Sample Neal Spelce Austin Letter

Sample Stories
These are only examples of what your paid subscription will allow you to see each week. To get the whole story, subscribe today.

Volume 22, Number 19

POLITICS AND GOVERNMENT

(8/26/11)

The die may be cast before the end of the year that could dramatically alter the makeup and the way Austinites elect the Austin City Council. It could be the first major overhaul of city government leadership in decades.

The Austin City Council is taking the first steps that could lead to a very significant change in the governing structure of Austin. A 15-member Charter Review Commission, appointed by the City Council, will study several proposals and make recommendations to the Council by year-end. Whatever the Council adopts must be approved by the voters. And considering the charge given to the Commission, those recommendations could be dramatic.

The headline-grabbing part of the Commission’s task is whether the City should set up single-member districts from which individual council members will be elected – instead of being elected by all the voters in the city. Austin voters in the past have defeated the concept of single-member districts many times.

What will single member districts look like? Well, the Council is asking the Commission to consider a Charter amendment that would elect six Council members from geographic districts, and two Council members and the Mayor at large. But who knows? In the past, proposals would increase the number of council members, mixing citywide and single member districts.

But there are other election/governing issues on the agenda for consideration. For instance, right now, members and the mayor are elected to three-year staggered terms. This means that during one election cycle only three council seats are open and in the next cycle three council seats and the mayor’s post are up for consideration. Other agenda items call for the elimination of staggered Council terms and changing the terms from three to four years.

However, as they say on those 1-800 TV commercials, that’s not all! The Commission is also charged with considering a Charter amendment that would move municipal elections away from the uniform election date in May to the uniform election date in November of odd-numbered years only.

If the city elections were to take place in odd-numbered years, such as this year, they would not be held during the high-turnout even-numbered years when you vote on a President or statewide elected offices. Some argue that this low-turnout cycle favors special interest groups that can sway outcomes because there are no big offices, such as President, Governor, etc. to draw voters to the polls.

Finally, the Commission will tackle the redistricting process by considering whether to require City staff to deliver a proposed redistricting map to a Council-appointed seven-member redistricting committee. You get the picture. If these items are recommended and adopted by the Council, Austinites will be voting next year to drastically alter the way Austin elections are held and your City Council is elected. It’s quite important.

(7/29/11)

Even as Texas Gov Rick Perry considers a run for president, his political history is being dissected and it will only become more intense if his Stetson is tossed into the ring. But will his time as an elected Democrat hold much sway in the GOP primary process?

Conservative credentials are an important factor for many Republicans as they vote for their nominee. Does Perry’s time as an elected Democrat in Texas diminish his credibility if he campaigns as an avowed conservative? Not really, says Mark Jones, the chair of the Department of Political Science at Rice University, because Perry was part of the “ultra conservative wing of the Democratic Party, light years away ideologically from liberal Democratic colleagues.”

A little political refresher is important here. For almost all of the 20^th Century, Texas was in effect a one-party state. In Perry’s West Texas House District, the Democratic Party was the only game in town. In fact, as recently as 1965, the Texas House of Representatives was composed of 149 Democrats and 1 Republican. Perry arrived in Austin as a Democratic legislator in 1985.

In a very in-depth analysis of Texas ideological voting records, Jones concludes that Perry’s voting record as a Democrat was more conservative than 77% of Democrats. Perry switched to the Republican Party in 1989. In the session following Perry’s departure from the House in 1991, only two Democrats had more conservative voting records than Perry, and since 1997, no Democrat more conservative than Perry has served in the Texas House.

This bit of history is important for those who vote in the Republican presidential primary – especially if Perry’s potential opponents for the GOP nomination start to slam him as a philosophical flip-flopper. Should Perry jump in and win the GOP nomination, it’s a different ballgame to win votes in the General Election. But that’s another story for another day.

(6/17/11)

One effect of Texas Gov Rick Perry’s flirtation with a presidential run is a major national media focus on the state’s economy. And this could bode well for Texas economic future.

No matter how you feel about Perry’s presidential prospects, one result of the media spotlight on him is that the nations’ business movers and shakers are getting huge doses of positive economic news about Texas. These captains of industry make decisions about where to expand or re-locate, creating new jobs in the process.

The president of the Federal Reserve Bank of Dallas, Richard Fisher, points out that 37% of all net new American jobs since the recovery began were created in Texas. He notes that Texas is also among the few states (3 very small states, actually) that are home to more jobs than when the recession began. He cites more stats, but since we’ve reported them previously, we’ll forego the repetition.

Fisher further observed that all states labor under the same Fed monetary policy and interest rates and federal regulation, but all states have not performed equally well. Texas stands out for its free market and business-friendly climate. And he stresses that capital – both human and investment – is highly mobile, and it migrates all the time to the places where the opportunities are larger and the burdens are lower.

Fisher is an economist with a dry way of expressing himself. Not so Jay Ambrose, a columnist for the Scripps Howard News Service. Comparing Texas to California, Ambrose wrote this week: “So what example should America follow, that of deficit-slaughtering, budget-cutting, seriously limited government in Texas, which has added 730,000 jobs in the past decade, or that of regulation-happy, spend-mercilessly, owe-everything, flee-this-place-quickly California, which has lost 600,000 jobs during the same period?”

These are just a couple of examples of the positive economic notoriety being spread around nationally about the Texas economy now that Perry has expanded his political stage. Of course, there are those who disagree with Perry politically and they point out what they feel are

Volume 22, Number 19

HIGH TECH

(5/27/11)

“Tech Help Wanted. Choose From Dozens of Companies. High-Paying Professional Positions. Live in Austin, one of US’s Top Cities.”

This headline could be bolstered by the following copy: “If you are an engineer, computer scientist, programmer or developer, come to Austin. Dozens of companies are hiring aggressively – 40 to 100 new employees per company, per year.” This is a direct quote from Joel Trammell and Larry Warnock. Trammell is the chair of the Austin Technology Council and Warnock was chair of the Technology Council’s CEO Summit.

The two went on to say: “To the fantastic talent developing in universities across the country, consider starting your career here. Most of Austin’s tech companies offer mentor programs and development labs for training. There are also hundreds of start-ups eager for talented technologists.”

And then, they gave this advice: “to the youth of Central Texas, wrap your mind around the fact that by 2015, 76% of the jobs in the US will require skills based on STEM (Science, Technology, Engineering and Math). Less than 50% of the jobs in the US in 1991 required those skills. Develop STEM skills – they will serve you well in the future, and serve us well as a region.”

And to the greater Austin community, they said to “celebrate all that is unique about Austin. It helps attract the technologists we need to accelerate growth. Imagine what our local economy would be if we had twice the companies we have now, each hiring 40 to 100 additional employees each year.”

There is an engineering talent shortage in Austin, they say. And the local tech community is taking immediate steps to correct the situation. Later this year Austin tech leaders will hold a recruiting event in California’s Silicon Valley. “We will go where we know there is an abundance of programmers, engineers and computer scientists, to recruit what the industry needs to accelerate the growth of technology in Central Texas,” said Trammel and Warnock.

Speaking about UTAustin, the tech leaders acknowledged that “one of the best computer science and engineering schools in the country (is) in our own backyard.” More about that in the next item.

(4/22/11)

With the flurry of current activity and interest in the high tech/Internet business sector in the Austin area, is there a danger of a tech bubble or a dot-com bust similar to a decade ago?

Take a step back and look at what’s happened in recent months. Governor Rick Perry is out front leading a charge to make Austin the next Silicon Valley. Facebook began operations downtown as part of its first US expansion of its online sales and operations teams outside of its Palo Alto headquarters. eBay/PayPal committed to create at least 1,000 jobs in Austin over the next ten years. Samsung is concluding a $3.6 billion expansion (the most expensive in Austin’s history). And there’s more.

This is amazing economic news, especially when you consider the jobs that are created (eBay/PayPal’s average salary for new hires is $107,000). But if you weathered the frenzy of the dot-com era in Austin as the 1990s ended, as well as its ultimate bust, you may be thinking, as Yogi Berra put it: “It’s déjà vu all over again.” Well, is it? Are we building up for a bust?

Not likely, because this is a vastly different surge. The dot-com frenzy was fueled by investors, IPOs and the market dumping huge sums of money in companies that had never shown a profit.

Do you have any idea how much profit Facebook is expected to book in 2011? A billion dollars! Profit! This is hardly the bottom line of a company that may go bust anytime soon. eBay was one of those dot-com companies that survived and in February reported that eBay/PayPal revenue could double in as little as two years, thanks primarily to PayPal.

Besides, these are different times than just a dozen years ago. There are many more users online now and the number is growing. It’s roughly 2 billion today, compared to 55 million (and many of those were on dial-up modems!) in the late 1990s.

So, not only is there a much stronger financial underpinning to many of these companies, but the marketplace has expanded exponentially to enhance future success. Nothing is totally failure-proof, but this is a much better economic place than it was just a few short years ago.

(4/8/11)

A Top Ten Cleantech Cities in the United States report was released this week. Austin was #3.

This is part of what was said about #3Austin: “Austin has long been Texas’ hub for solar, wind, geothermal and biomass power, as well as fuel cell technologies. Its commitment to the environment and sustainability has made it not only a national CleanTech player, but a global one as well.”

Other cities: #1 Boston … #2 San Jose … #4 San Francisco … #5 Seattle … #6 Chicago ... #7 Philadelphia … #8 Berkeley … #9 Pasadena and #10 Washington, DC.

Volume 22, Number 19

REAL ESTATE

(11/4/11)

One of the highlights of the Austin area’s economic rebound is a segment that hasn’t shown positive year-over-year growth in three years.

The release of preliminary job payroll numbers from September by state and national agencies indicate the Austin area construction and natural resources industry has had the largest rate of growth over the last 12 months since April 2008, according to the Austin Chamber’s VP Research, Beverly Kerr.

(10/28/11)

When the housing bubble burst several years ago devastating much of the nation’s economy, the Austin market didn’t have a real estate bubble to deflate. As a result, the Austin area economy fared much better than most. What about now?

Even though the Austin area today is among the nation’s leaders in terms of a healthy economy, some are complaining they don’t think Austin area home sales and values are rising at a fast pace. First of all, there are some encouraging signs. We’ll get to that in a moment.

But secondarily, the very fact that Austin area home sales/values moved upward at a moderate pace when housing prices were going crazy in California, Nevada, Arizona, Florida, etc. did much to keep the local economy on an even keel. And the same, steady, methodical pace of improvement in housing values that protected the Austin area during that difficult time is occurring today.

In fact, from that perspective, the recent stats are downright impressive. According to the most recent Multiple Listing Service (MLS) report from the Austin Board of Realtors®, for four straight months (through September), year-over-year sales volume increases have been reported. Importantly, for the past three months, those increases have exceeded 33%.

Yeah, but isn’t that such a strong pace it might lead to a housing bubble? Nope. And the reason why is that Austin home values have remained stable. While home sellers may have wished for a higher price, the fact that prices have not skyrocketed indicates this robust housing market is settling into a reasonable period of growth. Good sales activity and good value without booming prices.

The other indicator to watch is how many homes have “for sale” signs in the front yard and how long it takes for them to sell. Homes remained on the market for an average 81 days in September. And the market overall does not have a glut of housing offered for sale.

Quite the opposite. At the current sales pace, the market has about 5.4 months of inventory. The Real Estate Center at TexasA&M reports that 6.5 months of inventory represents a market in which supply and demand for homes is balanced. The 5.4 months of inventory in the Austin area indicates the market is leaning a bit in favor of the home seller.

(10.28.11)

A new report indicates the nation’s economic eyes are on Austin real estate trends.

As the two previous stories reported, there are strong arguments for investing in real estate in Texas. And now Austin is ranked #2 in the nation as a market to watch in 2012, according to the annual Emerging Trends in Real Estate report. The report was authored by two respectable organizations, PricewaterhouseCoopers LLP and the Urban Land Institute.

The report said Austin registers significant interest on investor radar screens and has all the ingredients needed for the 21^st century. Specifically the report contrasted Austin with Dallas and Houston by pointing out downtown Austin features pedestrian-friendly, downtown apartment neighborhoods with plenty of nightlife attractions.

It also pointed to the diversity of educational, medical and government jobs, backed by high tech, as an environment that protects the Austin area from drastic boom/bust cycles

Volume 22, Number 19

BUSINESS AND ECONOMY

(11.11.11)

“Texas is the most successful state in America. Texas economic output exceeds Mexico’s and Australia’s and rivals India’s,” according to a staff writer in The Wall Street Journal.

The writer, Daniel Henninger, came to Austin to check out claims made by Gov. Rick Perry in Perry’s run for the presidency. Setting politics aside, the piece he wrote contained some interesting insights about Austin and the Lone Star State after talking to several high-level CEOs who have invested heavily in Texas.

Ed Trevis, a California-educated Brazilian immigrant and tech entrepreneur in Silicon Valley for 25 years, moved Corvalent Corp to Austin and told Henninger: “what I found in Texas is that from the standpoint of running a business, cost of living, education, the labor pool, quality of life, it just blew other states out of the water.”

Henninger added: “I heard this constantly – people enjoy being in business in Texas.” David Booth, who moved Dimensional Fund Advisors’s headquarters to Austin from Santa Monica in 2008, told Henninger: “it’s just that they believe in the whole Horatio Alger myth down here. It’s hard to understand if you haven’t lived here.”

“In 1990, one of the world’s biggest companies, Exxon Mobil, left New York City for Dallas. Exxon’s former CEO, Lee Raymond, says the move was indeed about costs and New York State’s notoriously overbearing tax authority. But it was also about working amid a culture of competence. ‘It’s just the attitude in Texas of getting things done and doing them well’.”

Others were quoted as well and their observations led Henninger to comment: “in Austin you discover a primary reason beneath Texas’ success: it’s about competition plus collaboration. It seems everyone in Texas high-tech knows everyone, and if they can help each other, they will.”

Henninger says the story of Texas is “a story the rest of the US should hear – the parts of the country that want a better economy than they’ve got now.” Then came his clincher: “This much is obvious: Texas, not California, better be the American future.”

(11.11.11)

So, your business needs to borrow money from a bank. Has the lending situation changed recently? What about in the near future? It’s improving.

It looks like 2012 may be a “pretty good time to borrow,” predict our friends at Kiplinger, who for 88 years have been providing forecasts for management decision-making. Of course they point out it helps if your firm is enjoying healthy growth, has strong prospects and may be in a position to expand. Here are the reasons cited by Kiplinger:

Interest rates can’t get much sweeter. On a $200,000, 10-year loan to purchase equipment, a typical small retail business in Austin with a top credit rating can find a fixed rate of about 6.5%, for example.

Banks will be eager to lend. Following the financial crisis of 2008-2009, the banks bolstered reserves they held to offset risky loans partly by cutting back on lending. Now they’re able to loosen the purse strings, making up for the dearth of lending during the recession and for revenues they continue to lose elsewhere in a mortgage market stunted by a housing slump, and in credit card rates and fees that are curbed by new federal regulations.

Lenders want to diversify, spreading risks. Both small and big banks see small business clients as the answer. In fact, so far in 2011, JPMorgan Chase has hiked its lending to small businesses by 71%.

Declines in late payments and bad loans make it easier for banks to say yes. The share of non-performing business loans has fallen nationally from 2.8% in 2009 to 1.6%. And remember, this is a national average and Austin has a much better economy than the nation as a whole.

Kiplinger said competition will extend beyond interest rates to more relaxed terms, such as longer re-payment periods, lower monthly payments, less collateral and so on. And Kiplinger predicts lending to subprime businesses will pick up because competition for small business loans will result in easing standards further. As an example, Kiplinger notes that new credit cards issued to subprime borrowers increased 64% over last year’s level.

(11.11.11)

Two different national publications, normally in competition with each other, agree on one thing: Texas is the best place to be in business today.

The site and facility planning publication, Area Development, in its online edition surveyed a select group of highly-respected site location consultants with a nationwide client base. These are the pros who are hired by companies to do all the digging to recommend locations where the companies should expand or re-locate.

States were ranked in each of 12 site selection categories based on the number of times they were named as a Top Five choice by the responding consultants. The conclusion: “Texas is far and away the consultant’s #1 choice for doing business.” Rounding out the Top Five, in order, behind Texas: Georgia, Alabama, South Carolina, Indiana and Louisiana.

The other publication, Site Selection, using different criteria, came to the same conclusion.

The magazine’s selection was based on factors including a survey of corporate real estate executives, a tax climate analysis and the state’s performance on a database that tracks new business activitiy. “Executives who participated in the survey ranked Texas the best state for business based on its lack of red tape, financial assistance and government cooperation with businesses,” the magazine concluded. North Carolina has held the top spot for the last decade.

Whenever Texas is top-ranked in economic surveys it augurs well for Austin. After all, inside Texas Austin is considered by many to have the strongest economy in the state.

(11.11.11)

Where does the average private sector salary in Austin rank nationwide? Out of 938 metro areas, Austin was certainly not at the top, but in its own way, its average private sector salary rank is quite impressive.

The Austin area has a large number of government jobs. Payroll checks from state, county and city government, universities and public schools, federal employers, etc. are a big part of Austin’s economy. But what about the private sector? How do its wages compare?

Austin’s average private sector salary ranks 28^th in the nation. Not bad, especially considering the Austin area regularly ranks favorably for its moderate cost of living. The average Austin private sector annual salary: $45,500.

Dallas-Fort Worth ranks 25^th nationally ($46,200 average salary), Houston is #12 ($51,300), but San Antonio is 189^th ($36,000) in the recent analysis of USCensus Bureau data by On Numbers, a division of American City Business Journals.

Volume 22, Number 19

ENVIRONMENT

(10.7.11)

The Lower Colorado River Authority (LCRA) has asked the state for permission to significantly cut back or cut off water to farmers next year if drought conditions continue.

Lakes Travis and Buchanan are “storage” lakes on the Colorado River. The LCRA manages the level of these lakes to “store” water for its customers to use during dry times or, at the other end of the spectrum, to “capture” water in flooding situations to protect those downstream. As a result the levels of these two lakes vary widely, depending upon weather conditions.

Right now, the levels of lakes Travis and Buchanan are very, very low. For instance, Buchanan is declining to an elevation of 987 feet above sea level. This is more than 23 feet lower than Lake Buchanan’s historic October average. The same is true for Lake Travis where the lake level is at an elevation about 628 feet above sea level and still dropping. This is almost 38 feet below Lake Travis’s historic October average.

Just as important is the amount of water that is being stored. If both lakes are “full,” the combined volume is 2,011,000 acre-feet of water. Right now, the current combined volume of lakes Travis and Buchanan is 749,000 acre-feet. In other words, the storage of water is only 37% of what is possible. This is serious and it is getting worse as the exceptional-to-extreme drought conditions remain in place.

With the absence of any tropical storm activity in the Gulf of Mexico, and hurricane season nearing its end, meteorologists are forecasting the drought is likely to continue into next year and maybe even beyond. Lake water continues to evaporate and streams in the Texas Hill Country are dry. As a result, inflows into the Highland Lakes continue to be well below normal. So what is the LCRA doing as it watches the water levels drop daily?

The LCRA has formally filed applications with the Texas Commission on Environmental Quality (TCEQ) to deviate from its state-approved water management plan. LCRA is asking TCEQ for approval to cut off Highland Lakes water to farmers in the Gulf Coast area and to other irrigation divisions downstream.

The trigger LCRA is seeking: if lakes Travis and Buchanan combined contain less than 850,000 acre-feet of stored water on March 1^st 2012, water would be cut off to the downstream farmers. Remember what we told you a minute ago. The current combined water storage in the two water supply reservoirs is 749,000 acre-feet. And with minimal, if any, water going into “storage,” water is still being released to downstream users as per existing water contracts.

The situation is dire. If the TCEQ approves the LCRA requests to deviate from the existing state-approved plan, downstream farmers could face severe crop-growing restrictions next year.

(9/2/11)

Goodbye August! Don’t let the door hit you on the way out! And take the unprecedented heat and lack of rain with you! Okay, that said, let’s get realistic. What can you expect from the drought in the weeks and months ahead?

No need to continue to hammer that last month was the hottest August and the hottest month ever recorded in the Austin area. Or that August followed June and July where record heat was also recorded. What is happening to the major source of water for the Central Texas area?

The Lake Travis pool elevation fell a foot from last week to this week. The water level stands around 634 feet above mean sea level (msl) this week – thirty feet below its average of 664 feet. The conservation storage level of the lake is 681 feet msl. And the lake is expected to fall another foot next week.

The Lower Colorado River Authority (LCRA) controls the water flow in the Highland Lakes along the Colorado River. As a result, it continually forecasts what will happen to the lake levels through droughts, floods and normal times.

Here’s what the LCRA is currently forecasting. If drought conditions continue, as September heads into October, the level of Lake Travis will drop below 630 feet. After that, the LCRA predicts the level should remain steady – not dipping below 625 feet through the end of the year. Obviously, as the temps cool, the rate of evaporation diminishes.

Wait a minute. Isn’t September the most active month for tropical storm activity? So, what if this activity results in rain? (Rain? What’s that?)

The LCRA predicts if there is “normal” rainfall between now and year-end, Lake Travis should rise above 640 feet. And if there are, hold on, “wet” conditions, the Lake Travis could rise past 650 feet as 2012 approaches. That 650-foot level would get the lake back to where it was at the beginning of June, but still 30 feet below its hoped-for conservation level.

Hurricanes, floods, tornadoes, and earthquakes – such as those that hit the US so far this year – are extreme natural phenomena. Some extreme conditions hit almost without warning. But drought? Drought is different. Climatologists call drought a “creeping disaster” because its effects are not felt at once.

This drought is being felt right now in Central Texas and across most of Texas as a whole. And, its effects are not limited to impacting the water supply. Agriculture suffers. Businesses that rely on water recreation activities are struggling. Property values are hurt when trees and other landscaping wilt or dry due to the heat and lack of water. And, you almost don’t want to say this out loud, but wildfires can be the most devastating of all – especially in urban areas. So, keep your eye on the Gulf of Mexico for any signs of tropical storm activity.

Volume 22, Number 19

GROWTH AND DEVELOPMENT

(10/28/11)

The Texas population growth is one of nine reasons cited by two Texas economists why investors find Texas so attractive. The other eight reasons make up a strong list.

Ali Anari and Mark Dotzour are economists at the Real Estate Center at TexasA&M. They point out that high net worth investors may live in New York City, Miami or San Diego, but they invest in Texas real estate. Here are the nine reasons the economists say out-of-staters invest in Texas.

1. Texas is leading the nation in economic recovery. The duration of the recession, measured by the number of months of job losses, was shorter for Texas while the intensity, measured by the highest job loss rate in the trough month was smaller for Texas than the nation.

2. Texas’ economy is big and getting bigger. Texas economy was the 14^th largest in the world in 2010 and was the 2^nd largest in the nation in 2010, larger than New York’s.

3. Texas’ economy is profitable. According to private sector gross domestic product, Texas businesses are more profitable.

4. Texas’ population is growing. State demographers have estimated the Texas population could grow by 12 million from 2010 to 2030.

5. Texas’ economy is international. The state exported more than $1 billion to 25 countries in 2009.

6. Tax burden is less in Texas. In 2009, state and local taxes accounted for 7.9% of the state’s per capita income, compared with 9.8% for the nation.

7. Texas has affordable housing. The average price of an owner-occupied housing unit in Texas in 2009 was about 68% of the national average.

Two “personal qualities” of Texans round out the nine reasons. See the next item.

(10/7/11)

The vibrancy of Austin’s economic future resulted in another #1 ranking – this one, the Top Ten US Cities with Potential Growth. The ten, as ranked by a publication whose roots go back 88 years, are spread all over the country with Austin at the top.

Our friends at Kiplinger’s Personal Finance in Washington worked with Martin Prosperity Institute, a think tank that studies economic prosperity. Kiplinger then visited the cities to interview business and community leaders and residents. Their Top Ten: #1 Austin, followed by Seattle, Washington DC, Boulder, Salt Lake City, Rochester, Minn., Des Moines, Burlington, West Hartford, Conn. and Topeka. Kiplinger, as you may recall, is nearing nine decades of providing insight and analysis to the US business community.

Kiplinger’s senior editor Robert Frick said of the Top Ten: “It’s no coincidence that economic vitality and livability go hand in hand. Creativity in music, arts and culture, plus neighborhoods and recreational facilities that rank high for ‘coolness,’ attract like-minded professionals who go on to cultivate a region’s business scene. All these factors make our Best Cities more than just great places to live. They’re also great places to start a business or find a job.”

“Cities with potential growth have a few things in common. They have smart people and great ideas. However, a third key element is vital, and it’s one we find that is becoming increasingly more popular. They collaborate,” noted Kiplinger. “Business communities to governments to universities to residents – when they’re in collaboration, the economic vitality is impressive. As these cities soar in vitality they become more livable. The arts, culture and music come alive, making the cities with potential growth more desirable.”

What about Austin, specifically? “Austin, Texas has outstanding programs to help build a network for business brainpower and encourage entrepreneurship. Plus there are available venture-capital funds and about 20 business associations. Mix all these elements in what many call a classless society, where hippie communalism coexists with no-nonsense capitalism, and you’ve got a breeding ground for start-ups.”

Kiplinger didn’t just throw a dart at a US wall map to come up with the ten cities and the ultimate top ranking of Austin as the best of the best. As we mentioned, the research was supplemented by a visit to Austin and interviews. Here’s what else went into the study:

A formula and a methodology that included several economic indicators were used to select the top ten cities that have current and likely future growth in high-quality jobs and income. The number of “creative class” workers (those who are educators, writers, scientists) in the area was considered, as well as things like public transportation systems and overall affordability.

Noteworthy: Kiplinger’s information is circulated widely to US business and thought leaders.