In this issue:
From the Comptroller:Lone Star Card Pays Dividends
Prepaid Tuition in Development
Centers of Attention
Magnitude of leaking petroleum tanks thwarts statewide cleanup efforts
The ongoing chore of cleaning up leaking petroleum storage tanks and preventing further contamination is one of the most formidable and costly environmental tasks facing Texas.
For a decade, the state has been trying to address this enormous problem, yet the effort is far from complete. Thousands of tanks have yet to be repaired or replaced, and the bills continue to mount. Twice, the Legislature has had to bail out the state cleanup fund to keep the program alive, including a $120 million advance this biennium.
The Texas Natural Resource Conservation Commission (TNRCC) is charged with protecting ground and surface water, soil and air from contamination caused by leaking underground and aboveground storage tanks. More than half of the water used in Texas for agricultural, industrial and public use comes from underground sources.
Of the 173,000 registered storage tanks in Texas, one in four has been known to leak and pollute the surrounding area, TNRCC reports. Such problems stem from the fact that some tanks are more than 30 years old and have corroded; others have been abandoned. Faulty installation or inadequate operation and maintenance also have led to leaks.
Most active storage tanks contain gasoline, diesel or other petroleum products, and are located at gasoline service stations and convenience stores, hidden beneath concrete. Some storage tanks-fewer than 5 percent-contain hazardous chemicals such as industrial solvents and pesticides.
Almost 7,000 sites, averaging 2.5 tanks per site, have been cleaned up in Texas, but much more remains-so much that the final cleanup bill may exceed $2.5 billion.
Cleanup required: In 1984, Congress created a broad regulatory program for underground storage tanks containing registered hazardous materials.
Soon after, the Texas Water Commission, one of TNRCC's predecessor agencies, began to administer the underground storage tank program and, for the first time, tanks had to be registered. This requirement was necessary to overcome one of the greatest obstacles in a massive cleanup effort: identifying the leaking tanks.
In 1989, the Legislature created the Petroleum Storage Tank Remediation Fund, by which the state reimburses owners and operators who clean up releases of petroleum products at their own expense. The remediation fund, supported by fees, was created in response to growing public concern over an ever-growing number of tanks leaking fuel and the potential threat to health, safety and the environment.
The reimbursement fund provided tank owners an incentive to begin their own cleanup efforts. Most owners believed they could minimize disruption to their business and respond more quickly if they directed the cleanup.
Storage tank owners and operators were reimbursed, according to legislation, for Onecessary, allowable and reasonableO costs that exceeded an established deductible, depending on the number of tanks owned.
In 1991, the Legislature expanded the eligibility of applicants and lowered the deductible-a move intended to draw more tank owners and operators into the program. The legislative revisions did just that, and soon the increased number of claims was creating a financial drain on the fund.
Demands on the state remediation fund hit an all-time high in 1992, and tank owners and operators became reluctant to go forward with cleanup projects without assurances of state aid. As a result, cleanup activity slowed.
In 1993, the Legislature had to lend TNRCC $120 million in general revenue to reimburse claims and establish a priority system and audit program. The loan has been repaid.
The money pit: For most Texans, it is difficult to comprehend the magnitude of this environmental problem. The backlog of tanks waiting to be addressed is staggering, and TNRCC gets new reports of leaking tanks every day.
Based on the 11,000-plus cleanup claims filed with TNRCC since 1989, the state has reimbursed owners and operators about $280 million. During that time, Texas received about $24 million in federal aid to help deal with bad tanks.
But $1.3 billion is needed to clean up the "leakers" known to TNRCC. Further, the Environmental Protection Agency (EPA) estimates 12,000 to 15,000 leaking tanks in Texas have not even been reported to state authorities, and those could cost an additional $1.2 billion to remedy.
Much of the funds spent on remediation come from a state bulk delivery fee charged to anyone who withdraws a petroleum product from a bulk distribution facility. The delivery fee has generated about $60 million a year.
By 1993, it was apparent TNRCC would have to come up with new ways of doing business, so the agency started looking for ways to cut costs and maximize limited funds.
Emphasis was placed on ranking cleanup sites in terms of potential risk. TNRCC came up with the nation's first state plan to prioritize contaminated sites so that tanks posing the greatest human health and safety risks would be addressed first. So far, 585 such tanks have been identified throughout Texas. These "priority one" tanks are located in 137 counties; Dallas, Harris and Lubbock lead the list.
TNRCC also has made administrative changes. Where possible, the agency has reduced well monitoring requirements from quarterly to annually to save on equipment and personnel costs.
Standardization of reporting requirements resulted in condensing 29 reports to nine. TNRCC has set a goal of processing each application in only 30 days-without additional staff. By the end of 1996, TNRCC will be able to evaluate how successful it has been in meeting that goal.
Further, Texas has been delegated full responsibility for administering the petroleum storage tank program. EPA delegated its authority to TNRCC in April 1995, a move which should simplify matters for tank owners who no longer have to deal with both state and federal regulations.
Revised reimbursement guidelines have helped contain cleanup costs. For example, the amount of reimbursement allowed by the state for removing a leaking tank was cut from $20,000 to $8,000.
State clampdown: The 1995 Legislature moved to order an end to the reimbursement program. Ongoing cleanups will be reimbursed until September 2001, but none after that date. Leaking tanks discovered after December 1998 will not be eligible for reimbursement.
After 1998, all tank owners and operators will be required to obtain insurance coverage or prove financial responsibility for any leaking storage tank site that has not been closed. The remediation fund will not be used to cover expenses for leaks discovered after that date; tank owners will have to shoulder that responsibility.
Also, lawmakers doubled the bulk delivery fee to 1.2 cents per gallon, effective September 1995. The fee increase will help address an estimated $70 million in backlog claims and repay the 1995 general revenue fund transfer of $120 million.
The Legislature also authorized TNRCC to privatize any part of the petroleum storage tank program.
Remediation outlook: The problem of cleaning up storage tanks will likely still be on the state government's agenda going into the next century. For now, TNRCC's most pressing problem is getting tank owners and operators to comply with the deadlines established by the Legislature.
Meanwhile, participants in the remediation program are trying to cope with other problems. The petroleum storage tank program does not cover third-party liability-rather, it is the responsibility of the tank owner.
Also, TNRCC and the Texas Oil Marketers Association are reviewing a proposal to shift owners from the state's remediation fund to private insurance companies. Enforcement of the compliance regulations could be enhanced by insurance companies requiring compliance as part of coverage.
If Texas ever cleans up the existing leaking storage tanks, future large- scale leakage should not be a problem. Federal and state laws require tank upgrades to combat corrosion or structural failure, and tanks must be built or lined with material that is compatible with the stored substances.
Contributing to this article:
Mario Salinas and Julie Crimmins
The colossal problem of leaking petroleum storage tanks has spawned an industry needed to help comply with environmental regulations, experiment with new technologies and, above all, clean up the mess.
Though thousands of petroleum storage tank sites have been cleaned up, the remediation effort is outpaced by the number of reported new leaks. Five to seven reports of leaky tanks are filed each day with the Texas Natural Resource Conservation Commission (TNRCC), which oversees the statewide cleanup program. One of the agency's responsibilities is certifying the remediation companies that perform corrective actions.
In response to this demanding task, the environmental remediation industry has expanded rapidly. In fiscal 1995, TNRCC certified 1,856 petroleum storage tank specialists and project managers, a 53 percent increase from 1994, and 2,335 underground storage tank contractors and on- site supervisors, a 30 percent increase over the same period.
A costly problem: Leaking tanks are usually discovered when complaints are made to TNRCC, the tanks fail compliance tests or construction uncovers contamination.
Most leaks can be traced to the improper filling of storage tanks or corrosion in tank walls and piping. Leaking tanks pose numerous health and environmental risks, including the potential for fire and explosion.
Cleanup costs vary according to the extent of contamination and size of the site. The average job in Texas costs about $80,000 per site and can take up to six years.
Groundwater contamination-one of the most serious threats to the environment-can cost up to $1 million per site to remediate, according to the Environmental Protection Agency (EPA). Groundwater may have to be pumped to the surface so it can be treated, then returned to the original site where monitoring equipment is set up to test water quality.
At a contaminated site, a remediation company usually makes a risk assessment involving human health and the environment, then follows with a plan for an effective technical solution, taking into account state environmental rules.
In many cases, contaminated soil must be removed from the site and disposed of, usually in state-certified landfills. Soil that is removed may have to be replaced with uncontaminated soil. At any time during the remediation, operation lab analyses may be performed. In some cases, soil can be treated by heat, chemical or biotechnology methods rather than being removed from the site.
High-tech solutions: EPA is promoting alternatives to traditional site assessment and cleanup technologies: processes such as air sparging (scattering or spraying a liquid by use of compressed air), bioremediation (use of biological materials such as bacteria or microbes) and low- temperature thermal desorption, which uses reverse absorption or absorption at low temperatures. These processes have been successful in field applications, but are not widely used.
Bioremediation can be a money-saver. In one case, Espey Huston and Associates of Austin cleaned a leaking pipe, located under a concrete foundation slab, by using microbes and small equipment, thereby minimizing the manpower needed. The cost was only $20,000.
Environmental remediation technology is taking on new forms. New technical and design standards of petroleum storage tanks as well as geographical and demographic considerations will affect special monitoring systems for air, soil and water. Many of these innovations provide cost- effective solutions to pollution and offer potential for new business.
Another boost to the industry may occur with the anticipated privatization of the state's petroleum storage tank program. TNRCC was authorized in 1995 to privatize such program components as site assessments, remediation action plan reviews and closure plan reviews. That action may open up job opportunities for tasks previously performed by agency personnel.
Contributing to this article:
This month brings a close to the era of paper food stamps being used throughout Texas as a second currency in the criminal underground's cash- only economy.
The Lone Star card is now in use throughout the entire state. This innovative electronic benefits delivery system, first proposed in my 1991 Breaking the Mold report, has placed Texas in the vanguard of welfare reform.
The electronic card has dramatically reduced much of the fraud and abuse associated with the old paper food stamps. Shortly after the card went on- line in Houston earlier this year, local law enforcement broke up a $1 million illegal food stamp ring. Authorities said the Lone Star card provided them an electronic tool to finally put the crooks out of business.
If a card is stolen without the card holder's personal identification code, it's useless. Even with the code, the card is good only for groceries or, in the case of recipients of Aid to Families with Dependent Children, small amounts of cash (an average $188 a month for a family of four). When the card went on line in the Dallas area, food sales rose by more than $5.7 million from one month to the next; in Houston, sales jumped by nearly $4.5 million.
Also, the Lone Star card is saving taxpayers a bundle in printing, mailing, security and tabulation costs. Clients who once worried about losing or having their paper food stamps stolen are able to budget their accounts more effectively throughout the month.
The new system, which is administered by the Texas Department of Human Services and Transactive Corporation, the Austin-based operator, may be expanded in the future to include unemployment insurance, disability payments, hunting and fishing licenses and a wide range of other programs.
Now the whole state knows: The Lone Star card is a simple, safe and smart way to do business.
The Comptroller's Office continues to work on the prepaid college tuition program so that contracts will be ready to go on sale in January 1996.
The agency has issued contracts or requests for proposals in the areas of actuarial review, records administration and marketing services. Also, the Comptroller has named Wardaleen Belvin, formerly of the Lieutenant Governor's Office, to administer the Texas Tomorrow Fund.
The prepaid tuition program was recommended by the Comptroller's 1995 Texas Performance Review and was published in the report, Gaining Ground. The Legislature implemented the idea as a means of helping parents, grandparents or family friends prepay for youngstersO college education. By purchasing a contract, a family can lock in tuition and mandatory fees at today's rates. Historically, college costs have risen rapidly.
The contracts will be good for all two- and four-year public and private colleges and universities in Texas. Texas State Technical College qualifies as well, although proprietary (trade) schools are excluded.
To qualify for the program, the recipient or one of his parents must be a Texas resident. The contracts will likely be available at local banks and other financial or educational institutions.
The newly appointed members of the board of directors for the Texas Tomorrow Fund are: State Senator Bill Ratliff of Mount Pleasant, Charles Miller of Houston, Dr. Roy McClung of Lubbock, John Anderson of Plainview, Michael Gollob of Tyler and Beth Weakley of San Antonio.
Comptroller John Sharp will serve as chairman of the board, which is scheduled to hold its first meeting on November 10, 1995.
For more information, call 1-800-531-5441, ext. 3-4223, or write to:
Texas Tomorrow Fund
Texas Comptroller of Public Accounts
P.O. Box 13528
Austin, Texas 78711-3528
Special events centers located at Texas universities have carved a niche in the competition to draw tourism and entertainment dollars.
These arenas provide a home for university basketball and volleyball programs, as well as university-related events such as graduation ceremonies, classes and banquets. Just as important is the mission to attract quality concerts and road shows for the benefit of the surrounding community. These non-university events typically generate the majority of revenue used to cover the centers' operating expenses.
The Texas Higher Education Coordinating Board recognizes five university- based, multi-purpose facilities at Lamar University, Midwestern State University, the University of Texas at Austin, the University of Texas at El Paso (UTEP) and the University of Houston (UH). Recently, Texas A&M University broke ground on its own special events center.
At each university, the impetus to build a special events center grew from the success of the campus basketball program. For example, UT-Austin is usually a top contender for the Southwest Conference title. Midwestern State men's basketball team played in the National Association of Intercollegiate Athletics National Tournament several times in the 1960s. Lamar University competed in the National Collegiate Athletic Association (NCAA) Basketball Tournament in the late 1970s.
UTEP's men's basketball team in 1966 was the last Texas team to win the NCAA basketball championship, and it has since participated in the National Invitation and NCAA tournaments.
Texas A&M's anticipated move to the Big 12 Conference helped solidify plans in College Station for a special events center.
The early venues: The first special events center built at a Texas university was Ligon Coliseum at Midwestern State University in Wichita Falls. The $3.5 million, 4,800-seat facility opened in 1969. The 117,050- square-foot structure gave local residents an opportunity to see concerts and other shows that usually bypassed them. In 1988, the Wichita Falls Texans of the Continental Basketball Association (CBA) began playing at Ligon Coliseum, giving the university and the arena additional exposure.
While the size of Ligon was practical in the 1970s, the center now is considered too small for large concerts and road shows. ln 1994, owners of the CBA Texans moved their franchise to Chicago, leaving Ligon Coliseum with the university basketball program, local high school basketball tournaments and graduation ceremonies.
UH's Hofheinz Pavilion, which opened in 1970 at a cost of $4.2 million, was the first university-based special events center in Texas to seat more than 10,000, enabling it to draw large crowds for athletic, concert and road show events.
A generation later, Hofheinz Pavilion faces intense competition for the entertainment dollar from newer facilities in the Houston area. Concert promoters and performing artists prefer larger, modern venues such as the Summit and the Cynthia Woods Mitchell Pavilion in the Woodlands. Much like Ligon Coliseum, university-related events like basketball games and graduation ceremonies are now the central focus at Hofheinz Pavilion.
Branching out: In 1977, the UT System opened special events centers at UT- Austin and UTEP. University officials felt that each school's highly competitive basketball program deserved larger facilities. UT-Austin and UTEP officials conducted nationwide surveys to determine what type of arena would best fit the needs and size of the universities and their surrounding populations.
UT-Austin's Frank Erwin Center is the largest and most expensive special events center on a Texas campus. The 380,830-square-foot circular structure cost $29.2 million and seats 16,200 for athletic events, 17,300 for entertainment events. UTEP's special events center, with 200,350 square feet, cost $8.9 million and seats 12,000. Funding for both centers came from the UT System's building fund.
While UTEP's presence near the Mexican border has allowed its special events center to capitalize on the growing popularity of Latino and Tejano music, UT's Erwin Center has profited from the capital city's growing reputation as a live music market. Both facilities benefit from a lack of competition from other facilities in their area.
The Erwin Center stays busy. It held about 400 events in fiscal 1994 (some were multiple-day events), which included 148 concerts, road shows or rented events, 53 athletic events, 63 practice sessions and 152 academic sessions. That year the Erwin Center had only 38 days with no event scheduled. The center earned $4.6 million in ticket revenue, $1.2 million in user fees including rental, $529,000 in concession revenue and $256,000 in advertising revenue.
The center spent $4.3 million to pay artists and $1.7 million in indirect costs, including utilities and personnel. When the facility runs a deficit, the financial structure is such that deficits are absorbed by an auxiliary fund shared with other components of the university. Profits go to the auxiliary fund to help with future revenue shortfalls.
The Erwin Center, much like UTEP's special events center and Lamar's Montagne Center, promotes all events held at the arena and offers marketing services for those who rent the facility. Rental fees at the Erwin Center run $2,250 to $3,000 per six-hour period, depending on the time of day the facility is used, plus $250 per hour after the six-hour period.
The last special events center to open in Texas was Lamar University's Montagne Center in 1984. Thanks in part to a successful basketball program and rising attendance, the university built the 145,500- square-foot center for $12.1 million. Montagne Center, with 10,000 seats, is still considered new by industry standards, allowing it to draw top country musical acts such as George Strait, Reba McIntire and Garth Brooks.
Not all plans to develop campus entertainment facilities get off the ground. In 1993, Texas Tech University began planning a 13,000-seat multipurpose arena at an anticipated cost of $38 million to $48 million. Unlike existing special events centers, Tech's would be financed with a half-cent city sales tax increase, which would generate $10 million a year.
City officials felt the new arena would enhance the city's appeal to tourists and provide a new home for the NCAA champion women's basketball team. The men's team has been successful as well, securing recent invitations to the NCAA tournament.
However, Lubbock voters defeated the proposal in January 1994, and no decision has been made to pursue alternate funding.
Useful lessons: Texas A&M University has broken ground on its $33.4 million special events center and plans to open in time for the August 1997 commencement ceremonies. The 12,500-seat center is being financed from student fees and private donations.
As the various efforts to build special events centers make clear, securing funding is the most important step. While communities may profit from increased access to concerts, special events and local sports, they may not be willing to help pay for a big new facility to hold them.
Midwestern State and UH have both scaled back many concert and road show events due to increasing competition from other arena-type venues in the area. In contrast, arenas at UT-Austin, UTEP and Lamar continue to thrive, attracting concerts and road shows to their communities.
Contributing to this article:
Michael A. Greenberg
A typical convention visitor tends to business during the day, then looks for entertainment at night. Whether that means dining at a four-star restaurant or line dancing to the strains of Waylon Jennings, convention- goers spread money all over town.
Texas cities host about 10,000 conventions a year, which translates into a $3 billion economic boost, according to a survey by the Texas Association of Convention & Visitors Bureaus. Half of those conventions take place in Dallas, Houston and San Antonio, which are nationally recognized as appealing convention destinations. Mid-sized cities get into the act too by catering to mid-sized conventions. Waco, Beaumont and College Station hosted a total of 400 conventions in 1994.
Conventions encompass trade shows, banquets, receptions, professional meetings and local events. The mix of activities is determined by the type of business or organization hosting the convention.
The competition to attract conventions is intense and getting tougher all the time. TexasO main competition comes from California and Florida.
Big business: Attending conventions accounts for almost half of all business travel. Conventions add more than $75 billion a year to the U.S. economy and support more than 1.5 million jobs.
Convention facilities operate more often as a large-scale community service than a for-profit enterprise. The purpose of a convention center is not necessarily to make money; in fact, many run an operational deficit, even some of the large ones. Rather, the purpose is to attract out-of-town business and generate economic activities throughout the city. The groups that profit most from conventions are local hoteliers, restaurateurs and retailers.
In fact, conventions could not exist without these industries and the services they supply. Employees range from decorators to audio/visual technicians, from chefs to bellhops.
The Houston Convention & Visitors Bureau figures the hotel industry is the big winner economically where convention profits are concerned. It determined that 45 percent of delegate spending goes to pay for hotel rooms, almost 60 percent when hotel dining is included.
The overall economic impact of conventions varies according to an association's budget and the number of days delegates stay. In Houston, the average delegate in 1993 stayed 3.5 days and spent $638, according to the Convention & Visitors Bureau. Delegates at national or international conventions spent more than twice as much as delegates attending state or local conventions.
Dallas is the uncontested convention champ in Texas. In national surveys, Dallas ranks among the most popular meeting sites in the U.S., often beating Los Angeles and New York City. Dallas drew 3.4 million delegates last year.
Meanwhile, Houston holds the Texas title for getting the largest conventions. In 1995, Houston hosted the National Association of Home Builders, one of the largest associations in the nation, which brought almost 70,000 delegates to the city for five days. In 1992, Houston was in the national spotlight with the National Republican Convention, attended by 49,000 GOP loyalists.
Paying the bills: The hotel/motel occupancy tax is the primary funding source of convention facilities and promotional activities. About 300 cities and 13 counties levy the tax. Cities may charge up to 7 percent of the cost of a room; in combination with the county portion, the maximum local tax is 9 percent.
A Texas Department of Commerce survey shows that the majority of hotel/motel tax revenue goes to support the local convention and visitors bureau and to pay for the operation of convention facilities.
This form of taxation is popular with local residents because out-of-town guests pay the tab. In fiscal 1994, cities and counties raised a total of $169 million through the local hotel/motel tax.
Also, Texas levies a state hotel/motel tax of 6 percent, which is the highest state rate in the nation. About $146 million in state revenue was raised in fiscal 1994. The state tax applies not only to guest rooms but to any meeting and banquet rooms used by the conference in the same building.
The only groups exempt from paying the state hotel/motel occupancy tax are religious, charitable and state education institutions.
Other taxes that can affect convention business are the state food and beverage tax, motor vehicle rental tax and sales tax. Like the hotel tax, these taxes are taken into consideration when associations do cost comparisons and decide where to hold their conventions. But these taxes are not prohibitive because associations often negotiate hotel rates in advance.
Convention cities have to be careful not to tax themselves out of the market. In the most popular meeting sites around the country, the combined state and local hotel tax rates range from 9 percent in Boston to Chicago's 14.9 percent. In Houston and San Antonio, the state and local tax rates add up to 15 percent.
John Nuveen & Co., a municipal bond underwriting firm, reports that hotel taxes as high as 20 percent will quickly slow convention traffic, but rates of 15 percent do not appear to hinder business.
Being competitive: One reason Texas is competitive nationally is because of the rich variety it offers. If one city does not meet a need of a particular group, another city probably can.
Except for sweltering summers, the Texas climate is relatively pleasant-especially from September to November when conventions are busiest nationally. During these months, school is back in session, new products are being marketed and commercial activity is gearing up.
The busiest convention cities in Texas are not merely lucky. They vigorously pursue the market by making sure they have the facilities suitable for large confabs.
The Dallas Convention Center, with 800,000 square feet of exhibit space and 105 meeting rooms, advertises that it is longer than any other building in the world is tall.
Houston has the Astrodome, with 550,000 square feet of exhibit space and an additional 280,000 square feet of space in the arena and exposition center; and the George R. Brown Convention Center, with 451,500 square feet. The latter benefits from the proximity of the theater and museum districts and many downtown restaurants and night spots.
San Antonio is just beginning to reach its potential in the industry. The city has become a major competitor by promoting its Mexican heritage and offering attractions such as theme parks, a professional basketball team and the Riverwalk. According to the San Antonio Convention & Visitors Bureau, the city attracted almost 600,000 delegates in 1994.
To become more competitive, San Antonio plans to renovate and expand its facilities, beginning in mid-1996. New construction and renovation of the Henry B. Gonzalez Convention Center, part of the Hemisfair Arena, is expected to cost $175 million and will almost double the contiguous square footage available for convention exhibits to 440,000 square feet by the year 2000.
Bottom line: While every convention city heavily promotes its assets, all admit to having shortcomings. In Dallas and Houston, it is the absence of a convention center hotel. While El Paso markets its heritage and proximity to Cuidad Juarez, officials admit the city is rather isolated for a convention site and can be costly to reach.
Austin has one of the newest convention facilities in the state with 125,000 square feet of exhibit space, but its lack of hotel rooms has cost the city millions of dollars in convention-related revenue.
Nonetheless, each city continues to polish its image and emphasize factors such as adequate meeting space, local attractions and a safe environment. Advertising and public relations campaigns are conducted year- round, and sales teams work the phones.
At the same time, these cities say they are boosting their civic pride and enhancing their image.
Contributing to this article:
For many Texas businesses, staying competitive in the 90s has meant doing more work with fewer employees. In the spirit of streamlining, companies are relying more and more on temporary workers.
On an average workday in 1994, Texas companies employed about 140,000 workers through temporary agencies, or about 1.7 percent of the total work force, according to the National Association of Temporary and Staffing Services (NATSS). In 1989, the daily average was less than half that level.
Houston businesses hire the most temps in the state, about 35,000 a day, with an annual payroll of $565 million. Dallas companies employ about 32,000 temps a day, Fort Worth/Arlington, 8,000; San Antonio, 7,300; Austin, 5,700; and El Paso, 3,700.
Increases in temporary help often coincide with strong overall economic growth, NATSS reports, as companies cope with work overloads and special projects. Temporary employment leveled off slightly in 1993, following accelerated growth in 1992, the first full year of the national economic recovery.
Some companies hire temporaries as a cost-cutting measure to eliminate health care and pension costs. More and more employers, however, hire temporary workers as a way of screening potential new hires. The Texas Association of Staffing (TAS) estimates almost four out of 10 temps stay on as full-time employees.
The reasons workers seek out temporary posts are as varied as the types of jobs they take. A 1993 survey by Lauer, Lalley & Associates, a Washington-based economic/market research firm, showed about half are trying to make ends meet between permanent jobs. One-third say they enjoy the flexibility and freedom that come with choosing their own work assignments.
And while the majority of temp workers are women, male temps are increasing in number. According to NATSS, 28 percent of all temp workers were male in 1993, up from 20 percent in 1989.
Market trends: Traditionally, most temporary positions have been office/clerical jobs, but the field is changing. NATSS reports that secretaries, data entry clerks and cashiers made up 43 percent of the nation's temporary workers in 1993; industrial workers made up 30 percent; and technical workers, including computer programmers, systems analysts and engineers, made up 12 percent. Medical temporaries (including supplemental staffing for hospitals and nursing homes, nurses and medical technologists) represented 6 percent. Texas figures mirror these national percentages, according to TAS.
Professionals make up an expanding segment of the temp market. For many doctors, accountants, engineers and lawyers, the flexibility of working on a case-by-case basis is attractive. Professionals made up 5.2 percent of the temporary work force in 1993, up from 2.4 percent in 1991.
Low-paying temporary jobs also are on the upswing, and the education level of many workers has dropped. In 1993, 28 percent of temp workers had some college education, down from 36 percent in 1989.
Even though education levels are slipping, skill levels appear to be high, especially in computer use. In the 1993 survey, 84 percent of temporary workers reported having computer data entry and word processing skills. Forty-five percent had bookkeeping/financial skills, 42 percent worked with computer databases, 23 percent had experience with desktop publishing and 13 percent were familiar with advanced computer systems.
The age of the typical temporary worker is up also. In the last five years, the 35- to 64-year-old category climbed 10 percent, now making up half of the temp work force. The number of temps ages 16 to 24 declined from 28 percent to 19 percent. The 25- to 34-year-old category remains at about 29 percent.
This shift has been attributed to the aging of the population and the growing demand for temporary workers with more advanced skills and experience. Many mature workers find they need a source of secondary income, yet one with a certain degree of flexibility.
Contributing to this article: