Susan Combs

Children from Kirby Hall Elementary School are the first to try out “Beat the Thief,” the new IDWise interactive cyber security simulator that was released Tuesday morning.

Photo Credit: Chris Foxx | Daily Texan Staff

The UT Center for Identity launched a new program at the Etter-Harbin Alumni Center on Tuesday intended to combat the growing threat of identity theft.

Brenda Berkelaar, communication studies assistant professor, said the center and the program, called IDWise, provide tools for consumers to protect themselves from identity theft, a crime of which 20 percent of Americans are victims.

“What we want to do is make sure the research and the teaching and the things that are happening at the University actually make it out to the consumers who are impacted by [identity theft],” Berkelaar said.

Anna Griffin, communications coordinator at the Center for Identity, said the project is meant to help the groups that are most susceptible to identity theft — including older adults, children, small businesses, veterans and active-service men and women.

State Comptroller Susan Combs said, as the chief financial officer of the state, she understands how serious a problem identity theft is to the average consumer. According to Combs, the average consumer will pay $1,409 every time their identity is stolen. Together, she said, the total economic impact is in the billions. 

“The Department of Justice tried to add up and figure what the financial losses were, and they said, if you aggregate direct and indirect costs of identity theft, you’re looking at about $24.7 billion,” Combs said. 

U.S. Rep. John Carter said he has been working to combat identity theft since his first days in Washington D.C., when he was a member of the House Judiciary Committee. He said even though members of the committee knew that identity theft was a growing problem, there was nothing they could do about it. 

“I heard a statistic in one of my hearings that the fastest rising crime in America was identity theft,” Carter said. “It’s the fastest rising crime because it’s kind of like a Class A misdemeanor. It’s not quite a felony.” 

Carter passed a bill in 2004 that made punishment for identity theft harsher. He said in order to get prosecutors to bring more cases against people accused of identity theft, the punishment would need to be higher because prosecutors want to spend their time on more serious crime. 

Joe McGlynn, communication studies graduate student, said there are many ways to protect your identity, and they should be taken seriously. 

“[You should] change the way you think about your identity,” McGlynn said. “Anytime anyone asks you for a personal piece of information, understand that you’re giving away an important, valuable asset.”

Starting this summer, UT will house an identity theft center to provide theft protection training to students. Comptroller Susan Combs helped create the center as a way to prevent the damage caused by theft of sensitive and valuable information. This sort of training could help students stay safe in an increasingly online world — a world in which Americans lost $24.7 billion to identity fraud last year and the unknown impacts of the Heartbleed bug recently leaked the sensitive information of millions of online users. Horns up to being proactive against preventable cyber crimes.

Though the upcoming statewide races for positions beyond governor may not have captured student attention, one idea by the leading candidate for state comptroller could have an effect on rent prices and students' ability to buy a house after graduation.  

State Sen. Glenn Hegar, R-Katy — a candidate for state comptroller — recently expressed his unequivocal opposition to state property taxes, indicating he would like to get rid of the tax altogether and replace it, instead, with an increased consumption tax (i.e. sales tax). 

Hegar believes property taxes put an unfair burden on citizens. As he said at an event last month, “As long as we pay taxes, we have to ask, ‘Do we really own our property?’” 

Eliminating the tax, however, would not only be detrimental to all of the government programs that our tax dollars fund — including the University of Texas. It would also fail to decrease an individual’s tax burden.

According to a 2012 tax policy report, the switch from a property tax to a sales tax would necessitate a 25 percent sales tax to earn back the lost revenue. 

Our state’s current maximum sales tax rate of 8.25 percent is already on the upper end — we rank 11th in the nation, according to the Tax Foundation. An increase to 25 percent would give us the highest tax rate in the nation, nearly triple Tennessee’s 9.44 percent combined state and average local sales tax rate, which is currently the highest in the nation. 

Moreover, funding for cities, counties and schools would be even more vulnerable to economic ups and downs if we switched to a sales tax, since consumption spending is directly tied to our economic well-being: In times of recession, we focus our purchases on non-durables such as food and basic necessities, while, in times of plenty, consumers are more likely to splurge on expensive durables that would rake in more money for the state. 

Although under current Texas law, property is only subjected to local taxation. Texans have been paying property taxes from the beginning of the republic. Though voters abolished the statewide tax through an amendment in 1982, local taxes are still allowed. So, since 1979, real and business personal property owners have paid taxes based on the appraised value of their property, according to a 2011 report by the Texas House of Representatives. 

Based on figures from current Texas Comptroller Susan Combs, the total property tax levy in Travis County for 2010 was $2,303,173,357 or $2,249 per capita, putting us in the mid range for counties in Texas. The levy, and others like it, is used to fund day-to-day operational costs of government activities, as well as to service any debts. Granted, taxes have grown substantially in the past decade (188 percent from 2002-2010). But a lot of that increase has been fueled by special purpose districts, i.e. community college or water control districts. 

The comptroller’s latest transparency report says that, while the taxes levied by counties and school districts have not changed substantially since 1992, the number of special purpose districts that levy property taxes has increased by more than 45 percent.

These special purpose districts have accounted for 87 percent of the growth in local entities levying property taxes since 1992. The most common types of special district property taxes are municipal utility districts, emergency services districts, hospital districts, water control and improvement districts and college districts. So the money garnered from many special property districts has literally been going to fund infrastructure projects and services, such as hospitals, libraries and community colleges, at least according to the state’s records. 

Hegar’s predecessor in the comptroller’s office, provided he wins the position in the general election, was Susan Combs, who has held the position since 2006 and is retiring this year.

Combs and Hegar are both Republicans. Yet, it’s sad to think how far the party seems to have fallen since 2006. Combs, a Republican, authorized the transparency reports cited in this article that explain where our property tax dollars are going and underscore how important the tax revenue is for our state. Hegar, also a Republican — albeit perhaps a more current representation of the Republican Party in Texas — advocates for removing property taxes altogether and replacing them with an increased consumption tax, a move meant to increase the sense of ownership we have on our property, but, unsurprisingly, backed by little math whatsoever. (Admittedly, Combs had her own problems with math — her revenue estimates for the last biennium were notoriously off-base — but, unlike Hegar, she seems to grasp the basic principle of less being less.) 

Granted, comptrollers and tax collectors do not write tax laws, so, even if Hegar were to win the election, he would not have the power to put in place his ludicrous new tax scheme. The fact that he chooses to campaign on a platform that he cannot even follow through with further takes away from his credibility. Voters should truly think twice before casting a ballot for him in November. 

Well, it happened. On Sunday, Nov. 18, Austin hosted its highly anticipated Formula One United States Grand Prix. The race, which had been in planning stages for the past four years, drew several hundred thousand people, placing it up there with the always-growing Austin City Limits and South by Southwest music festivals in size. If all goes according to plan the race (and its accompanying visitors) will be an annual event.

As the tired masses shuffle back to the Austin-Bergstrom International Airport, Austin should take stock of what F1 spells for the city’s future.

In 2008, when Texas Governor Rick Perry and Texas Comptroller Susan Combs sent letters to race promoters indicating Texas’ interest in an F1 race, Sunday’s event became more than an idea. Two years later, negotiations opened between the state and F1 officials, and construction began on the $400 million Circuit of the Americas track. Controversy arose when Combs promised the race organizers $25 million per year in pre-race reimbursements from the state government, then later backtracked and said the funding would come after the race, depending on how successful it was.  And as recently as November 2011 construction of the track was halted, and the race’s future became uncertain due to contractual disagreements between F1 officials and the track’s developers. Those issues were resolved in time for the race, but the public reimbursements are still up for debate.

Perry and Combs justified the race as a worthwhile financial investment for the city and for the state. Perry said in a speech earlier this month, “[The race is] to the benefit of everyone here in Texas over the next couple weeks. The U.S. Grand Prix is going to bring 1.2 million visitors to Central Texas, with an estimated financial impact of half a billion dollars.” Perry and Combs hope that the race will be remunerative enough in the long run to contractors, developers and local businesses to offset any tax dollars that will need to be given to the race organizers to keep the event going. As of right now, it looks like the gamble will pay off, but the key will be whether or not interest in the race can be sustained over the next decade. For example, in 2000, the last effort to bring F1 to the U.S. attracted more than 225,000 fans to Indianapolis Motor Speedway in its first year, but the numbers soon dropped off sharply and the race was cancelled altogether after only seven years. One hopes history does not repeat itself in Austin.

If F1 Austin does succeed, it will bring new attention to the city. Our reputation as the “live music capital of the world” is well-established, and ACL and SXSW are internationally famous. This race and those two festivals are representative of the past ten years’ progression toward bigger and bigger events. Because of that progression and the city’s rapid population growth, Austin is no longer the quirky little college town it has historically been. And that change isn’t set to stop anytime soon.

If the race is considered a success by visitors, residents and faraway spectators, Austin’s international profile will rise. Thousands of visitors from Europe, Asia and elsewhere were here for the race, and hundreds of millions more were watching on television in nearly 200 countries. With all of that attention, this race may be Austin’s audition for hosting similar large-scale sporting events, like the World Cup, and maybe, at some point far down the road, an Austin Olympics.

City and state leaders like Perry and Combs would welcome such developments, but the same cannot be said for Austin residents. According to F1 organizers’ estimates, fewer than 20 percent of the race’s attendees were actually from Austin. In fact, many in the community have loudly voiced their displeasure with it. Many of the disgruntled citizens cite the crowds and traffic, but large crowds are to be expected with any event of this size, and any Austinite with a car knows that traffic in this city doesn’t need a special occasion to get completely out of hand. But the biggest complaint so far — that F1 clashes with the city’s culture — is not so off the mark.

Austin has long been known for its liberal politics, indie culture, predilection for “weirdness” and friendliness to the environment. F1, a glamorous, extravagant sport that has a reputation for catering to the super-wealthy, doesn’t really line up with that mentality. The globe-trotting billionaires following the race, who were denied their stated wish to hold decadent F1 parties on multimillion-dollar yachts on Town Lake, are noticeably out of place here. Even more jarring is that a city consistently ranked among the greenest in the country is now hosting a massive car race. F1 and the Circuit of the Americas have vigorously promoted their efforts to reduce carbon emissions, but the relatively small number of carbon offsets they paid for at the city’s urging does nothing to change the fact that the sport itself burns thousands of gallons of fossil fuels for the purposes of amusement.

It remains to be seen whether or not the effects of this race will be lasting, but it certainly seems capable of contributing to a sea change in Austin’s image. Hopefully the race will bring the promised economic growth to the city, but as we go down this path, we should be careful not to lose the unique culture that makes Austin so cool in the first place.

Stroud is an international relations and global studies sophomore from San Antonio

The UT System’s $7.3 billion worth of outstanding debt accounts for 58 percent of the state’s total public university debt, according to a report released by Susan Combs, Texas comptroller of public accounts, last week.

As of August 2011, the total outstanding debt of public four-year higher education institutions totaled $12.5 billion, making up 43 percent of the state’s total debt. The UT System is the largest public university system in the state, and its outstanding debt includes money owed by nine academic institutions, six health institutions, the Permanent University Fund and System Offices debt.

UT System spokesperson Jenny LaCoste-Caputo said the System paid $1.71 billon in 2011 toward repayment of outstanding debt from the Permanent University Fund, a state endowment that funds a portion of the System’s budget. Tuition revenue bonds, which are repaid by revenues from the projects they fund and pledge revenue from tuition, contributed $1 billion toward debt repayment.

“The UT System has 15 institutions, including leading research universities and health institutions, that require complex facilities to meet the needs of our patients and students,” LaCoste-Caputo said. “Debt service on [tuition revenue bonds] is reimbursed through general revenue appropriations and is not repaid by students or by increasing tuition.”

UT-Austin has the most debt of the System institutions with $1.15 billion and also has the highest student enrollment. The University’s debt per student is $22,465 compared to the System’s debt per student average of $34,962 per student, based on fall 2011 enrollment figures.

The System’s health institutions make up roughly 39 percent of the System’s debt, totaling $2.9 billion in debt, despite enrolling fewer than 7 percent of the System’s students. The average debt per student attending System health institutions totaled $778,778.

LaCoste-Caputo said a debt-per-student calculation can be misleading because much of the System’s outstanding debt is related to health institutions.

“Growth in debt there is largely not related to student enrollment growth but growth in number of patients seeking care, such as those who need cancer treatment at MD Anderson Cancer Care Center,” LaCoste-Caputo said.

The creation of the proposed UT-Austin medical school could further increase health institution debt.

UT spokesperson Gary Susswein said the University hopes to enroll 50 students as part of the medical school’s entering class of 2015 with hopes of increasing enrollment in the following years.

Based on the debt per student calculation, a UT-Austin medical school could add $38.9 million in debt to the University’s outstanding debt.

Kevin Hegarty, UT vice president and chief financial officer, said borrowing money for a campus is managed at the UT System level through UT

System bonds, but each campus is responsible for paying back debt collected by its own projects.

Debt service makes up $86 million, or 4 percent, of UT’s $2.34 billion 2012-2013 operating budget.

“When a UT System bond is issued, repayment is financially backed by all available net revenues of all the UT System campuses and system,” Hegarty said.

The System’s debt has earned an AAA credit rating, the highest rating available from major credit rating agencies, and is charged the lowest interest rate available in the public market when a campus borrows for a project, Hegarty said.

In the comptroller’s report on higher education debt, Combs recommended higher education institutions lower or support current levels of debt by taking advantage of the rapid growth of online education, which would reduce the need for new facilities. Permanent University Fund debt, which usually funds construction of new System facilities, accounted for close to 14 percent of System debt in 2011.

“As higher education delivery changes, so will the expenditures in infrastructure — both buildings and technology — supported by higher education revenues and debt,” Combs wrote in the report. “How and when remain to be seen.”

The UT System recently invested $10 million in edX, a distributor of interactive online classes, to develop four online courses by next year.

Printed on Thursday, November 1, 2012 as: System owes more than half of TX public university debt

Texas sales tax revenue reached the $2 billion mark last month for the second time since November, indicating that the economy is gradually recovering and people are spending more on luxury goods.

A letter from Texas Comptroller of Public Accounts Susan Combs reiterated the fact that the economy is recovering and rebuilding after the recession. The letter said Texas has recovered 94 percent of jobs lost during the recession, while nationally the U.S. has recovered just 27 percent of jobs lost. The state will continue adding jobs in fiscal years 2012 and 2013, the letter stated, though not as rapidly as in 2011. Before November, sales tax revenue had not reached $2 billion point since before 2008’s financial collapse, according to a recent Austin American-Statesman article. Revenues continue to grow in all major economic categories and provide a significant indication of the state’s fiscal well-being, according to the article.

Comptroller spokesperson RJ DeSilva said the state has seen 22 straight months of increases in sales tax revenue, which is good news as Texas emerges from the recent recession.

“When we look at how sales tax has been forming, it’s been increasing,” he said. “A big sector is the oil and natural gas industry, but the restaurant sector has also done well, and more people go and dine out, and the retail side is also doing better.”

While DeSilva said the economic future isn’t easy to predict, higher sales tax revenue marks are encouraging and indicate positive growth.

“We’re very cautious in terms of economic outlook,” he said. “But we expect stable growth to continue in terms of what we’re seeing in the past year plus.”

Economics professor Sandra Black said she sees revenue generated from high-price purchases as a positive sign of economic improvement.

“People are buying more stuff, so that’s a good sign,” Black said. “Restaurants are luxury goods — the fact that people are spending more suggests that they’re wealthier. If your income goes down, the first thing you’re going to do is stop eating out.”

Josh Mallia, general manager of the Roaring Fork restaurant near the Stephen F. Austin Hotel on Congress Avenue, said restaurant attendance rates have increased since the end of the previous recession.

“Within this last year, we’ve definitely seen more people coming back to the restaurant,” Mallia said. “I think people realized that Austin weathered the storm really well, and since this area wasn’t hit as bad, they don’t need as much discretion with their income.”

Despite recent encouraging numbers, Combs said in the letter that it is important to remember that positive signs in sales tax revenues do not mean Texas is protected from economic downturn.

“Texas, as the recent downturn has illustrated, is not immune to events originating elsewhere in the country or the world,” she said in the letter.

Printed on Thursday, February 16, 2012 as: Sales tax boost indicates economic recovery

A contract dispute between Formula One, race promoters and track developers has put on hold a ground-breaking track in Austin.

Photo Credit: The Associated Press

AUSTIN, Texas — Construction of a racetrack to host the U.S. Grand Prix starting next year has been halted in a contract dispute between Formula One, race promoters and developers.

That move, and a separate announcement Tuesday by State Comptroller Susan Combs that $25 million in state money for the race will not be paid in advance, cast doubt about the future of the race.

The project was hailed as a $300 million boon to the Austin economy and a critical breakthrough back into the U.S. market for Formula One, which hasn’t held the U.S. Grand Prix since 2007 in Indianapolis.

Circuit of the Americas officials, including billionaire Red McCombs, say construction won’t resume until they have a contract from Formula One to stage the race in Austin next year. Circuit of the Americas officials, without releasing details, said only that Formula One had not met a previously agreed timetable to send the contract and construction will not resume until that happens. The track is also scheduled to host MotoGP races for 10 years.

Tavo Hellmund, a former race driver with long family ties to Formula One boss Bernie Ecclestone, was granted the right to stage the U.S. Grand Prix. Although he was a founding partner of the Circuit of the Americas, recent statements by Hellmund and Circuit of the Americas officials suggest a serious rift has developed.

Ecclestone said last week the sides have “forgotten to talk to each other.” Hellmund did not immediately return a telephone message left by The Associated Press.

It was Ecclestone who made the surprise announcement in 2010 that Austin would host the return of the U.S. Grand Prix on the first track built specifically for Formula One. The project had the support of state lawmakers, who voted in 2009 to make the race eligible for $25 million from a special events fund. The project also had strong backing from Combs.

Correspondence between Combs, Ecclestone and Hellmund obtained by the Austin American-Statesman showed the original plan was to pay Formula One a year in advance to cover the cost of the international
sanctioning fee.

There have been many signs of problems.

The race’s original June 2012 schedule was pushed back to November, and the recent announcement of another Formula One race in New Jersey starting in 2013 raised questions over Formula One’s commitment to the Austin race.

Combs noted the New Jersey race “is a concern” because it may reduce the number of racers who would otherwise come to Austin.

That and the dispute between Hellmund and race promotes have prompted questions about “whether the Austin race will even occur,” Combs said.

“We have not paid out any money for the Formula One event,” Combs said. “Ultimately, I am responsible for protecting the interests of Texas taxpayers, first and foremost. I will not allow taxpayer dollars to be placed
at risk.”

Bobby Epstein, founding partner of Circuit of the Americas, called the U.S. “vital for the future of Formula One and its teams and sponsors ... We hope that Texas will not be left behind.”

Election 2010

When it comes to the race for Texas agricultural commissioner, a rematch of the candidates from 2006 may result in the same outcome in a much nastier campaign.

The race for agricultural commissioner is typically a low-key affair even though winning the office helped Gov. Rick Perry and State Comptroller Susan Combs launch their statewide political careers in the 1990s. The office is charged with regulating pesticide use, exports of livestock and making sure weights and measures used at gas stations and grocery stores are accurate.

Todd Staples, the Republican incumbent who has served as commissioner for four years, has called Hank Gilbert, his Democratic challenger, a “pathological liar.” Gilbert called Staples a professional politician who should “go home and get a real job like the rest of us.”

“They ran against each other in 2006 without so much nastiness,” said Harvey Tucker, a political science professor at Texas A&M. “From the outside, it looks as though the animosity has become personal more than politics as usual.”

Staples’ campaign has hammered Gilbert on personal issues — pointing out his 2001 conviction for theft by check, arrest for outstanding traffic tickets and tax liens placed on his property by the IRS.

“These [charges] aren’t allegations — they’re straight from the dockets of the Smith and Travis County courthouses,” Staples said.

Gilbert, who said he’s talked about his issues with taxes as well as traffic tickets and blamed Staples for the nasty turn the campaign has taken.

“The political side of it for me don’t mean squat,” Gilbert said.

Gilbert said that Staples hasn’t done enough to promote Texas’ agricultural products and producers and claimed that programs like GO TEXAN, which aims to promote Texas agriculture products both in Texas and around the country, hasn’t been effective. He would also back a plan to expand production of biofuels in West Texas.

Staples said the GO TEXAN program has been a success and would be further expanded if he’s re-elected. He also said he would back the state’s efforts to oppose attempts by the Environmental Protection Agency to regulate the output of carbon dioxide, which gas scientists say is responsible for global warming.
No Democrat has held the office since then-incumbent Jim Hightower lost to Rick Perry in the 1990 election.

While Combs and Perry both successfully ran for statewide office after serving as agricultural commissioner, Tucker said he doesn’t feel the job itself has much to do with either candidates’ success in campaigning for higher office.

Perry, he said, benefited from the Republican wave that ended Democratic control of politics in Texas during the 1990s. Combs benefited from running for an open seat in a state dominated by Republicans. Both served as agricultural commissioner for eight years before running for another office.

“Both took advantage of the opportunity to move up when an incumbent Republican chose not to run for re-election,” Tucker said.