12,749,341 $14,554,289 14.2% State 318 $163,429,972 $183,041,569 $200,941,947 9.8%

Source: Texas Comptroller of Public Accounts To ensure a meaningful trend analysis of economic development sales tax collections from 1997 to 2002, only those corporations that reported tax revenues in both years were used. The percent change is calculated from a comparison of inflation-adjusted 1997 sales tax collections and actual 2002 collections. Statewide, 318 economic development corporations experienced an average 10-percent increase in sales tax revenues from 1997 to 2002. Corporations in rural counties faired better than their counterparts in the other county types, with an average increase of 14 percent, compared to 10 percent in urban counties and two percent in micropolitan counties. Increases in revenue levels tell only part of the story. In 2002, the 190 urban economic development corporations that were included in the trend analysis collected an average of $892,500 (based on 2002 taxes collected divided by the number of corporations). Corporations in micropolitan counties collected an average of over $500,000. In contrast, economic development corporations in rural counties collected an average of only $153,000. Given this large discrepancy in sales tax revenues, rural cities have difficulty keeping up with their more populous neighbors in terms of economic development efforts. In 2002, 103 of the 161 economic development corporations in operation in rural counties collected less than $100,000 in sales taxes. Sixty-three of these corporations collected less than $50,000, making it very difficult for them to comply with the required use of the taxes to generate primary jobs.

15 Total 1997 revenue was converted to 2002 dollars using the Inflation Calculator from the U.S. Bureau of Labor Statistics available at http://data.bls.gov/cgi-bin/cpicalc.pl. 1997 actual collections were multiplied by a factor of 1.12 to calculate the value in 2002 dollars.

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EDUCATION: SPECIAL SECTION

Public education The prevailing understanding is that the governor will call a special session on the subject of school finance reform in the spring of 2004 if a consensus among legislators has emerged. During the legislative interim, the Select Committee on Public School Finance is examining every aspect of Texas’ school finance system. Currently, many rural school districts are facing funding shortfalls. Although declining student enrollments may be exacerbating these shortfalls, some contend that rural school districts are not receiving their appropriate share of funding. As the state’s allocation structure for education is reexamined, it will be important to examine the challenges faced by rural school districts and ensure that such school districts are receiving appropriate and equitable funding. FUNDING FORMULAS THAT IMPACT RURAL TEXAS SCHOOLS School funding in Texas uses a weighted student formula to create a basic per student allotment. Several provisions of the Texas Education Code have been created to minimize the economic disparities associated with operating small school districts. Small school adjustment—Subsections 42.103 (b) and (c) of the Education Code adjust the basic allotment formula for small school districts above or below 300 square miles in size that enroll less than 1,600 students according to average daily attendance (ADA). There is concern that the calculation for the adjusted allotment per student (AA) for school districts below 300 square miles in size promotes conditions that may result in the consolidation of small school districts. The factor for such districts is .00025 in the formula, AA = (1 + ((1,600 - ADA) × .00025)) × adjusted basic allotment (ABA). For school districts with a size of at least 300 square miles and not more than 1,600 students in ADA the factor is .0004 in the formula, AA = (1 + ((1,600 - ADA) × .0004)) × ABA. For example, a school district of less than 300 square miles in size with 400 ADA gets a 30 percent increase in weights for all students, while a school district of at least 300 square miles in size with 400 ADA gets a 48 percent increase in weights for all students. These increases are significant for small schools and have been termed “the life-blood of rural education in Texas.” Sparsity adjustment—Section 42.105 of the Education Code establishes the sparsity adjustment, which can be “stacked” on top of the small school adjustment. The sparsity adjustment permits very small school districts located at least 30 miles from the nearest high school district to adjust their attendance to a higher attendance level for funding purposes, as follows: • Districts with at least 90 students in K-12, may adjust their attendance to 130; • Districts with at least 50 students in K-8, may adjust their attendance to 75; and • Districts with at least 40 students in K-6, may adjust their attendance to 60. School facilities funding—Section 46.003 of the Education Code establishes 400 as the minimum number of students in ADA for the school facilities allotment formula. As a result, schools with fewer than 400 students are permitted to use 400 for the funding formula. Declining average daily attendance—School districts experiencing decreases in their total ADA that exceed two percent may be permitted to use 98 percent of the previous year’s ADA for state funding purposes, subject to appropriation limits. For the current state fiscal biennium (2004-2005), the cap on appropriations for this purpose is $22 million. Open-enrollment charter schools are specifically not covered by this adjustment.

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SMALLER SCHOOLS REDUCE IMPACT OF POVERTY Recent research by The Rural School and Community Trust, a national nonprofit organization, demonstrates that smaller schools in four states—Texas, Georgia, Montana, and Ohio—reduce the harmful effects of poverty on student achievement and “help students from less affluent communities narrow the academic achievement gap…between them [selves] and students from wealthier communities.”16 The “excellence effect” of small school size—Researchers asked, “Does a school or school district’s size influence its students’ performance differently depending on the level of poverty in the communities from which the students come?” In Georgia, Ohio, and Texas, researchers found strong evidence that students in less affluent communities perform better when they attend smaller schools. In fact, researchers concluded “the lower the income of the community served by the schools, the more achievement sags in larger schools and surges in smaller schools.” In Texas, as school size increases, the average achievement score in schools serving children from poorer communities falls on eight of ten test scores. Researchers concluded, “While all schools can surely be improved, the smallness of these schools is an asset to student achievement. Consolidating them into larger schools would likely produce lower achievement scores in the less affluent communities.” The equity effect: “Poverty’s power rating” is weakened by small schools—Researchers also asked, “Does poverty have more power over student performance in larger or in smaller schools?” They calculated the percentage of the variance in test scores that could be explained by the level of poverty in the communities served by schools. Researchers called this statistic “poverty’s power rating” because it suggests how much of a negative impact poverty has over student achievement. In all four states, smaller schools cut poverty’s power rating by between 20 and 70 percent, and usually by 30 to 50 percent, depending on grade level. In Texas, smaller schools reduced the negative effect of poverty on average student achievement in every grade tested. In critical grades 8 and 10, where children are at or near the age when they are most at risk of dropping out, small schools cut poverty’s power over achievement by 80 to 90 percent in reading, writing, and mathematics. Schools “at risk” of lower student performance—According to the study, at least one-fourth of the schools serving moderate to low-income communities in Texas are too large to achieve top performance from their student body and many would likely produce higher scores if they were smaller. So researchers asked, “How many schools and students would be ‘at risk’ of worse performance if the school were consolidated into a larger school or…would likely perform better if the school were smaller?” In Texas, between 26 and 57 percent of schools (depending on grade level tested) would likely produce lower average student scores if the schools were larger (or higher scores if the schools were smaller). According to the study, at the 10th grade level, 57 percent of schools in Texas are too big to maximize achievement; yet, these schools serve almost half (46 percent) of Texas’ 10th graders.

Texas schools “at risk” of lower performance because of size and income level of the community served* Grades in which TAAS testing occurs 3rd 8th 10th

Percent of schools offering this grade “at risk” of lower performance 26 29 57

Percent of students in this grade attending schools “at risk” of lower Performance 27 32 46

Average enrollment in schools “at risk” of lower performance 586 590 651

* Adapted from the study’s original table to reflect Texas data only. Results from the 1996-1997 TAAS test were used for this study. Note: Montana is not included because “excellence effect” was not statistically significant in most tested grades. However, there is strong evidence that Montana’s smaller schools outperform its larger schools at all levels of community poverty, despite serving poorer communities in general.

16 The full study is available online at: http://www.ruraledu.org/docs/sapss/sapss.html

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FOUR-YEAR GRADUATION RATES IN TEXAS

State: Four year graduation rates Urban Micro Rural State

Smoothed 9th grade 257,942 23,521 22,280 303,743 Total high school pop. 98-99 901,866 84,643 82,759 1,069,268 Total high school pop. 01-02 958,103 83,080 80,089 1,121,272 Total high school pop., # change 56,237 -1,563 -2,670 52,004 Total high school pop., % change 6.2% -1.8% -3.2% 4.9% Smoothed 9th x % change 16,084 -434 -719 14,773 12th grade cohort (est.) 274,027 23,087 21,561 318,516 Total Graduates, 2002 186,362 17,183 17,213 220,758 Graduation rate 68.0% 74.4% 79.8% 69.3%

Source: Texas Education Agency This table shows four-year graduation rates for Texas students entering high school as freshmen in the 1998-1999 school year and leaving as high school graduates after the 2001-2002 school year. The number of graduates does not include those students that obtained a general equivalency degree (GED). Also, this analysis does not include charter schools and other special school districts. The Greene Method was used in determining the 4-year graduation rates for urban, micropolitan, and rural counties in Texas. The data were derived from the Texas Education Agency’s Academic Excellence Indicator System. The smoothed 9th grade number referred to in the table is the average of total 8th grade enrollment in 1997-1998, total 9th grade enrollment in 1998-1999, and total 10th grade enrollment in 1999-2000 (for rural counties in Texas the smoothed 9th grade total is 22,280). Statistical smoothing is done for 9th grade enrollment because large numbers of students are generally held back in 9th grade. To control for in-migration and out-migration of student populations it is assumed that loss or gain of students by grade will be similar. So, the total high school enrollment for the 1998-1999 school year is subtracted from total high school enrollment for the 2001-2002 school year (for rural counties—80,089 enrollees in 2001-2002 minus 82,759 enrollees in 1998-1999 for a loss of 2,670 enrollees) and is used to show an increase or decrease in total high school population. The change is then expressed as a percentage (for rural counties, -3.2 percent). This percent is multiplied by the smoothed 9th grade number and gives the enrollment for 12th grade while controlling for population changes (for rural counties in Texas—21,561)—this is called the “estimated 12th grade cohort.” Finally, the number of graduates in 2002 is divided by the estimated 12th grade cohort (21,561 for rural counties) and expressed as a percentage. The four-year graduation rate for Texas is 69.3 percent (68 percent for urban counties, 74.4 percent for micropolitan counties, and 79.8 percent for rural counties). These four-year graduation rates demonstrate that approximately 69 percent of Texas’ school children, and approximately 80 percent of Texas’ rural school children, that entered high school in the 1998-1999 school year earned a high school diploma at the end of the 2001-2002 school year.

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TEXAS’ LONGITUDINAL DROPOUT AND COMPLETION RATES This table shows the Texas Education Agency’s (TEA) longitudinal dropout and completion rates for Texas’ class of 2002 and was created using county level data from TEA. Graduation rates in rural Texas counties, at 88.4 percent, were greater than the state average, at 82.8 percent. Rural counties also have the lowest dropout rate, at 3.7 percent, compared to dropout rates of 4.9 percent in micropolitan counties and 5.1 percent in urban counties.

Source: Texas Education Agency

TEA longitudinal dropout and completion rates, grades 9-12, class of 2002

Continued

HS Cont., % Dropped out Drop., % Graduated Grad., % Received

GED GED, % Total

Number 18,607 8.6% 11,082 5.1% 177,409 82.2% 8,816 4.1% 215,914Urban Number in cohort 215,914 Number 1,147 6.0% 937 4.9% 16,274 84.6% 871 4.5% 19,229 Micro Number in cohort 19,229 Number 661 3.5% 700 3.7% 16,698 88.4% 838 4.4% 18,897 Rural Number in cohort 18,897 Number 20,415 8.0% 12,719 5.0% 210,381 82.8% 10,525 4.1% 254,040State Number in cohort 254,040

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ATTRITION RATES

Attrition Rates in Texas Education Service Center (ESC) Regions By Race-Ethnicity, 2002-03

Region Name Indian Asian Black White Hispanic Total Region I 46 23 65 24 47 46 Region II 27 23 39 21 40 34 Region III 62 ** 37 16 49 32 Region IV 25 13 48 26 58 42 Region V 38 22 40 21 50 29 Region VI 43 25 43 28 54 35 Region VII 29 ** 33 23 55 29 Region VIII 65 11 34 24 62 30 Region IX 51 ** 40 19 46 25 Region X 46 18 49 25 60 41 Region XI 34 29 47 30 58 38 Region XII 47 10 42 27 48 34 Region XIII 27 20 47 23 53 36 Region XIV 12 5 36 16 36 22 Region XV ** ** 50 15 40 29 Region XVI 29 1 45 15 45 26 Region XVII 40 6 25 8 34 22 Region XVIII 42 6 45 14 42 30 Region XIX 51 20 30 18 37 35 Region XX 54 18 39 23 45 38 Total 39 17 45 24 50 38 Source: Intercultural Development Research Association Notes: ** = Attrition rate is less than zero (0). . = The necessary data are unavailable to calculate the attrition rate. Calculation: Attrition is calculated by (1) dividing the high school enrollment in the end year by the high school enrollment in the base year; (2) multiplying the results from Calculation 1 by the ninth grade enrollment in the base year; (3) subtracting the results from Calculation 2 from 12th grade enrollment in the end year; and (4) dividing the results of Calculation 3 by the result of Calculation 2. The attrition rate results (percentages) were rounded to the nearest whole number.

The table above shows attrition rates by education service center region as calculated by the Intercultural Development Research Association (IDRA). According to the IDRA, “the formula for computing the longitudinal attrition rates consists of taking grade level enrollment for a base year and comparing these figures to grade level enrollment in subsequent (or end) year, with the assumption that a decline in the number of students enrolled constitutes the attrition rate for the school or district and that the cohort attrition rate is closely related to the annual dropout rate.” The attrition rates are much higher than the state’s dropout rates. The method of calculation is shown at the bottom of the table.

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Educational attainment 12.8 million of Texas’ approximately 21 million citizens are aged 25 and older. Nearly 11 million (or 86 percent of) people 25 and older live in urban counties. The other 1.8 million live in micropolitan and rural counties in roughly equal numbers (927,078, micropolitan; and 940,306, rural).

State: Highest level of educational attainment, by percent (2000)

0%

10%

20%

30%

40%

Urban Micro Rural State

Less than high school

High school

Some college orAssociateBachelor and higher

Source: U.S. Census Bureau

Urban areas have the smallest percentage of population 25 and older having less than a high school diploma (urban, 23.3 percent; micropolitan, 30.7 percent; and rural, 30.2 percent). Rural and micropolitan counties have roughly equal percentages of their population with less than a high school diploma. Rural counties have the largest percentage of population whose maximum educational attainment is high school graduation (rural, 33.4 percent; micropolitan, 29.7 percent; and urban, 23.7 percent).

State: Educational attainment (2000) Urban Micro Rural State Less than high school, % 23.3% 30.7% 30.2% 24.3% High school, % 23.7% 29.7% 33.4% 24.8% Some college or Associate, % 28.1% 25.2% 23.7% 27.6% Bachelor and higher, % 24.9% 14.4% 12.7% 23.2% Source: U.S. Census Bureau

While rural areas have the smallest percentage of citizens with some college or an Associate degree, the percentages for urban, micropolitan, and rural county types in this category are not too dissimilar (28.1 percent, urban; 25.2 percent, micropolitan; and 23.7 percent, rural). The Bachelor and higher category shows the widest disparity among the 25 and older population in the three county types. Rural and micropolitan counties have significantly smaller percentages of citizens with a Bachelor’s degree or higher educational attainment when compared to urban counties (urban, 24.9 percent; micropolitan, 14.4; and rural, 12.7).

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Between 1990 and 2000, total enrollment in rural counties grew at half the rate compared with urban counties. During the same time period, the percentage of high school graduates in Texas’ rural counties increased by nearly 12 percent compared with 3.5 percent in Texas’ urban counties. Today, rural and micropolitan Texans generally have less education and significantly less higher education than urban Texans. Nearly 70 percent of individuals 25 years and older that live in rural and micropolitan populations are high school graduates, while 13 percent in rural counties and 14 percent in micropolitan counties obtain a college degree. In contrast, 77 percent of urban Texans are high school graduates, with 25 percent obtaining a college degree.17 The economic impact of obtaining less education is clear.

U.S. average annual income by educational attainment (2000) No high school diploma $14,349 High school diploma $23,233 Associate degree $31,684 Bachelor's degree $45,648 Master's degree $56,958 Doctorate degree $87,644 Professional degree $99,207 Source: U.S. Census Bureau

According to the 2000 Census, the average annual income nationwide for a person with a high school diploma was $23,233; with an associate’s degree was $31,684; and with a bachelor’s degree was $45,648. From an economic standpoint, an increase in the number of rural and micropolitan Texans with advanced degrees will result in an increased tax base for the state of Texas. Improved educational attainment coupled with job creation in rural and micropolitan areas can bring success to those communities, reduce the outflow of youth from rural to urban and suburban areas, and decrease the erosion of rural tax bases.

17 Demographic and Socioeconomic Change in Rural Texas, Steve H. Murdock, Center for Demographic and Socioeconomic Research and Education, Department of Rural Sociology, Texas A&M University System

Educational characteristics of metropolitan counties and nonmetropolitan counties in Texas* Characteristic State Urban Counties* Rural Counties*

Total Enrollment, 2000 5,948,260 5,122,517 825,734 Percent Change, 1990-2000 23.8 25.7 13.0

Elementary and Secondary Students, 2000 4,007,073 3,398,749 608,324 Percent Change, 1990-2000 21.3 23.9 8.4

Percent High School Graduates, 2000 75.7 76.8 69.7 Percent Change, 1990-2000 4.8 3.5 11.9

College Students, 2000 1,202,890 1,080,576 122,314 Percent College Graduates, 2000 23.2 25.1 13.6

Percent Change, 1990-2000 13.7 13.6 18.3 Source: Center for Demographic and Socioeconomic Research and Education, Department of Rural Sociology, Texas A&M. *Based on the U.S. Office of Management and Budget’s former classifications of metropolitan and nonmetropolitan.

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Higher education

COMMUNITY COLLEGES There are 50 public community and junior college districts in Texas, 19 of which are located in rural Texas.18 Because community colleges have an open enrollment policy, they serve as a critical gateway to higher education for rural Texans. As Cohen and Brawer wrote in 1996’s The American Community College, “For thousands of students, the choice is not between a community college and another institution of higher education; the choice is between a community college and nothing.” Given adequate resources and funding, community colleges are regional economic development engines well positioned to adapt to and address the needs of local businesses. Today, community colleges are an integral part of community and economic development in rural Texas, but their mission is imperiled. Community colleges face a number of challenges, including shrinking tax bases, funding shortfalls despite higher tax rates than those experienced in urban areas, and the high cost of offering specialized or technical courses. Declining tax bases Tax bases have declined in rural Texas as businesses have closed and Texans have moved from rural areas to urban and suburban areas seeking employment. Limited tax bases have reduced opportunities for the improvement of existing rural community colleges and for the creation of new community colleges in rural Texas. If construction of Texas’ 19 rural two-year colleges were sought today, very few rural community colleges would have a tax base sufficient to meet the state requirement—a tax base of $2.5 billion. The diminished tax base in rural areas has made it increasingly difficult for existing rural community colleges to improve facilities or expand the number of courses offered. In 2002-2003, the total levy for community colleges in Texas was $815.4 million. Texas’ nineteen rural community colleges collected approximately $40.7 million. In other words, 38 percent of Texas’ community colleges collected just five percent of Texas’ community college levy. Funding shortfalls Some rural community college districts lack adequate resources even though the districts collect taxes at high rates. For example, Ranger College, which is considered rural, has one of the state’s highest tax rates but ranks lowest in revenue collected. In 2002-2003, Ranger collected $159,137 in levy. Laredo Community College, which is considered urban, collects at the same total tax rate as Ranger, but levied $14.7 million in 2002-2003.

Texas' urban and rural community colleges (CCs): Total valuation and levy Valuation 2002-03 Avg. total rate 2002-03 levy Rural CCs $28,879,960,768 0.17561 $40,744,033 Urban CCs $684,941,998,307 0.14838 $774,703,572 State CCs $713,731,959,076 0.15873 $815,447,606

Source: Texas Association of Community Colleges

18 Texas Higher Education Coordinating Board Strategic Plan, August 31, 2002, pg. 4

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Another factor is the size of a community college’s service area compared to its taxing area. Southwest Texas Junior College has a service area of 11 counties covering 13,500 square miles, which is an area larger than Maryland, Delaware, Rhode Island, and Washington D.C. combined. However, Southwest Texas’ taxing area consists of three counties. The other eight counties, which contain 75 percent of the population in the college’s service district, cannot contribute taxes.

Higher costs, fewer programs, lower enrollments Because rural institutions tend to have fewer students and offer fewer degree programs, the institutions receive less funding in the state’s formula funding process. Rural colleges are also at a disadvantage with regard to offering higher-cost technical programs because of factors such as lower overall enrollments, high equipment costs, and an absence of major industry. Because rural areas tend to have fewer available and qualified instructors than urban areas, rural community colleges often must offer full-time positions with benefits to attract and retain personnel, which leads to higher fixed administrative costs. 19 In contrast, community colleges in urban areas are able to employ instructors on a part time basis because urban areas have larger pools of qualified and available instructors. ENROLLMENT AT RURAL COMMUNITY COLLEGES Between fall 1998 and fall 2002, enrollment for all public community/junior colleges in Texas increased by 22.6 percent. During that same time period, enrollment at Texas’ 19 rural public community/junior colleges increased by 28.3 percent (from 58,216 students in fall 1998 to 74,668 students in fall 2002), while enrollment at Texas’ urban public community/junior colleges increased by 21.6 percent. Between fall 1998 and fall 2002, enrollment at Texas’ rural public community/junior colleges increased slightly (as a percentage of total enrollment) increased slightly from 14.3 percent to 15 percent of the state’s total enrollment.

Enrollment changes from fall 1998 to fall 2002 at Texas’ urban and rural public community/junior colleges (CCs)

College District Fall 1998 Fall 1999 Fall 2000 Fall 2001 Fall 2002 Change since 1998

Total enrollment at urban CCs 348,394 359,651 368,690 393,246 423,740 21.6% Total enrollment at rural CCs 58,216 60,423 63,244 67,990 74,668 28.3% Total enrollment at all CCs 406,610 420,074 431,934 461,236 498,408 22.6% Rural enrollment, % of total 14.3 14.4 14.6 14.7 15.0 0.7% Urban enrollment, % of total 85.7 85.6 85.4 85.3 85.0 -0.7% Source: Texas Higher Education Coordinating Board From fall 1998 to fall 2002, Navarro College District experienced the greatest percentage increase in student enrollments (47.2 percent), while South Plains experienced the greatest numerical increase (not shown) with an increase of 2,426 student enrollments.

19 House Select Committee on Rural Development, Interim Report to the 77th Texas Legislature, December 2000, pp. 61-63.

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Enrollment changes from fall 1998 to fall 2002 at Texas’ 19 rural community/junior colleges

College District Fall 1998 Fall 1999 Fall 2000 Fall 2001 Fall 2002 Percent Change, ‘98-‘02

Angelina 3,870 4,138 4,376 4,659 4,963 28.2 Blinn 10,481 11,297 12,025 12,686 13,806 31.7 Cisco 2,606 2,636 2,639 2,716 2,963 13.7 Clarendon 750 837 1,001 880 968 29.1 Coastal Bend 2,730 2,876 3,026 3,095 3,480 27.5 Frank Phillips 1,131 1,222 1,153 1,242 1,335 18.0 Hill 2,414 2,447 2,506 2,694 2,923 21.1 Howard 1,998 2,000 2,472 2,660 2,844 42.3 Kilgore 4,068 3,942 3,872 4,026 4,578 12.5 Navarro 3,375 3,539 3,989 4,411 4,967 47.2 Northeast Texas 2,045 1,956 1,990 2,203 2,423 18.5 Panola 1,504 1,520 1,422 1,492 1,693 12.6 Paris 3,068 2,894 2,936 3,278 3,639 18.6 Ranger 827 827 847 840 893 8.0 South Plains 6,568 7,116 7,432 8,512 8,994 36.9 Southwest Texas 3,526 3,427 3,716 3,723 4,326 22.7 Vernon 1,929 2,095 2,095 2,269 2,523 30.8 Western Texas 1,118 1,197 1,176 1,323 1,579 41.2 Wharton 4,208 4,457 4,571 5,281 5,771 37.1 Total 58,216 60,423 63,244 67,990 74,668 28.3

Source: Texas Higher Education Coordinating Board ENROLLMENT AT RURAL GENERAL ACADEMIC INSTITUTIONS Rural Texas has four general academic institutions: Sam Houston State University, Stephen F. Austin State University, Sul Ross State University, and Tarleton State University. Between 1997 and 2001, rural freshman enrollment at these institutions increased by 4.3 percent, outpacing overall freshman enrollment growth for rural universities, which remained relatively stagnant at 0.3 percent. During the same time period, despite rural freshman enrollment increases and total enrollment growth of 2.7 percent at rural universities, rural student participation as a percentage of total enrollments at rural universities declined from 41 percent to 38.5 percent. At non-rural universities, increases in rural freshman students, at 22 percent, outpaced overall freshman enrollments, at 19.5 percent. Sul Ross University, Tarleton State University, Angelo State University, West Texas A&M, and Texas A&M–Kingsville had the five highest ratios of rural students to general student population in Texas. Their ability to attract rural students may merit further study and support. TOTAL RURAL ENROLLMENT AND PARTICIPATION RATES In general, rural students appear to find higher education less accessible than urban students and participate at a rate of 3.4 percent of the general population, while urban students participate at a rate is 4.2 percent of the general population (The state average is 4.1 percent). In the fall 2001 semester 113,725 students, or 12.5 percent of the 909,083 total students enrolled in public institutions of higher education, were classified as rural. Although participation rates for rural students are lower than urban rates, enrollments by rural students generally outpaced overall enrollments between 1997 and 2001, especially at non-rural community colleges, which experienced an 18.2 percent growth in rural students as compared with 12.5 percent growth in non-rural students.

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INCREASED TUITION COSTS In fall 1987, tuition and fees at a Texas public university represented 3.9 percent of median household income. By fall 1998, such tuition and fees represented 7.4 percent of median household income. For 2003-2004, the state average for resident tuition and fees at a Texas public university is $3787. Using Texas’ 1999 median household income ($39,927), those tuition and fees would represent 9.5 percent of median household income. Using the three-year-average median household income for Texas for the years 2000-2002 ($40,659), those tuition and fees would represent 9.3 percent of the three-year-average median household income. Although all Texas families with children attending institutions of higher education have experienced increased educational costs, the differences in per capita income (urban, $29,198; micropolitan, $20,453; and rural, $20,512—year 2000) and median household income (urban, $41,744; micropolitan, $31,195; and rural, $30,173—year 1999) continue to make higher education expenditures more expensive for individuals from rural and micropolitan areas. At present, the long-range implications to rural Texans of tuition deregulation passed during the 78th legislative session are unclear. However, if the current proposal at The University of Texas at Austin is any indication (the proposal would increase tuition by 29.2 percent from fall 2003 to fall 2004), skyrocketing rates for tuition and fees may price many rural Texans out of higher education. TUITION AND FEES AT RURAL COMMUNITY COLLEGES Between the 1997-98 and the 2003-2004 school years, in-district tuition and fees at Texas’ rural community/junior colleges increased by five percent more than the state average. Out-of-state tuition and fees at Texas’ rural community/junior colleges, although well below the state average, showed the largest percentage increase from 73 percent of the state average during the 1997-1998 school year to 87 percent of the state average during the 2003-2004 school year.

Year Rural/Urban Public

Community or Junior Colleges, Average

In district, Total tuition

and fees In district,

SCH

Out of district,

Total tuition and fees

Out of district, SCH

Out of state, Total tuition

and fees Out of state,

SCH

Statewide rural avg. $347* $29 $460 $38 $656 $55 Statewide urban avg. $346 $29 $478 $40 $1,039 $87 State average $347 $29 $481 $40 $894 $74

1997-98

Avg. rural, % of state avg. 100% 100% 96% 96% 73% 74% Statewide rural avg. $559 $47 $756 $63 $1,025 $86 Statewide urban average $515 $43 $748 $62 $1,273 $106 State average $531 $44 $751 $63 $1,179 $98

2003-04

Avg. rural, % of state avg. 105% 106% 101% 100% 87% 87% Source: Texas Association of Community Colleges *Tuition and fee totals are calculated for a student enrolled for 12 semester credit hours including one laboratory course Notes: 1. All numbers rounded to the nearest dollar. 2. "/SCH" is the average tuition and fees per semester credit hour.

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TUITION AND FEES AT RURAL PUBLIC UNIVERSITIES This table shows that attending Texas’ rural public universities can represent a savings to students when compared to urban universities, particularly for costs such as off-campus room and board, which at rural universities is 84 percent of the state average.

2003-2004 Texas College Student Budgets Single Student Without Dependent, Off Campus, 9 Months: Full Time

University type

Resident tuition &

fees

Non resident tuition &

fees

Books & supplies

Room & board

Transport- ation

Personal expenses

Resident total cost

Non resident

total cost

Rural public university average $3,558 $10,640 $769 $4,833 $1,516 $1,602 $12,276 $19,359

Urban public university average $3,818 $10,955 $860 $5,883 $1,572 $1,767 $13,900 $21,037

Public university average $3,787 $10,918 $849 $5,759 $1,566 $1,748 $13,709 $20,840

Rural, % university average 94% 97% 91% 84% 97% 92% 90% 93%

Urban, % university average 101% 100% 101% 102% 100% 101% 101% 101%

Source: Texas Higher Education Coordinating Board

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HEALTHCARE Healthcare is important to state and regional economies, particularly in rural areas where it is a major employer second only to public schools. Furthermore, healthcare is an important component of economic development. Quality healthcare services and facilities help attract new businesses and healthcare providers to an area and retain existing businesses. Adequate healthcare in a community may be a critical factor for businesses and retirees. Having a local health-care delivery system in a rural county also contributes to the economic health of the community. It is well documented that businesses seek communities with an adequate health-care infrastructure when choosing a location. In addition, it is estimated that every health-care dollar spent in a rural area recycles through that community at least one and a half times. According to the Federal Office of Rural Health Policy, one rural physician generates more than five full-time jobs and $233,000 in local economic activity. Each time a citizen of a rural community leaves town for health-care, that is money lost to the community. 20

Access to care Individuals living in rural and remote areas face unique challenges in receiving timely, quality health care. Rural areas often suffer from shortages of healthcare providers, and the costs of providing quality healthcare in a rural health infrastructure often extend beyond available resources. Shortages of health facilities, physicians, nurses and other health care professionals in rural and isolated areas can result in individuals forgoing preventive medicine and necessary health treatment. Coupled with these shortages is the reality that many rural Texans face increased health problems associated with poverty, including high rates of chronic disease and infant mortality.21 Access to healthcare is a challenge for many rural Texans. For many, low levels of service provision, geographic isolation, higher costs and the lack of choice or “quality” all cause difficulty when trying to access healthcare. Access to healthcare issues in rural Texas is attributed to the short supply of physicians, nurses, other medical personnel, and hospitals or clinics. Barriers also include, but are not limited to, lack of health insurance, physical barriers such as transportation, social, cultural/language differences, and lack of information.

Healthcare professionals The recruitment and retention of healthcare professionals are essential to many communities. There is a shortage of most types of healthcare professionals in most rural communities of Texas. Rural areas of the state face healthcare challenges. A primary example is access to healthcare. Recruiting and retaining a sufficient workforce in rural communities is dependent on factors such as: existing well-trained providers, access to services, adequate facilities, and the quality of care. The distribution of health care professionals in rural and small communities of Texas can improve access to healthcare and also improve one’s economic and community development.

20 House Select Committee on Rural Development, Interim Report to the77th Legislature, December 2000, p. 60. 21 United States Department of Health and Human Services, HHS Programs to Protect and Enhance Rural Health, March 2004.

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NURSING SHORTAGE Texas faces an acute shortage of nurses, as well as an aging nursing workforce. The average age of registered nurses in Texas today is 44, and within the next 10 to 15 years, Texas will lose a substantial portion of its RN workforce to retirement.22 Since nurses are essential to accessible health services and patient care, the current shortages of nurses may lead to reduced access to healthcare services and possible decreases in the quality and safety of care.23 Nursing shortages impact patient’s care and a hospital’s ability to function properly. The rate of RNs per 100,000 population in Texas is well below the national average.24 The shortage of faculty in nursing schools is continuing and expanding the nursing shortage and also affecting the number of new enrollments. Several factors contribute to the shortage including: the baby boomers which are increasing demands for healthcare as they approach retirement; an aging nursing workforce; and a possible decline in interest in nursing as a career. The limited nursing school slots makes the issue even more challenging. While nursing school admission standards should not be lowered, additional resources and flexible faculty positions at nursing schools could go a long way to easing the current nursing shortage.25

State: Number and ratio26 of healthcare professionals (2002)

Primary Care Physicians (PCPs)27 Dentists Pharmacists

Licensed Psychologists

and Counselors Registered Nurses

(RNs)

Number Ratio Number Ratio Number Ratio Number Ratio Number Ratio

Urban 13,165 73.36 6974 38.86 14,350 79.96 12,035 67.07 126,522 705.07Micro 842 56.52 366 24.57 776 52.09 694 46.59 7389 496.05Rural 872 61.50 395 27.86 909 64.11 282 19.89 7183 506.67State 14,879 71.1 7735 36.70 16,035 76.2 13,028 62.48 141,094 670.1

Source: Texas Department of Health • Eighty-eight percent of the PCPs in Texas were in urban counties. The ratio of PCPs in urban

counties was above the state ratio—(urban, 73.36; state 71.1). • Ninety percent of the dentists in Texas were in urban counties. The ratio of dentists in urban counties

was higher than the state ratio for dentists—(urban, 38.86; statewide, 36.70). • Eighty-nine percent of all pharmacists were in urban counties. Urban counties in Texas were well

above the state ratio of pharmacists—(urban, 79.96; state, 76.2). • Ninety-two percent of all licensed psychologists and counselors were in urban counties. Urban

counties in Texas were above the state ratio—(urban, 67.07; state, 62.48). • Ninety percent of all RNs were in urban counties. Urban counties in Texas were above the state ratio

for RNs (urban, 705.07; state, 670.01).

22 The Business Health Care Report Nursing Shortage: Part 1, June 2001. 232003-2004 Texas State Health Plan Update: Ensuring a Quality Health Care Workforce for Texas, October 2002. 24 2003-2004 Texas State Health Plan Update: Ensuring a Quality Health Care Workforce for Texas, October 2002. 25 http://www.nurse.com/NurseContent/Community/NurseCommentary/SchoolShortage.htm 26 Ratio for healthcare professionals is per 100,000 population. 27 Primary Care Physicians include general practitioners, family practitioners, internal medicine and pediatricians.

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DENTISTS-STATEWIDE

6600

6800

7000

7200

7400

7600

7800

1998 1999 2000 2001 2002

PHARMACISTS-STATEWIDE

14,200

14,400

14,600

14,800

15,000

15,200

15,400

15,600

15,800

16,000

16,200

1999 2000 2001 2002

REGISTERED NURSES-STATEWIDE

020,00040,00060,00080,000

100,000120,000140,000160,000

1993

1994

1995

1997

1998

1999

2000

2001

2002

Source: Texas Department of Health Source: Texas Department of Health CURRENT STATUS OF RESOURCES—HEALTHCARE PROFESSIONALS In 2003, the state of Texas had 24 rural or micropolitan counties with no primary care physician; 19 had only one primary care physician; and 22 had only two primary care physicians. There were 61 rural or micropolitan counties without hospitals; 13 without pharmacists; and 40 without dentists. Although programs and services exist to aid the shortages of healthcare professionals, rural communities still suffer from lack of resources, as well as, providers. In order to reduce the number, communities must get children interested in health professions while they are young, a “Grow Your Own Program.” It is essential to continue encouraging and supporting them once they’ve chosen to enter a profession; and lastly, retaining them in the community. Programs such as the Physician Education Loan Repayment Program is administered by Texas Higher Education Coordinating Board to recruit and retain qualified physicians to provide primary health care in medically underserved areas of Texas. The maximum annual award is $9,000. Awards are limited by availability of funds. Physicians may apply annually for up to five years.

PRIMARY CARE PHYSICIANS-STATEWIDE

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

1993 1995 1997 1999 2001

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Staffed hospital beds

Staffing ratios is an important component of overall access to care. The number of staffed beds is an important healthcare indicator, which is dependent upon the number of healthcare providers available. Staffed beds are licensed and/or operational beds for which there is staff on hand to attend to the patient who occupies the bed. There is a correlation amongst the number of staffed beds and healthcare providers available to tend to patients, which demonstrates the importance of access, as well as, the recruitment and retention of healthcare providers.

State: Staffed Beds per 100,000 Population (1999)

284225

292288

050

100150200250300350

Urban Micro Rural State

Staffed Beds per100,000Population

Source: Texas Department of Health Texas’ urban and micropolitan counties had slightly more staffed beds per 100,000 population than the state average in 1999—urban, 288; micropolitan, 292; state; 284. Urban counties in Texas also had a total of more staffed beds than other county types—urban, 49,611; micropolitan, 4,257; rural, 3,125. CRITICAL ACCESS HOSPITALS Sustaining access to healthcare services is essential for rural areas. In rural areas where “adequate” staffing of well-trained healthcare professionals is often a key barrier to access of care, the Critical Access Program (CAH) may provide flexibility to mitigate the problems. For example, as a critical access hospital, the hospital may staff a physician assistant or an advanced nurse practitioner as long as a physician is on call and available to come to the hospital 24 hours per day, seven days per week. The CAH designation is available to hospitals that meet certain federal and state criteria and is designed to provide an alternative model to allow small rural hospitals to remain viable. This allows for increased service and staffing flexibility and increased reimbursement from Medicare. Critical access hospitals were created by Congress to improve the delivery of health care in rural areas of the nation, and have a preferential reimbursement system under Medicare as a result.

Uninsured population One out of every four Texans lacks health insurance, the highest percentage of uninsured residents in any state in the nation, according to new Census Bureau figures. In 2002, the estimated percentage statewide of those individuals under age 65 that were uninsured was 23.6 % or 4,566,601. Health insurance is unaffordable for most uninsured families, so paying for medical care is also a great burden. Consequently, the uninsured are four times more likely to report going without needed care, and three

State: Number and Ratio of Staffed Beds (1999)

Staffed Beds per 100,000 Population

Total Staffed Beds

Urban 288 49,611

Micro 292 4,257

Rural 225 3,125

State 284 56,993

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times more likely to report problems paying for care when they get it. Moreover, those in the poorest health are least likely to access care.28 Since health insurance is generally available through employers, it is a logical assumption that higher unemployment rates would indicate higher levels of uninsured individuals and families. However, employment may not be the key factor regarding the availability and/or affordability of health insurance. According to The Perryman Group, almost half of the workers in Texas are not covered by health insurance, and three-fourths of uninsured Texas families are headed by a full-time worker (the highest percentage of any state in the country).29 The number and percentage of people covered by employment-based health insurance is declining overall. At the national level, 61.3 percent of individuals were covered by employment-based plans in 2002, a drop from 62.6 percent in 2001. During this time frame, Texas experienced a 1.4 percent increase statewide in the rate of uninsured, probably partially due to a decline in employer-based plans.30

Source: Health and Human Services Commission

State: Percentage of Uninsured Population, 2002

13.7%

27.3%

16.6%

34.5%

16.3%

33.3%

14.0%

28.2%

0%

10%

20%

30%

40%

Estimated Percent Uninsured UnderAge 19

Estimated Percent Uninsured Ages 19- 64

UrbanMicroRuralState

28 Rowland, Diane and Patricia Seliger Keenan. “The Uninsured: An Old Problem Encounters New Pressures,” Healthcare Forum Journal, January/February, 1998, pp.43-45. 29 “Texas, Our Texas: An Assessment of Economic Development Programs and Prospects in the Lone Star State,” The Ray Perryman Group, November 2002. 30 U.S. Census Bureau, “Health Insurance Coverage in the United States: 2002,” September 2003.

State: Estimate of Uninsured, 2002

Population Under 19

Estimated Uninsured

Under Age 19

Estimated Percent

Uninsured Under Age 19

Population Ages 19 - 64

Estimated Uninsured

Ages 19 - 64

Estimated Percent

Uninsured Ages 19 - 64

Urban 5,452,680 744,396 13.7% 11,260,166 3,071,990 27.3% Micro 395,470 65,496 16.6% 820,102 283,290 34.5% Rural 467,300 76,108 16.3% 977,310 325,321 33.3% State 6,315,450 886,000 14.0% 13,057,578 3,680,601 28.2%

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Micropolitan and rural counties in Texas were above the state average for the estimated percentage of uninsured for both age groups. The estimated percentage of uninsured under 19 years of age for rural and micropolitan counties was 16.60% for micropolitan and 16.30% for rural. Those 19-64 years of age for rural was 34.50% and micropolitan 33.30%.

Current status of health programs and services A strong healthcare system makes for a healthier work force, provides jobs for high-skill workers, and enhances a community’s level of quality of life. One of the biggest healthcare issues in rural Texas is the short supply of physicians, nurses, other medical personnel, and hospitals or clinics. 31 Since healthcare plays a large factor in a business or individual relocating to a community, it is imperative infrastructure exists to maintain its population. The Critical Access Hospital program has improved financial viability and stability for many hospitals, thus providing to be a practical and effective model. The goal of this program is to assure access to quality medical care in rural areas. A critical access hospital is an alternative for small, rural hospitals, creating the potential for enhanced reimbursement from Medicare, as well as, an opportunity to better match the local community's needs to the hospital's capabilities, and the foundation of a rural health network. If this model works for hospitals, it could also be feasible for EMS, home health, and long-term care, etc. in those areas where distance, low volume, and human and financial capital are often barriers. Perhaps, this model might address some of the needs of rural communities and identify their roles as an integral component of their communities. In addition, this model assists healthcare providers to realize they are the key to providing quality, accessible health care for all Texans. It is increasingly evident that traditional approaches to addressing access to care in rural areas may not always work; perhaps it is time to try a non-traditional method. Is it possible for school nurses, long term care facilities, home health agencies, licensed professional counselors, and others are capable of addressing access to quality healthcare? Is it possible that non-traditional methods exist, but no one has changed their way of thinking for it to occur? There could be roles that existing providers or facilities might perform to address the needs of their communities. Is it time to collectively consider new models? It is very feasible by thinking differently, a solution to the future might be staring us in the face. PUBLIC HEALTH According to Texas Department of Health (TDH), of the 254 counties in Texas, only 61counties are covered by local health departments since 4 counties in Texas are served by more than one local health department (Tarrant; Harris; Dallas; and Jefferson). Texas Department of Health (TDH) is divided into 11 public health regions, which are overseen by eight public health regional directors. Each region has a certain number of "full service local health departments." These facilities receive TDH funding. The "nonparticipating local health departments" exist through local taxes and whatever other sources of funding they might find. All public health services within the state rely on a variety of grant programs to stay alive.” Most rural communities often lack the infrastructure to maintain a public health department and there is no tax base to support such a facility, therefore, fewer public health providers are in rural areas due to these barriers. For many rural communities, public health facilities are the only source of patient care provided for the uninsured.

31 “The Main Street Economist: Bridging the Gap in Rural Healthcare,” September 2003.

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IMMUNIZATIONS Texas ranked 42nd in the nation in vaccinating its young children ages 19-35 months.32 When immunization levels drop, the rate of disease rises.33 In July 2003, Gov. Rick Perry signed an executive order directing the Texas Department of Health (TDH) to expedite implementation of a statewide plan to increase childhood immunization rates in Texas. Included in this order were directives for TDH to work with community partners to initiate a back-to-school campaign urging immunization of students, developing a bilingual statewide public awareness campaign, and appointing First Lady Anita Perry, as the TDH spokesperson. TEXAS MEDICAID Health and human service expenditures are second only to education within the Texas budget. During the 78th Regular Legislative Session, several budget cuts were made to Texas’ Medicaid program that will have an impact on recipients. Below are changes and possible impacts, according to the Texas Medical Association: Reduction of Medicaid coverage for adult pregnant women from 185 percent of federal poverty to 158 percent. Impact: Approximately 8,000 women will lose prenatal care. The number does not include the impact of legal and illegal immigrant women who no longer will qualify for emergency Medicaid for the delivery of their babies. Elimination of Medicaid medically needy spend-down program. Impact: At least 9,959 severely ill adult patients will not be eligible for Medicaid once they “spend down” their income to 17 percent of poverty. The number does not include the impact to legal and illegal immigrant patients who qualify for emergency Medicaid as a result of extreme illness. Retain six months continuous eligibility for children’s Medicaid. Impact: Assures continuous and better care for low-income children. TMA, together with the Texas Pediatric Society and Texas Academy of Family Physicians, vigorously advocated retaining this provision within Medicaid. TMA helped enact continuous eligibility in 2001 when the legislature passed Senate Bill 43 to simplify children’s Medicaid. The budget and related legislation freeze Medicaid continuous eligibility at six months rather than going to 12 months coverage in June of this year. The freeze will allow the legislature to revisit the issue in 2005. Reduction of graduate medical education funding by $41.6 million. Impact: It is not known how this measure will affect direct patient, yet the reduction in funding undoubtedly will strain Texas’ ability to train the next generation of physicians and provide indigent care by physician residents. Elimination of most “optional” Medicaid services for adults. Impact: HB1 eliminates adult Medicaid patients’ coverage for podiatric care, chiropractic, mental health counseling, hearing aids, and eyeglasses. Approximately 175,000 patients, most of whom are elderly and disabled, will lose coverage.34

32 Texas Department of Health. "Rider 45: Report to the Legislative Budget Board and the Governor on Plans to Increase Immunization Rates in Texas." September 30, 2002. http://www.tdh.state.tx.us/immunize/rider45.htm. 33 http://www.texmed.org/has/prs/iin/immunization_policypaper.asp#One 34 http://www.texmed.org/pmt/lel/cln/com03/hcf.asp#Highlights

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HOUSING CHARACTERISTICS

Housing units In 2000, Texas had a total of 8.15 million housing units, 6.88 million in urban counties, 608,193 in micropolitan counties, and 666,336 in rural counties. Rural and micropolitan counties had more vacant housing units relative to the total number of units than the urban counties. Rural counties had the highest percentage of vacant units: 20.8 percent. Although urban counties had the most housing units without complete plumbing, rural counties had the highest percentage of units without complete plumbing (3 percent) compared to micropolitan counties (2 percent) and urban counties (1 percent). Housing is estimated to be growing significantly faster in urban counties than in rural and micropolitan counties. Rural counties have the slowest growth rate: 1.29 percent from 2000 to 2002.

State: 2000 housing units State: 2002 estimated housing units 2000

population Total Vacant Units without

complete plumbing

Total Percent change from 2000

Urban 17,944,548 6,883,046 537,918 70,308 7,209,286 4.74% Micro 1,489,577 608,193 87,533 12,846 617,831 1.58% Rural 1,417,695 666,336 138,770 20,084 674,943 1.29% State 20,851,820 8,157,575 764,221 103,238 8,502,060 4.22%

Source: US Census Bureau

State: Percentage of units lacking complete plumbing (2000)

Total units Units lacking

complete plumbing Percentage Urban 6,883,046 70,308 1.02%

Micro 608,193 12,846 2.11%

Rural 666,336 20,084 3.01%

State 8,157,575 103,238 1.27%

Source: US Census Bureau

Statewide, more than100,000 housing units lackcomplete plumbing. Ruraland micropolitan countieshave a higher percentageof units without completeplumbing than the urbancounties.

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Homeownership The statewide home-ownership rate was 63.8 percent in 2000. Rural counties had the highest percentage of homeowners (77.09 percent) followed by the micropolitan counties (71.39 percent). The urban counties had the highest percentage of renters, with only 62.08 percent of housing units occupied by homeowners.

State: Occupied housing units, by type (2000)

0%10%20%30%40%50%60%70%80%90%

100%

Metro Micro Rural State

Renter-occupiedOwned

Source: US Census Bureau

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Telephone service Citizens living in rural counties, whether they rent or own, are most likely among Texans to lack telephone service. Overall, 5.2 percent of occupied housing units in rural counties lack telephone service; 4.7 percent in micropolitan counties lack telephone service; and 2.9 percent in urban counties lack telephone service.

State: Occupied housing units without telephone service (2000) Availability of telephone Urban Micro Rural State Owner: No telephone 1.4% 2.8% 3.3% 1.6% Renter: No telephone 5.4% 9.6% 11.7% 5.9% Total: No telephone 2.9% 4.7% 5.2% 3.2% Source: U.S. Census Bureau

Owners, in all county types and on a statewide basis, are more likely than renters to have telephone service. 1.6 percent of owners in Texas lack telephone service, while 5.9 percent of renters in Texas lack telephone service.

State: Occupied housing without telephone service, by type and percent (2000)

0%2%4%6%8%

10%12%14%

Urban Micro Rural Total

Owner: No telephoneRenter: No telephoneTotal: No telephone

Source: U.S. Census Bureau

In Texas, renters in rural areas are the group least likely to have phone service. 11.7 percent of renters in rural counties lack telephone service (9.6 percent in micropolitan; 5.4 percent in urban).

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OIL AND GAS PRODUCTION Texas is the nation’s leading producing state of crude oil and natural gas. The value of Texas oil and gas production in 2002 was approximately $25 billion: roughly $16 billion of that was natural gas and near $9 billion was crude oil.35 During 2002, Texas produced 366 million barrels of crude oil, or almost 20 percent of the U.S. total, and 5.8 billion Mcf of natural gas, or 26 percent of the U.S. total.36 In 2001, the oil and gas industry employed more than 500,000 Texans and pumped more than $75 billion into the state’s economy. Rural counties accounted for 75 percent of the state’s oil and gas production in 1999. In almost one of every three Texas counties, oil and gas constitute at least 20 percent of the property tax base, and in one of every eight counties, it accounts for over 50 percent of the tax base.37 In 2002, some amount of oil and gas was produced in 199 of Texas’ 254 counties38:

• 89 counties produced over $100 million of oil and gas, • 15 counties produced over $500 million of oil and gas.

Oil and Gas Production in Texas

Source: TTARA Research Foundation

35 Oil, Gas and Chemicals in the Texas Economy, TTARA Research Foundation, November 2003. 36 Texas Railroad Commission. 37 House Select Committee Report on Rural Development, Interim Report to the 77th Texas Legislature, December 2000. 38 Texas Railroad Commission.

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PUBLIC SERVICES

Criminal Indigent Defense The 77th Legislature passed SB 7, which relates, in part, to the appointment and compensation of counsel to represent indigent persons accused of a crime. The provision of the services as set forth by this bill has placed a fiscal burden on many counties in Texas including the state’s smaller, rural counties. Many county officials are concerned about their ability to maintain other services while implementing this state mandate. Some counties cite difficulties in determining whether a person qualifies for indigent defense, which may increase county spending. Other counties have experienced difficulty in providing legal counsel within the timeframe established by law. According to the 2002 report, Quality of Initial County Plans Governing Indigent Defense in Adult Criminal Cases,39 which analyzed plans from 95 counties containing 90 percent of Texas’ population, many counties were not initially successful in implementing the bill’s provisions. Two-thirds of the county plans examined had either a significant shortcoming in one or two core requirements or fell well short of the requirements outlined in SB 7. Since that time, according to the Task Force on Indigent Defense (task force), much progress has been made and all counties have submitted plans to the task force covering each court level.40 The task force has also provided fiscal assistance to counties through its grant program to help pay some of the increased costs associated with providing indigent defense services. This grant process has been coupled with a process of review of county indigent defense plans and assistance to counties in meeting two of SB 7’s core requirements—prompt access to counsel and procedures for payment for indigent defense services. Prompt access to counsel was the focus of the initial round of grants in FY2002, and the task force’s review process dealt with meeting the three statutory requirements for prompt access to counsel. In FY2002, approximately $7.3 million in grants were awarded to Texas counties. Grants in FY2003 focused on procedures for payment for indigent defense services and the task force’s review process dealt with establishing an attorney fee schedule, attorney fee vouchers, and procedures for payment of expenses, including investigators and expert witnesses. In FY2003, approximately $10.8 million in grants were awarded to Texas counties. By the end of FY2003, 253 of Texas’ 254 counties had met the requirements of SB 7 in both categories.

39 The report produced by the Equal Justice Center and Texas Appleseed was released in March 2002, shortly after SB 7 took effect on January 1, 2002, and was issued prior to the hiring of any staff by the Task Force on Indigent Defense. 40 All of these plan documents, including forms, are available on the Task Force’s website—http://www.courts.state.tx.us/tfid.

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Statewide spending for criminal indigent defense increased by approximately $20 million between 2001 and 2002. At the state level, all county types (urban, micropolitan, and rural) experienced increased costs for criminal indigent defense. Total court expenses include attorney fees, investigative expenditures, expert witness expenditures, as well as other litigation expenses. Between 2001 and 2002, at the state level, total court expenses increased by $20,018,577 or 24.5 percent (urban, 25 percent; micro, 22.2 percent; rural, 19.6 percent). Between 2001 and 2002, at the state level, attorney fees increased by $15,321,855 or 20.6 percent (urban, 20.8 percent; micro, 21.8 percent; rural, 17.2 percent).

Prison Construction From 1988 to 2000, the Texas Legislature appropriated $2.3 billion to construct facilities for over 108,000 prison beds. Rural counties across Texas successfully attracted prison construction by offering land, utilities, easements, and other amenities. Because of the efforts of rural counties, a majority of these prisons were built in rural Texas. In fact, more than 40 prison units were opened in cities with populations under 30,000. Currently, 66 of Texas’ 114 prisons are located in rural Texas.41 The employment and payroll of a state prison unit can range from 140 employees with an annual payroll of $4.2 million to 800 employees with an annual payroll of $22 million. Prisons have provided needed jobs in many rural Texas communities, while neighboring communities and the region surrounding a prison may receive increased economic benefits. However, some factors have minimized positive economic impacts, including: • the cost of connecting prisons to utility services, and • a lack of housing in communities that have successfully attracted prison construction, which may

reduce the prison’s positive impact on local property tax revenue and limit a community’s ability to house prison employees that are new to the area.

An unintended consequence of locating prisons in rural areas of the state has been an increased caseload for judges in those areas. For example, when an inmate housed in a rural area alleges mistreatment that can result in a civil tort case for damages or injuries, the rural district judge in that area has oversight under basic civil venue rules. During the 74th Legislative Session, Section 14.003, Civil Practice and Remedies Code, was added which permits judges to dismiss frivolous or malicious claims. However, the time spent judging the merit of inmate claims can place an additional burden on rural Texas’ already burdened courts. To date, Texas’ rural judges have handled these cases without additional resources.

41 Based on the U.S. Office of Management and Budget’s (OMB) 1993 definitions of “metropolitan” and “nonmetropolitan.” Analysis was conducted prior to OMB’s 2003 definitional changes.

State: Criminal indigent defense expenditures Urban Micro Rural Total Population, 2000 17,944,548 1,489,577 1,417,695 20,851,820 Baseline Attorney Fees, 2001 $64,599,321 $5,084,046 $4,703,863 $74,387,230Attorney Fees, 2002 $78,003,203 $6,192,595 $5,513,286 $89,709,085Attorney Fees, Change in % (01-02) 20.75% 21.80% 17.21% 20.60% Attorney Fees, Change in $ (01-02) $13,403,882 $1,108,550 $809,423 $15,321,855

Baseline Total Court Expenses, 2001 $70,968,764 $5,636,142 $5,179,944 $81,784,849Total Court Expenses, 2002 $88,720,829 $6,889,169 $6,193,408 $101,803,406Total Court Expenses, Change in % (01-02) 25.01% 22.23% 19.57% 24.48% Total Court Expenses, Change in $ (01-02) $17,752,066 $1,253,027 $1,013,465 $20,018,557 Source: Texas Task Force on Indigent Defense

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TAX BASE

Property values and deductions In 2002, property in Texas had a total taxable value of nearly $1.02 trillion. Nearly 88 percent of total taxable value comes from urban Texas; 5.6 percent from micropolitan Texas; and 7 percent from rural Texas. Urban Texas has slightly more than 86 percent of the state’s population, while micropolitan and rural Texas each have approximately 7 percent of the state’s population.

State: Population and tax base, percentages

2000 population % population % tax base

Urban 17,944,548 86.1% 87.4% Micro 1,489,577 7.1% 5.6% Rural 1,417,695 6.8% 7.0% State 20,851,820 100% 100%

Source: U.S. Census Bureau (2000) and Texas Comptroller of Public Accounts (2002)

State: Total taxable value (2002) Urban Micro Rural State Property value subtotal $1,014,473,172,205 $65,644,334,401 $80,033,143,196 $1,160,150,649,802 Total deductions $127,351,429,297 $8,618,566,339 $8,994,631,385 $144,964,627,021 Total taxable value (TTV) $887,121,742,908 $57,025,768,062 $71,038,511,811 $1,015,186,022,781 Source: Texas Comptroller of Public Accounts

Single-family residences constitute the biggest property class in Texas, at 47.2 percent, and for urban Texas, at 50.2 percent, and micropolitan Texas, at 32.3 percent. Oil, gas, and minerals constitute the largest property class in rural Texas, at 27 percent, with single-family residences next, at 22 percent.

State: Property classification (2002) Urban Micro Rural State

A Single family residences 50.2% 32.3% 22.0% 47.2% B Multi-family residences 5.2% 1.3% 0.4% 4.6% C Vacant lots 2.3% 1.8% 2.0% 2.2% D Rural real (Taxable) 2.8% 12.3% 19.5% 4.5% F1 Commercial real 15.8% 7.3% 4.5% 14.6% F2 Industrial real 5.7% 11.5% 6.0% 6.1% G Oil, Gas, Minerals 1.1% 12.8% 27.0% 3.5% J Utilities 2.8% 7.2% 9.4% 3.5% L1 Commercial personal 8.0% 5.0% 2.8% 7.5% L2 Industrial personal 4.5% 7.0% 5.2% 4.7% M Other personal 0.4% 1.0% 0.8% 0.5% N Intangible personal & uncertified 0.5% 0.0% 0.0% 0.5% O Residential Inventory 0.4% 0.1% 0.1% 0.4% S Special inventory 0.3% 0.2% 0.2% 0.3%

Source: Texas Comptroller of Public Accounts

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The state mandated homestead exemption represents the largest percentage of deductions at the state level (43.7 percent) and for all three county types (urban, 42.2 percent; micro, 53.1 percent; and rural, 56.1 percent). The over-65 assigned freeze loss is the second largest percentage of deductions at the state level (24.3 percent) and for all three county types (urban, 24.6 percent; micro, 21.9 percent; and rural, 21.6 percent).

State: Deductions (2002) Urban Micro Rural State

State Mandated Homestead (15,000) 42.2% 53.1% 56.1% 43.7% Over 65 Homestead (10,000) 6.9% 11.1% 12.5% 7.5% Disabled Veterans and/or surviving spouse 0.8% 1.0% 1.1% 0.9% Over 65 Assigned Freeze Loss 24.6% 21.9% 21.6% 24.3% Abatement Exemptions 0.1% 0.0% 0.1% 0.1% Tax Increment Finance Exemptions 3.3% 0.1% 0.0% 2.9% Freeport Exemptions 7.6% 3.8% 0.6% 6.9% Pollution Control Exemptions 3.4% 5.0% 3.4% 3.5% Deferred Payment Homestead Exemptions 0.3% 0.2% 0.1% 0.3% Other Exemptions--Solar and Wind 0.2% 0.0% 0.0% 0.2% Assigned 10% Capped value loss 10.6% 3.7% 4.5% 9.8% Source: Texas Comptroller of Public Accounts

Sales tax Gross sales of $172.5 billion for the first quarter of 2003 represented an increase of 7.9 percent compared to the same quarter a year earlier. Statewide, 27.6 percent of gross sales (products and services) were subject to the state sales and use tax: a total of $47.6 billion taxable sales for the quarter.

State: sales tax base42 1st quarter 2003 Sales subject to state sales & use tax

Number of outlets reporting Gross sales

% change from 1st qtr 2002 Amount Percent

Urban 400,533 $158.7 billion 7.8% $44.2 billion 27.8% Micro 30,461 $8.1 billion 10.4% $2.1 billion 26.1% Rural 31,489 $5.7 billion 5.4% $1.37 billion 23.9% State 462,483 $172.5 billion 7.9% $47.6 billion 27.6%

Source: Texas Comptroller of Public Accounts

42 Reflects sales reported by outlets inside Texas. Does not reflect sales by businesses that sell only goods outside the sales tax base nor out-of-state outlets (which reported an additional $6.2 billion of sales subject to state sales and use taxes). Totals for the first quarter of 2003 vary slightly from data published by the Texas Comptroller of Public Accounts because the comptroller updates sales tax data files five to six months after the close of a quarter, after a verification process. These updates occurred after the county-level data were analyzed for this report.

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TELECOMMUNICATIONS Telecommunications data are not generally available on a county-by-county basis. However, because this issue is critical to the future of rural Texas, a comprehensive statewide section follows.

Competition in Rural Texas The Public Utility Commission of Texas (PUC) noted in its 2001 Scope of Competition in the Telecommunications Markets Report (Scope Report) that competition in rural areas of Texas was very limited. In PUC’s 2003 Scope Report it notes that competition in rural areas of Texas is increasing and that, as of June 2002, competitive local exchange carriers (CLECs) served 16 percent of local customers in rural areas, as compared with 13 percent in suburban and 16 percent in urban areas.43 In fact, CLECs serve the same percentage of customers in rural and urban areas (16 percent) and a smaller percentage in suburban areas (13 percent). When looking at absolute numbers, CLECs serve far fewer lines in rural areas than in urban and suburban areas and have purchased more lines in urban areas. As the Scope Report notes, “this could be attributed to high investment costs and small customer bases in rural areas, resulting in smaller profit margins.”44 Although competition has increased in rural areas, the Scope Report is quick to point out that the sustainability of competition is unclear.

Source: Texas PUC 2003 Scope of Competition Data Responses

State: Total access lines by geography

Rural Suburban Urban Total ILEC 2,918,097 2,287,050 6,145,547 11,350,694 CLEC 564,413 330,484 1,182,759 2,077,656 Total 3,482,510 2,617,534 7,328,306 13,429,159

Source: Texas PUC 2003 Scope of Competition Data Responses. The CLEC line total excludes 809 access lines for which exchange information was not provided by the carrier.

43 p. xi, 2003 Report on the Scope of Competition in the Telecommunications Markets 44 p. 25, 2003 Report on the Scope of Competition in the Telecommunications Markets

84%

16%

87%

13%

84%

16%

85%

15%

0%

20%

40%

60%

80%

100%

Rural Suburban Urban Total

ILEC vs. CLEC lines in Texas by geography, as of June 30, 2002

ILECCLEC

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CLEC Entry Strategies The Scope Report shows that the most common entry strategy used by CLECs in rural areas is to use their own facilities.45 The second most common entry strategy used by CLECs in rural areas (and most common in urban and suburban areas) is to use unbundled network elements (UNEs), which are facilities and equipment leased from incumbent local exchange carriers (ILECs). UNE-Platform or UNE-P is the provision of local service entirely through the ILECs UNEs and UNE-Loop or UNE-L indicates that the CLEC uses the ILEC’s local loops or “last mile,” but that the CLEC provides some of its own facilities. According to the Scope Report, CLECs serve 23 percent of business customers in rural areas; 17 percent in urban; and 12 percent in suburban.

Source: Texas PUC 2003 Scope of Competition Data Responses

Source: Texas PUC 2003 Scope of Competition Data Responses

45 The urban group consists of exchanges that have a population of more than 100,000. (14 exchanges). The suburban group consists of exchanges that have a population of more than 20,000 but less than 100,000 (57 exchanges). The remaining 1092 exchanges were classified as rural, and were under 20,000 in population.

CLEC Lines by Entry Strategy and Geography in Texas Facilities TSR UNE-L UNE-P Total

Rural 269,300 71,684 3,036 220,393 564,413 Suburban 51,681 40,877 23,615 214,311 330,484 Urban 102,741 124,401 186,345 769,272 1,182,759

0%10%20%30%40%50%60%70%

Rural Suburban Urban

CLEC lines by geography and by entry strategy in Texas, as of June 2002

FacilitiesTSRUNE-LUNE-P

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Broadband “While the availability of advanced services continues to increase, a continuing challenge for Texas is how to encourage widespread deployment and adoption of these services, especially in rural areas of the State. Factors such as population density, income levels, and distance challenges may lead to slower rates of deployment in these areas.” 2003 Report on the Scope of Competition in Telecommunications Markets in Texas

The development of broadband infrastructure and the availability of high speed Internet access are critical to economic development in rural Texas. Today, modern telecommunications services should be considered basic infrastructure to which all citizens should have affordable access. Importantly for Texas’ economy, the digital divide that separates rural Texans from urban and suburban Texans decreases the ability of rural communities to diversify their current economic base or transition to a new one. Texas’ statewide economy and tax rolls will benefit greatly from an increased presence for rural Texas on the Internet, as rural Texans broaden their markets and more effectively offer their vast array of agricultural, business, entrepreneurial, commercial, ranching, tourism, and recreational goods and services. Affordable and universal rural broadband access is necessary because many modern businesses require access to high speed Internet at a price that won’t do damage to the bottom line. High-speed Internet access was on the minds of many participants at the series of public hearings held during the summer of 2003. Comments included:

• “I’ve had numerous people tell me that they would like to move to our communities but we don’t have DSL capabilities;” and

• “In Eldorado, monthly access to a T1 connection costs $1,800 and there is no access to cable modems. In nearby San Angelo, people can get cable modems for $39.95 a month.”

Others commented that if rural Texas communities cannot offer such access affordably, attracting new businesses and retaining current ones will become increasingly difficult, if not impossible. In urbanized areas of Texas, telecommunications services are generally available and affordable. The same cannot be said for rural Texas. This disparity places rural communities at a competitive disadvantage in terms of attracting new businesses and new residents.

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TRANSPORTATION

Bridges As of November 14, 2003, a total of 4,731 bridges in Texas had posted load restrictions or were recommended for a restriction. Counties own 77 percent of these bridges. Forty percent of the state’s load-restricted or recommended bridges are located in rural counties, 17 percent are in micropolitan counties, and 43 percent are in urban counties.

State: Total load-restricted bridges and bridges recommended for restriction (2003) City-owned County-owned Federal State-owned All Urban 438 1421 11 173 All Micro 38 665 0 93 All Rural 87 1568 8 229 Total 563 3654 19 495 Source: Texas Department of Transportation

Roads The Texas Department of Transportation (TxDOT) defines a Farm to Market Road (FM) as a roadway generally in rural areas, funded by TxDOT and a city or county. Ranch-to-Market roads are considered part of the FM system. The city or county acquires right of way for these roads and TxDOT builds and maintains them. Begun in the 1940s and hailed as the way to get the farmers and ranchers “out of the mud,” the state’s FM system currently includes 41,008 miles of roadway. All but some 3,000 miles are located outside of city limits. Statewide, 46.3 percent of the total FM miles are in rural counties, 19.2 percent are in micropolitan counties and 34.5 percent are in urban counties.

State: Centerline miles46 of state-maintained roads (2002) Farm to Market roads Highways Rural47 City Rural City

Urban 11,823.68 2,322.59 20,455.37 10,281.17 Micro 7,440.22 420.39 12,399.78 1,495.56 Rural 18,415.96 563.80 32,907.22 1,873.46 State total48 37,679.85 3,306.78 65,762.37 13,650.19

Source: Texas Department of Transportation, December 31, 2002 The Texas highway system is 79,513 miles long. Most of the system (82.8 percent) is located outside city limits. Statewide, 43.8 percent of the total highway miles are in rural counties, 17.5 percent are in micropolitan counties, and 38.7 percent are in urban counties.

46 Total miles as measured along the centerline of a road. 47 Rural miles are located outside the city limits. 48 Total does not include 21.6 miles of city-maintained Farm-to-Market roads.

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State highway centerline miles (2002)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Urban Micro Rural State

County types

Rural Within city limits

Source: Texas Department of Transportation

County, city, and private roads and streets transport people and goods at the local level. Counties are responsible for the majority (64 percent) of these roads. Statewide, 37.5 percent of county roads are paved but the percentage varies greatly by county type: 60.6 percent paved in urban counties, 34.8 percent in micropolitan counties, and 18.3 percent in rural counties. The state’s 89,156 miles of unpaved county roads represent the largest category of roads statewide, eclipsing the state highway system by more than 9,000 miles. More than half of these unpaved county roads are located in rural counties. Statewide, 83.1 percent of city streets are paved. The percentage of paved city streets also varies by county type: 88.9 percent in urban counties, 65.4 in micropolitan counties, and 48.8 percent in rural counties. Although the urban counties have the highest percentage of paved city streets, more than half of the total miles (7,069 miles or 53.1 percent) of unpaved city streets in the state are located in urban counties. Private roads are not included in this analysis because they represent such a small portion of the road miles in the state (160 miles total). The analysis does not include roads and streets in colonias because no data are available for these roadways.

State: Centerline miles of paved/unpaved roads by owner (2002) Certified county roads City streets Paved Unpaved Paved Unpaved

Urban 32,926.98 21,389.82 56,893.71 7,069.38 Micro 9,044.64 16,945.18 5,045.24 2,668.54 Rural 11,348.03 50,821.92 3,400.81 3,570.76 State total49 53,319.65 89,156.92 65,339.76 13,308.68 Source: Texas Department of Transportation, December 31, 2002

49 Total does not include 99.7 miles of city-maintained state highways; 10.47 miles of principal arterial street system located in major urban centers; or 855.5 miles maintained by the federal government and located primarily in national forests and parks.

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WATER RESOURCES In urban counties, the primary use of water is for municipal use (52 percent), and the second major usage in for irrigation (24 percent). In contrast, in rural counties, 87 percent of water is dedicated to irrigation. Likewise, 76 percent of water in micropolitan counties is used for irrigation.

State: Percent of water use across sectors (2001)

Municipal Manufacturing Mining Steam Electric Irrigation Livestock Total (acre-feet)

Urban 52.60% 16.07% 1.12% 5.24% 23.90% 1.07% 7,761,866 Micro 9.38% 3.89% 1.84% 5.95% 76.36% 2.58% 2,702,585 Rural 3.93% 4.08% 1.08% 1.43% 86.97% 2.51% 6,068,869 State 27.67% 9.68% 1.22% 3.96% 55.63% 1.85% 16,533,320

Source: Texas Water Development Board The great majority of the state’s water is located in the West Texas region, primarily in the form of groundwater. 50

Available water in acre-feet (2000) Groundwater Surface water Total Alamo 2,392,804 54,756 2,447,560 Central Texas 957,953 175,158 1,133,111 East Texas 1,566,068 709,331 2,275,399 Lower Gulf Coast 364,134 100,506 464,640 North Central 118,762 147,812 266,574 North Texas Plains 331,537 67,907 399,444 Panhandle 6,105,749 119,966 6,225,715 Rio Grande 119,781 35,705 155,486 South Texas Plains 7,637,913 66,340 7,704,253 Upper Gulf Coast 1,149,750 1,893,380 3,043,130 West Texas 59,536,016 146,831 59,682,847 State 80,280,467 3,517,692 83,798,159

Source: Texas Water Development Board

50 For the purposes of this report, water stored in multi-county reservoirs was not included. This amount represents approximately 8 percent of the state’s total available water.

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State: Source of available water (2000)

4.20%

95.80%

GroundwaterSurface water

Source: Texas Water Development Board

More than 95 percent of state waterresources is derived from groundwatersources. Seventy percent of the state’swater is located in the West Texasregion, almost all of which isgroundwater.

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In Texas, a large percentage of water systems are small water systems—roughly 5,800 or 86.3 percent have 1,000 or fewer connections. In most regions across the state, the micropolitan counties have a larger percentage of public water systems with 1,000 or fewer systems than urban or rural sectors, wherein the statewide average for those counties is almost 90 percent. State: Public water systems Systems with

1,000 or less connections

Systems with greater than

1,000 connections

All systems Percent of systems with 1,000 or less

connections

Percent of systems with greater than 1,000

connections

Urban 3,764 663 4,427 85.0% 15.0% Micro 859 97 956 89.9% 10.1% Rural 1,182 163 1,345 87.9% 12.1% State 5,805 923 6,728 86.3% 13.7%

Source: Texas Water Development Board

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REGIONAL PROFILES When the Texas Legislature created the Office of Rural Community Affairs (ORCA) during the 77th Legislative Session, the legislature charged ORCA with compiling “an annual report describing and evaluating the condition of rural communities.” When the initial report, The Status of Rural Texas, 2002, was created, ORCA staff asked for and received input from rural Texans regarding issues and challenges facing their families and communities. The report was based on that input and examined some of the complex and diverse issues affecting rural Texas. As ORCA staff prepared for this year’s The Status of Rural Texas report, a central question was “Do all rural areas experience the same challenges and successes?” In an attempt to answer that question, ORCA held a series of public hearings across rural Texas and staff asked participants what was and wasn’t working in their community. These public hearings confirmed that different regions have different strengths and weaknesses. Interestingly, the notion of “community” seems to be changing. There was a growing acceptance among participants that, in some cases, regional cooperation and collaboration may present the best hopes for the long-term sustainability and growth of their hometown. Pooling human and financial resources within a region can sometimes produce a greater outcome than the efforts of a single community. Increasingly, a community’s success is tied to the success of its neighbors. We hope that this report will serve as a tool for communities that seek to work together or are already working together within a region. With these considerations in mind, we decided to take a regional approach in this second report. For the purpose of this report, the state has been divided into 11 regions. Each of the following regional profiles presents an analysis of demographics, economics, healthcare, education, and other indicators broken down by the urban, micropolitan, and rural counties. These regions keep intact the state’s regional governing bodies, known as Councils of Government or COGs, since these governmental divisions already have an identity and a planning infrastructure in place. The map on the following page shows the boundaries of the 11 regions. The regions defined in this report are based on similarities in geographical, economic, and cultural characteristics, with the intention of acknowledging and preserving regional identity. For example, the 41 counties in the Panhandle region share a rich agricultural tradition and a strong identity as the “Texas Panhandle.” The North Central region represents the fast-growing, mostly urban, northern section of the I-35 Corridor. The seven counties in the Rio Grande region have long shared an identity as the bi-cultural Lower Rio Grande Valley. Since the distinctive characteristics of the Texas-Mexico border cross COG lines, this report also includes a profile of the 43-county border region.

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Regional boundaries