R&D on the rise at Milwaukee-area universities

A recent Public Policy Forum report looked at the impacts university research can have on local economic development and presented several models that could help to expand technology transfer in southeast Wisconsin. We found that while coordinated infrastructure is needed to convert research into new businesses and jobs in the local economy, the impact on local economic development is also related to the level of investment in research.

New data from the National Science Foundation on total university research and development spending reveals positive trends for Milwaukee. Four Milwaukee-area universities combined to invest $281 million in research and development in 2010, up from just over $100 million in 2000. In addition, while the collective research investments at Milwaukee institutions are still far lower than the over $1 billion spent by UW-Madison, which ranks third in the nation in research spending, Milwaukee-area universities collectively increased research spending at a significantly faster rate than UW-Madison over that time period.

The table below shows the growth in R&D expenditures at Milwaukee, Madison, and Chicago universities over the past 20 years, as well as the national rank for each institution on that measure in both 2000 and 2010. The Medical College of Wisconsin has more than doubled its R&D expenditures since 2000 and now is poised to become one of the top 100 research institutions in the U.S. UWM has made large gains as well, more than tripling its R&D expenditures since 2000.

Source: National Science Foundation – National Center for Science and Engineering Statistics

The following table shows the total R&D spending at Milwaukee, Madison, and Chicago universities since 1990. The collective investments of Milwaukee’s universities have grown from 18% of that of UW-Madison in 2000 to 27% in 2010. As a group, Milwaukee’s universities have expanded research spending at a faster rate than Chicago’s universities as well.

It will be interesting to track these investments over the next 10 years, especially in light of UWM’s major research and development push, which includes expanding the Great Lakes Water Institute, developing the new Innovation Park in Wauwatosa, participating in the water research and business accelerator at Reed Street Yards, and planning a new interdisciplinary research center for UWM’s main campus.

Due to the highly collaborative nature of many research efforts, a rising profile for Milwaukee universities could have compounding affects, as Milwaukee researchers become more attractive partners for research efforts taking place at UW-Madison, at universities in Chicago, and beyond.

Of course, new research facilities and more research dollars will not automatically provide substantial benefits to the local economy. As we found in our report, Technology Transfer in Southeast Wisconsin, the ability of entrepreneurs to develop new businesses from university research, and the channels by which to do so, are the other crucial elements.

Should we be concerned about the decline in family child care providers?

During the debates over Wisconsin's new child care quality improvement initiative, the YoungStar quality rating system, it became clear that an anticipated trade-off for quality improvement was likely to be a reduction in the number of child care providers.  The providers predicted to most likely be negatively impacted were family child care providers (who care for small numbers of children in their own home), as the new quality standards would differ dramatically from the current certification and licensing requirements for these providers. In addition, the Forum's own survey work found family child care providers to be less likely to have the financial and organizational resources needed to make significant investments in quality.  Finally, many observers felt there could be an over-abundance of family child care providers, particularly in Milwaukee County, and that increased parental demand for higher quality care might expose that reality.

In fact, according to a recent analysis by the Wisconsin Council on Children and Families (WCCF), there has been a significant decline in the number of family child care providers, as compared to years prior to YoungStar.  Statewide, there has been an 28% decrease in the number of family providers over the past seven years, including a 63% decrease in the number of certified providers, who had the least rigorous regulatory requirements prior to YoungStar.  WCCF finds the drop in family child care providers in Milwaukee County to be even more dramatic, with a 33% decline in just the past four years.

Should these results be troubling?  It's hard to say.  While there is a need to monitor whether this reduced supply in the family child care market negatively impacts child care access, to date there is no indication that parents have less access to quality care despite the reduced number of slots.  The changes may simply mean the supply has adjusted to match demand.

Conversely, at least a few child care providers feel the new regulations, coupled with the state Department of Children and Families' focus on fraud reduction, are having an unconstitutional disparate impact on African-American child care providers in Milwaukee and several have filed a federal law suit.  Although the claim does not provide statistics, it does seem possible that most of the suspended licenses and certifications were held by African-American providers.  As of March 2012, of the 281 providers listed on the website of the Department of Children and Families as suspended, the vast majority (90%) are located in Milwaukee. The state does not report the race of these providers, but the Forum's 2010 survey of child care providers found that while 10% of Wisconsin's providers are African-American, the rate increases to 48% in Milwaukee County. Thus, to the extent Milwaukee providers make up most of the suspended providers, it is likely that African-American providers are over-represented among them.  Whether this is a disparate impact and, if so, whether it is intentional will likely be difficult to prove.  However, even if no intent is found, if the perception that the state is targeting Milwaukee's African-American providers is widespread in the city, it may prove to be a significant hindrance to the state's efforts to reach out to Milwaukee parents about the importance of choosing a high-quality provider.

Another concern may arise if the family child care providers who have left the market stay unemployed or leave the labor force altogether.  The Forum found in our 2010 report, "Moving the Goal Posts: The shift from child care supply to child care quality," that the state's restructuring of the subsidy program was likely to have unintended consequences for child care providers.  We cautioned that "if this system reform is to be effective, then it is important to understand that the child care system we have today is the result of policy goals originally designed to impact the supply of care..."  Reforming welfare and creating a new child care subsidy program enabled low-income parents to join the workforce, including thousands who found new jobs as family child care providers.  The subsidy program was designed to emphasize child care supply over child care quality in order to effectuate the goals of welfare reform. It is important to recognize that these supply-oriented actions created jobs in the child care market; dramatic quality-oriented changes in the market will now affect those same jobs.  


Finally, given the fact that family child care is less expensive than center-based care, any decrease in the supply may negatively affect families who cannot afford to utilize a child care center.  YoungStar is designed to make higher quality care more affordable to low-income families by increasing the subsidy rate for higher quality care.  Whether the increase is enough to neutralize the impacts of the decreased supply in the low end of the market over the long term is yet to be seen.  For now, families appear to be able to remain the in the regulated market.  However, there remains a potential for growth in cheap, unregulated care, which should be monitored.  

A closer look at non-instructional expenditures in suburban school districts

The Forum released a new report this morning that examines out-of-classroom expenditures in Milwaukee County's suburban school districts. The examination was prompted by the increased pressure faced by most districts to identify operational cost savings while also maintaining or enhancing academic performance. Given the apparent conflict between the two imperatives, non-instructional areas of spending are likely to receive increased focus for possible cost-saving opportunities, including possible service sharing with other districts or local governments.

The report focuses on the dollars spent on non-instructional support services, including administrative, "back office" functions (e.g. payroll, accounting, information technology); administration of ongoing operations and school buildings; non-instructional pupil services, such as social work and guidance; and instructional staff services, such as curriculum development and staff training.

Among our key findings:

• Milwaukee County suburban school districts tend to spend more on support services per pupil than their peers from across the state. This finding is particularly perceptible for the smaller and wealthier school districts in the county.
• Fourteen of the 17 Milwaukee County suburban districts are at or above their peer medians in support services expenditures when measured as a percentage of total expenditures. Consequently, support services expenditures constitute a greater proportion of these districts’ budgets and require a greater share of district revenues.
• There is considerable variation within Milwaukee County in support services expenditures per pupil, ranging from $3,220 at Oak Creek-Franklin to $7,035 at Nicolet, and from 29% of total expenditures at Cudahy to 39% at Nicolet and Fox Point-Bayside. Nicolet and its small feeder districts, among the wealthiest districts in terms of property values, generally have the highest expenditure totals per pupil, while the largest districts (Oak Creek-Franklin, West Allis, and Wauwatosa) are among the lowest.
• Many Milwaukee County suburban districts are cooperating with neighboring school districts in providing administrative and other services. Nevertheless, the report identifies three areas of shared services saving opportunities that may hold promise for additional cost savings: cooperative health insurance purchasing, back-office operations, and regional networking.

The report finds that consolidation of back office operations is perhaps the most intriguing of the three options examined, particularly for the Nicolet district and its three feeder districts, all of which are small in size, with high costs, and a tradition of inter-district cooperation. Residents in small- and medium-sized districts in the southern part of the county also might find this attractive given their traditional concerns about cost, and the fact that district borders cross several other municipal taxing jurisdictions, allowing costs to be spread among a larger tax base.

We hope the suburban school districts will consult the expenditure data included in this report as they consider internal fiscal and program evaluations and contemplate budget strategies. We fully expect each district to do so, of course, in the context of its own fiscal and educational circumstances, which may include a preference for a level of services that costs more, but that they determine best meets student needs.

A full copy of the report can be accessed here, and our media release here.

How does a new mental health facility fit into the county's infrastructure picture?

The decision last week by Milwaukee County's Health and Human Needs Committee to "put the brakes" on planning for a new inpatient mental health facility - as reported in the Milwaukee Journal Sentinel - was welcomed by many mental health advocates, who have been urging the county to prioritize community-based care and substantially shrink its inpatient capacity. That sentiment is largely consistent with the recommendations of a national consultant - the Human Services Research Institute - contained in a 2010 report co-authored by the Public Policy Forum.

But also embedded in the committee's decision - as reflected by comments from the county executive - is the encouraging recognition that any possible new mental health complex must be considered within the context of the county's overall infrastructure needs.

For the past several years, as supervisors and administrators have argued over where and how large to build a new mental health complex, they have done so without the perspective of an overall facilities management and capital financing plan. Such a plan is needed not only to provide a clearer picture of the breadth and cost of the county's total infrastructure challenges, but also to assess how a potential significant investment in a new mental health complex will jive with the county's limited borrowing capacity.

The need for such a plan also was hammered home last week by a new report from the county's parks director, which recommended spending $15 million in each of the next five years to address a significant infrastructure backlog.

To put that request into context, the county currently has a policy that caps annual borrowing for capital needs at a little over $30 million. That means if policymakers heed the recommendation and want it to be part of the county's annual general obligation bonding, then almost half the annual allotment would be used simply for repairs and maintenance in the parks. That, in turn, would leave little room for capital needs related to the Zoo, Courthouse Complex, corrections facilities, information technology, transit, economic development, and county trunk highways.

The good news is that per a recommendation of its Long-Range Strategic Planning Committee, the county has hired a consultant to perform a comprehensive analysis of its existing infrastructure and help develop a master infrastructure plan. It is within the context of that planning process and the ongoing deliberations about the nature of the county's mental health care delivery system that the discussion about a new mental health complex would best proceed.

Chicago's new economic development plan a good model for Milwaukee

The Public Policy Forum's November 2011 report on Milwaukee's economic development landscape - Assembling the Parts - has triggered considerable discussion about the need for strategic economic development planning in Milwaukee. Calls for such planning have been championed by the Milwaukee Journal Sentinel's editorial board and echoed by some business leaders. The response from city officials, however, has been tepid thus far.

Part of the problem, as we noted in Assembling the Parts, may be the impression that strategic economic development planning satisfies the demands of think tanks and academics, but fails to have real-world value. If that's the case, then skeptics may wish to check out the plan released by the administration of Mayor Rahm Emanuel in Chicago yesterday.

The aim of the 60-page Chicago plan, as the Chicago Tribune puts it, is to "shake up the status quo." The plan is highlighted by a thorough market analysis of the city's economic strengths and weaknesses, which is developed through the lens of five key market levers: clusters, human capital, innovation/entrepreneurship, infrastructure and public/civic institutions. That analysis is then used to establish 10 concrete strategies that "best position the specific advantages of Chicago and the region within the context of the global economy."

The rationale for Chicago's planning process is virtually identical to that outlined for Milwaukee in Assembling the Parts. The Chicago plan's "Call to Action" argues that "an economy the size of ours requires a coordinated, articulated economic development process by which the public and private sectors can align interests, investments and actions." Another key point of similarity is that key consultants to the Chicago planning process included the Brookings Institution and others involved in its metropolitan business planning initiative, mirroring a suggestion by the Forum (and backed by the Journal Sentinel) that Brookings be invited to guide our planning effort.

The Chicago plan also may provide a worthwhile model for Milwaukee as it seeks to define the geographic scope of an economic development planning process. While it was commissioned by the city and its focus is mainly city-based, the Chicago plan also recognizes the regional nature of the local economy. As noted in the report, "the Mayor directed that the plan start with a focus on the city and look outward, facilitating partnership to leverage assets and accelerate growth for the entire metropolitan region."

For those who are unclear about the concept of strategic economic development planning, the Chicago plan offers an excellent point of reference. And for those who are skeptical about the need for such planning in Milwaukee, it offers living proof of its potential utility as a means of establishing priorities and aligning the activities of public and private sector players.

Fighting an uphill battle

It always feels a bit discomforting to say, "Race and economic status are highly correlated to academic achievement." Children can change neither their race nor their income; a statement like the one above can feel like saying these children also cannot improve their academic achievement. But when confronted with the lackluster-to-dismal achievement data of many Milwaukee schools, where the race and income patterns are so stark, its hard to avoid making that statement.

As the Forum's recent report on the Milwaukee Parental Choice Program found, these patterns appear among private school students as well as public school students. In both the public and private sectors in Milwaukee, there are very few schools enrolling predominantly minority and low-income students producing high test scores. (Even among the suburban public schools with fewer minority or low-income children, we've found that as those populations have grown, aggregate test scores have declined.) And while the private school data are new, are they really news, considering how entrenched the pattern has been in the public schools?

What is news is the fact that, while the nation's schools have made some progress in closing the racial achievement gap, the income achievement gap has grown significantly. A recent New York Times story highlights the research of Sean F. Reardon, a Stanford University sociologist, who analyzed data from 12 national studies starting in 1960 and ending in 2007 and found that while the average black-white racial achievement gap has shrunk in half since the 1960s, the gap between children from the wealthiest and poorest families has grown 40% in that time, and is now twice the size of the racial achievement gap.

Schools with low-income students in their charge, whether public or private, are fighting against a nationwide, decades-long trend. While several of these schools, on an individual level, have stellar outcomes, educators are still hunting for the best strategy to improve outcomes system-wide. The hunt requires even more urgency now--the recession is creating more, not fewer, poor families.

Most new voucher users already were enrolled in private schools

The Forum's 14th annual census of schools participating in the Milwaukee Parental Choice Program (MPCP) finds that voucher use by Milwaukee students grew 10% in 2011-12 to 23,198 voucher students, reversing last year’s enrollment decline. In addition, the data indicate that most voucher students are attending hyper-segregated schools that have low reading and math proficiency rates.

The dramatic increase in voucher use is likely due to changes to the program in the most recent state budget, which allowed schools outside Milwaukee to join MPCP and expanded eligibility to include families at higher income levels. As a result, more than 2,200 additional students are using vouchers worth $6,442 each, increasing the program’s cost by $14.2 million.

Most of the new voucher users appear to have already been enrolled in private school. In 56 schools, the number of new voucher users exceed the growth in total enrollment in the school, while in 13 schools voucher growth and enrollment growth were equal. Over the past 10 years, total enrollment in the schools participating in the program has grown by roughly 5,300 students, while the number of voucher users has increased over twice as much.

More students are eligible for vouchers because the income limits for voucher were raised to 300% of the Federal Poverty Level, which means that a family of four earning up to $67,050 per year is now eligible. The median household income in Milwaukee is $35,921 per year. Under the new rules, once a student qualifies for a voucher, he or she remains eligible for all subsequent years, even if the family’s income grows.

The report also includes an analysis of the 2010-2011 state standardized test results of the participating schools, finding that performance among the MPCP schools varies widely. There are a few patterns in the data, however. Reading proficiency rates are higher, on the whole, than math proficiency rates. In addition, schools with fewer voucher users and fewer minority students tend to produce higher proficiency in both reading and math, as do the Catholic and Lutheran schools.

The poor test scores are likely related to the socio-economic and racial demographic make-up of the schools, which mirror the Milwaukee Public Schools, in the aggregate. Nearly half of all MPCP schools have student bodies that are at least 90% minority and/or 90% low income; 65% of all voucher users attend one of these schools.

The report also includes updated data on enrollment trends, schools gaining and losing the most MPCP students, and the aggregate high school drop-out rate. Schools participating in Racine’s new Parental Private School Choice Program are included as well.

The full report and an interactive database of school information are available on the Forum's website.