Interesting tidbits from Texas Transportation Institute Study

Television and newspaper coverage of the new Urban Mobility Report from the Texas Transportation Institute (TTI) has emphasized the $300 million annual cost of traffic congestion to Milwaukee area commuters while also acknowledging that Metro Milwaukee's traffic conditions are tame when compared to other urban areas.

A review of the full set of performance measure data yields several additional interesting tidbits and questions that may be relevant to taxpayers and elected officials as we prepare for billions of dollars of expenditures on I-94 reconstruction and expansion and a major overhaul of the Zoo Interchange, and as we continue to debate new transit options for the region. Here are a few:

1. The mobility data - which tracks back to 1982 - indicates that while freeway congestion levels in Metro Milwaukee grew considerably from the early 1980s to mid 90s, they have leveled off since then. For example, while the average Milwaukee peak hour commuter suffered seven hours of delay per year in 1982, that number tripled to 21 in 1993. Since that time, however, it has stayed about the same, and even decreased to 18 in both 2006 and 2007. Does this finding cast doubt on the accuracy of repeated projections that traffic congestion in Metro Milwaukee would grow precipitously without major investment in added freeway capacity? Or, conversely, does it support the value of investments we have made on a new Marquette Interchange and other improvements? Does the data speak mainly to freeway congestion, which may have reached its natural limit, as opposed to congestion on parallel arterials, which may have increased instead? Also, how does this finding mesh with recent projections utilized to plan the I-94 and Zoo Interchange projects?



2. A key indicator used by the Texas Institute is a Travel Time Index, which measures "the ratio of travel time in the peak period to travel time in free flow". Milwaukee's Travel Time Index in 2007 was 1.13, which means a trip that would take 20 minutes in free flow conditions would take 22.6 minutes on average in peak periods. Again, a look at the historical trend shows that this index leveled off in the mid 90s and is lower in 2007 than it was earlier in the decade. But what is perhaps most striking is just how low the index is. With an average two-and-a-half minute delay in peak conditions versus free flow for a 20-minute commuter, should we be surprised that highway expansion proposals often are contentious? Likewise, is the lack of intolerable traffic congestion in Metro Milwaukee perhaps the biggest reason why proposals for modern transit investments have not taken hold here as they have in other cities? Should the other benefits associated with such transit investments really be the basis for our deliberations?



3. TTI tracks "operations strategies" utilized to manage congestion from 2000 to 2007. This data indicates significantly greater usage of three such strategies in Milwaukee: freeway ramp metering, freeway cameras, and better signal coordination on arterials. Is there a need to further explore the causal relationship between these lower cost strategies and steady congestion levels in Metro Milwaukee before we consider costlier alternatives?

There's a lot of data in TTI's report, and it certainly can be used by advocates on all sides of the transportation spectrum to make the points they wish to make. Let's also hope that in the course of our upcoming transportation deliberations, those presenting options to policymakers and citizens also make fair and objective use of it.

Is there an optimal rate for municipalities to use tax increment financing?

Tax incremental financing (TIF) is the most widely used economic development tool of local governments in Wisconsin. TIF uses future property tax revenue to provide up-front assistance for real estate developments. Notable projects such as Grand Avenue Mall and the recent redevelopment of Bayshore Mall relied heavily on TIF assistance. TIF plays an integral role in our region’s economic development.

While TIF use is growing throughout the state, its benefits and the extent to which communities should use TIF are still hotly debated.

The work of the Forum’s 2008-2009 Norman N. Gill fellow, John Kovari, has resulted in a research brief Too Much or Not Enough?: A Statistical Analysis of TIF in Wisconsin, which adds to the debate and takes a closer look at TIF and its economic benefits.

Specifically, the report explores the relationship between TIF and property values at the local and regional level using economic data from all Wisconsin municipalities between 1990 and 2006. Economic, statistical modeling provides an estimate of the average impact of TIF on property values in a way that might be useful for local officials in making economic development decisions.

The report’s key findings:

* TIF Growth. TIF utilization in Wisconsin municipalities has grown considerably (400%) since 1990, especially in the southern and central areas of the state. More than one quarter of the municipalities using TIF are now over the statutory TIF value limit.

* Who Uses TIF? Medium-sized municipalities (under 50,000 residents) and those with growing property tax bases are using TIF more often than those with lower rates of property value growth, including Wisconsin’s biggest cities. Although TIF was originally intended to spur economic development in struggling areas, TIF is being used more frequently by communities that are experiencing economic growth.

* TIF Benefits. TIF has the potential to be a useful economic development tool for villages and cities in redeveloping “blighted” properties and raising property values. On average, for every $1 increase of TIF value, total property value is estimated to increase by $6.

* Differences Across Communities. Differences in TIF use exist between Wisconsin’s largest metropolitan cities and outlying municipalities. On average, outlying localities are at risk of over-utilizing TIF. Statistical modeling estimates that if the average Wisconsin suburb were to increase its TIF amount by 10% (keeping all other factors constant), then its total property value would likely decrease by 0.2%. Meanwhile, Wisconsin’s largest cities appear to under-utilize TIF: the model indicates that a 10% increase in TIF value would likely increase property values by 2%.

* Regional TIF Effects. Within Wisconsin’s metropolitan regions, greater TIF investment in suburban communities may impair property value growth in the corresponding central city (i.e. Wisconsin’s largest cities). According to the model, a 10% increase in suburban increment value would likely result in an estimated 1.1% decrease in central city property value.

Overall, using historical data to model estimated TIF impacts suggests that excessive TIF use has the potential to negatively impact the economies of individual communities as well as Wisconsin’s largest cities. In other words, excessive TIF use (especially in outlying municipalities) may potentially create a scenario in which property value growth in the state is impaired.

At the same time, TIF can be a successful tool in redeveloping areas in Wisconsin’s largest cities. The model suggests that these cities (those over 50,000 residents) have not utilized TIF at the ideal rate to maximize property values.

Local and state officials are encouraged to look at TIF in a way that asks whether their communities are using TIF “Too Much or Not Enough.”

Special thanks to the Gill family for their generous support of this project through the Norman N. Gill Fellowship.

The future is today for STEM-savvy workers

The Forum's latest report, on the need for science and math skills in the state's future workforce (which was reported in Sunday's Milwaukee Journal Sentinel and followed-up with an editorial today) highlights opportunities for the state to strengthen policies regarding science, technology, engineering, and math (STEM) education in K-12.

And while our findings focus on forecasted workforce needs, today's New York Times reports that the few occupations where the current recession has had only a glancing blow are those requiring skills in math, science, or technology:

[The Conference Board's] monthly count of online job openings — listed on Monster.com and more than 1,200 similar Web sites — breaks the advertised openings into 22 broad occupational categories and compares those with the number of unemployed whose last job, according to the bureau, was in each category. In only four of the categories — architecture and engineering, the physical sciences, computer and mathematical science, and health care — were the unemployed equal to or fewer than the listed job openings. There were, in sum, 1.09 million listed openings and only 582,700 unemployed people presumably available to fill them.

In addition, like the Forum's report, the Times article does not limit its observations to just those jobs requiring a college degree. The article notes that "middle skills" jobs are those hardest to fill right now, in the midst of the recession; for example, welders, electrical linemen, and respiratory technicians. These jobs require education, but often not more than high school, along with some training and on-the-job experience.


For today's high school graduates, being adequately prepared to step into a training program could mean not only finding a job when others cannot--it could mean the difference between thriving and surviving as their future arrives.

Is Wisconsin state-of-the-art for K-12 science and math education?

The Public Policy Forum's latest report, released today, finds that of the 10 career clusters predicted to grow the most over the next five years, seven include occupations requiring strong backgrounds in science, math, technology, or engineering (STEM). Of the 10 specific jobs predicted to be the fastest growing in the state, eight require STEM skills or knowledge and six require a post-secondary degree.

Do Wisconsin's state educational policies reflect this growing need for STEM-savvy and skilled workers? Are Wisconsin education officials focusing on STEM in a coherent and coordinated way? Our new report probes those issues by examining state workforce development data and reviewing state-level policies and standards that impact STEM education.

We present several policy options that could be considered to build on localized STEM initiatives and establish a greater statewide imperative to prioritize STEM activities in coordination with workforce needs. Those include:

* Strengthening state standards in science, math, and other STEM fields, creating model curricula in STEM fields, and aligning standards to workforce needs and college matriculation requirements.

* Creating incentives to recruit and retain qualified STEM teachers and ensuring districts use teacher standards and professional development goals in hiring, evaluation, promotion, and possibly compensation.

* Creating incentives for more coordination of local efforts and increasing support, both financial and regulatory, for district-level STEM initiatives.

The data indicate that a coordinated state-level focus on STEM education will be critical in meeting our state's future workforce needs. Is Wisconsin up for the challenge?

Go to the full report: PREPARING THE FUTURE WORKFORCE Science, Technology, Engineering and Math (STEM) Policy in K12 Education

The art of selling tap water

In a bid to solve some of the city's budget woes, a proposal was floated last fall to privatize the city water works. Opponents of the idea noted that privatization would likely mean higher costs to water users, which in turn caused the common council to consider keeping the water works and just raising prices themselves. They are currently studying their options. But how will they convince city water users that the higher price is worth it?

According to Governing Magazine's blog, many cities are now marketing their tap water, although not necessarily to justify higher prices. New York and San Francisco market tap water as a means to reduce bottled water consumption and "green" their cities.

But over in Europe, Venice, like Milwaukee, is struggling with budget problems. Without streets, garbage collection in Venice is quite costly, so the city is aiming to reduce bottled water usage, and the amount of garbage collected, by promoting tap water. Venetian water has been branded "Acqua Veritas," complete with fancy logo and promotional appearances by the city's mayor.

Could "L'eau Milwaukee" be the next hip drink? Imagine the advertisements covering every bus shelter: "Tom Barrett drinks Milwaukee tap water, do you?"

Child care quality: Third time is not a charm

Governor Doyle's third attempt to include a Quality Rating and Improvement System (QRIS) for child care made it through the joint finance committee this time around, but appears not to be included in the Assembly and Senate versions of the budget bill. A QRIS is a voluntary rating system for child care providers that is designed to recognize quality and provide incentives to improve quality, while also allowing parents to compare quality across providers.

The most simplistic explanation for the failure of the QRIS in the past three budgets has been funding. In the first go-round, the system was introduced with an assumption of no net fiscal impact, which was unrealistic at best and disingenuous at worst. Last biennium, the price tag was attached and was deemed too pricey. This time, the Governor's proposed budget included the policy framework in this biennium, with the funding to be appropriated in the next biennium; in these uncertain times, lawmakers were reluctant to commit future funds.

Not having a child care QRIS puts Wisconsin out-of-step with other states, the majority of which have or are planning one. So how do they fund theirs? Most do as Wisconsin might have, with a tiered child care subsidy program that re-distributes the federal TANF (commonly known as welfare) funds for child care unevenly--recipient parents choosing higher quality child care get subsidized at higher rates. This, of course, necessitates that low quality child care is subsidized at a lower rate. (This lower rate would have to be lower than the current rate in order for the QRIS to cost the same as the current subsidy program.)

One state has gone about it differently, however. Louisiana has created four different tax credits to provide the fiscal incentive for participation in the state's QRIS and for improving quality. Notably, three of the four tax credits are refundable, meaning that even taxpayers who don't owe taxes can take advantage of them. The tax credits are supplemental to the state's child care subsidy program and do not replace the subsidy rates. But they are intended to provide incentive for parents and providers to participate in the QRIS and to help make quality improvements affordable.

The credits are for families who choose providers in the QRIS, with higher credits for those choosing higher quality care; for providers who participate in the QRIS, based on their quality rating and the number of subsidized children they serve; for teachers and directors who work in centers that participate in QRIS, based on their level of training and education; and for businesses that make donations to QRIS providers.

The hope is that the credits will impact consumer behavior by creating fiscal incentives for parents and providers to create a demand for higher quality in the child care market. The theory is that the tax benefits will be widely marketed by the industry, similarly to the home mortgage tax deduction, which is promoted by real estate agents, banks and developers who encourage home buyers to take it into consideration when making decisions about the home they purchase. Louisiana has hired a marketing firm to create a social marketing campaign for both the ratings system and the tax credits.

As these tax credits have been in place for just one year, it is too early to tell who is taking advantage of them and to what extent. The state estimates 1,247 teachers and directors and 73 centers were eligible for them, totaling approximately $3.5 million in state tax benefits. As centers improve their quality and earn higher ratings, and as more centers participate in the QRIS, that dollar figure would grow.

Whether Wisconsin might follow in Louisiana's footsteps is highly questionable. Supplementing federal child care subsidy dollars with state tax credits hasn't been on the table here even when a QRIS was on the table. Also, Louisiana, which passed the legislation creating its tax credits last year, before the recession was in full swing, was one of the few states not running a budget deficit at that time.

Unlike a budget appropriation, which is subject to change each year, tax credits must be repealed in order to be eliminated or reduced, which is significantly more difficult politically. Thus, Louisiana's program will likely have more stability than those of other states and will thus be monitored very closely by policy researchers. Among the questions to be answered--Will it increase participation in the QRIS? Will it increase child care quality? At what cost?

Milwaukee County's disappearing budget "deficit"

While elected officials and bloggers pontificate about Milwaukee County's mysteriously disappearing budget deficit (now down to an estimated $650,000 based on a new report by the county auditor and county board fiscal and budget analyst, after earlier being estimated at $14.9 million by executive branch officials), there is a pressing need for some non-emotional context. Here goes:

1. It is far from unusual for early year projections of Milwaukee County budget deficits to be reduced as the year progresses. This circumstance stems primarily from two factors: a) the logical and justifiable impulse for county budget officials to be extra conservative early in the year, recognizing that if action isn't taken to address problem areas by spring or early summer, then the situation can spiral out of control by fall, when it is too late to enact meaningful fixes; and b) county departments are motivated to report projected deficits early in the year so that those may be addressed, but far less motivated to report potential surpluses because of uncertainty as to future problems that those surpluses would be required to cover.


2. Reduction of an early year deficit of $15 million to close to zero within a month is highly unusual. It is critical, however, to read the fine print of the audit/county board staff report to understand how that happened. Of the $14.3 million reduction, $5 million is attributable to assuming the receipt of revenue from UWM by March 2010 for the recently approved county grounds land sale (which the report pointedly notes is highly questionable), and $4.4 million is attributable to specific deficit reduction actions taken by the county as a result of the earlier shortfall projection. If you take those two factors out of the equation, then the swing is $5 million, which is not at all uncommon for this time of year. This swing can be chalked up mainly to new information uncovered since the original projection and reasonable disagreement between administration and audit/county board staff regarding fringe benefit expenditure trends.


3. While it was inevitable that the county would seek to use a healthy chunk of the UWM land sale revenue to address its immediate fiscal problems, it still is not optimal fiscal policy to do so. Use of one-time revenue in this fashion does help alleviate the immediate crisis, but policymakers must recognize that it does nothing to address the county's structural deficit and, in fact, masks that deficit's true size.

Sadly, the political fighting between the two branches of county government over this episode likely has only just begun. And, while it is necessary and appropriate for the two sides to responsibly deliberate whether the depth and scope of the projected 2009 deficit justifies the painful short-term responses proposed by the executive branch (e.g. 35-hour work weeks), the worst outcome would be inattention to the long-term structural budget problems facing county government (as we have warned about here and here).

Indeed, what cannot be lost in this conversation is the fact that those problems are every bit as real for 2010 and beyond with a $650,000 projected deficit in 2009 as they were when the problem was deemed to be $14.9 million just a few days ago.