Metro Milwaukee nonprofit organizations rate the region's philanthropic efforts

In each of the past 15 years, the Public Policy Forum has surveyed nonprofit leaders in southeast Wisconsin to gain insight into the financial health of their organizations and their success in generating support from philanthropic and government entities in Greater Milwaukee. This year’s 15th annual Report Card on Charitable Giving is based on the November 2011 survey responses of 95 nonprofit leaders and finds the responding organizations report greater fiscal stability and more optimism about the future than in the previous two years.

In fact, it appears the nonprofit sector may have seen the bottom of the recession’s impacts, with a greater number of nonprofit leaders reporting they are financially healthy – and fewer reporting chronic financial problems – than in 2009 or 2010. It is also clear, however, that nonprofit organizations have yet to bounce back to their pre-recession status, and that most continue to be challenged to meet increasing demands for their services within the context of their budget constraints.

Major Findings
• While about half of respondents feel the state of philanthropy in the metro Milwaukee area in 2011 did not change from the previous year, the percentage of those feeling it is getting worse decreased sharply from two years ago.

• The majority of respondents continue to feel the U.S. economic downturn has caused giving to be less generous than usual, yet the proportion of respondents feeling that way has declined in each of the past two years.

• A majority of respondents say the outlook for the long-term sustainability of their organization is high or very high. Very few have low expectations for long-term sustainability.

• Recession-driven demand for direct services continues to grow, but most respondents this year say they are at least somewhat confident they will be able to meet the demand. More respondents this year say they have been able to increase their staffing levels in response to increased demand and more say they feel donations are increasing relative to the increased demand for services than in the previous two years.

• Budget constraints continue to challenge nonprofit organizations, with many continuing to freeze salaries or take other steps to reduce expenses.

• More respondents in 2011 report overall revenue growth and growth in donations as compared to 2010.

In rating child care provider quality, Wisconsin can learn from other states

In June 2010, Wisconsin’s Joint Committee on Finance approved YoungStar, a new quality rating and improvement system (QRIS) for the state’s nearly 8,500 child care providers. YoungStar supporters believe the new system will improve the overall quality of childcare in Wisconsin by motivating and supporting providers to make quality improvements and by providing parents with the information they need to choose high-quality child care options.

In the Forum's latest Research Brief, we examine several issues and challenges that have arisen in other states or jurisdictions with QRIS policies, how those entities have tackled those challenges, and the lessons their experiences might yield for Wisconsin. We found five common implementation challenges that have confronted other states and that have the potential to occur in Wisconsin, as well.

1. Bridging the disconnect between theory and policy: QRIS policies are partly based on a theory that greater demand for quality child care will cause quality to improve. Yet, the QRIS policy provides incentives to child care suppliers, not those in demand of care. This disconnect can be bridged via extensive outreach to parents to educate them about the rating system and its benefits, or by creating financial incentives for parents to choose higher-quality care. Wisconsin is planning an outreach effort, but may also wish to explore demand-side incentives should it become clear that demand for higher-quality care is lacking even after YoungStar is fully implemented.

2. Establishing meaningful differences in quality across tiers: QRIS policies assume that there are real differences in quality across the ratings tiers—meaning higher-rated providers benefit child outcomes more than lower-rated providers. If tiers are poorly defined, or if the cut-points between tiers are arbitrary, there may not be meaningful difference in quality between providers with different ratings. Wisconsin will not know if this is a problem until all providers have been rated and have had time to make improvements needed to move up along the tiers.

3. Coordinating QRIS policy with existing quality improvement policies: Wisconsin already has several policies and funding streams in place aimed at improving child care quality. Coordinating these efforts with QRIS so as to maximize the positive outcomes of these many investments could potentially be a challenge. Provisions regarding technical assistance and improvement grants appear to be reinforcing QRIS goals; however, professional development scholarship and stipend programs have yet to be tied to YoungStar.

4. Promoting higher quality systemwide without causing higher costs systemwide: Increasing the state reimbursement to child care providers serving low-income families as their quality ratings increase, otherwise known as tiered reimbursement, is a common incentive used in many states. Wisconsin’s tiered reimbursement strategy is unique, however, in that it not only increases reimbursement for highly-rated providers, but also reduces reimbursement for low-quality providers. As no other state has implemented a carrot and stick approach, Wisconsin cannot use other states’ experiences to predict the effect the tiered reimbursement will have on costs to private pay parents.

5. Inadequate financial planning: Improving the quality of the child care market is a costly endeavor. To do so will require adequate and sustainable revenue sources, not only for conducting YoungStar rating and improvement processes, but also for subsidizing the higher program costs that may result from the improvements. Because Wisconsin has a unique tiered reimbursement structure, the financial plans of other states are not useful in helping estimate potential costs here.

Despite the 26 child care quality rating and improvement systems across the country, a robust body of research has yet to develop that can provide insight into the effectiveness of specific state child care regulatory policies. As a result, Wisconsin, like other states, must be prepared to closely monitor the costs and the child outcomes resulting from its QRIS policy, and make policy changes as necessary.

The Forum's top five research findings of 2011

With the end of the year upon us, it’s time once again for the Forum to unveil its top five research findings of 2011. We started this annual tradition last year with a list that included findings on Milwaukee's skilled workforce, Milwaukee Area Technical College spending habits, and the imbalanced state of Milwaukee County's adult mental health system. This year's list is equally diverse and provocative (or so we hope). Without further ado, here they are in chronological order:

1. Greater Milwaukeeans need to be better educated about how their individual actions impact regional water quality. Our January report detailing results of a survey of 400 area residents on water-related issues revealed that nearly 85% feel "the actions of individuals do not have an impact on water quality and quantity problems," while only 4% feel they "have a responsibility to future generations to protect the region’s water resources." Those responses may be linked to the survey's additional finding that respondents place a relatively low value on water quality as a factor in the regional economy, and suggest that stepped up public education efforts are in order, particularly if the region's status as a freshwater innovator is to be promoted.


2. MMSD's capital spending needs are daunting and may conflict with the capital needs of other local governments. Our comprehensive fiscal assessment of the Metropolitan Milwaukee Sewerage District (MMSD) - released in June - found a local governmental body that is in sound fiscal condition. Nevertheless, despite the completion of deep tunnel expenditures and expiration of stipulation agreements with federal and state regulators, "the types of enormous capital investments that distinguish MMSD from other local governments...may need to continue because fundamental water pollution problems remain." We caution that in light of their enormity, MMSD’s capital priorities may need to be debated in the context of the investment needs faced by other local governments for schools, parks, roads, libraries, etc.


3. Milwaukee County was housing or paying for an average of 556 fewer adult and juvenile inmates per day at the end of 2010 than it was at the end of 2008. In a June research brief, we documented the remarkable decline in the county's inmate population and speculated on possible causes. We also calculated related financial savings, estimating the county spent $12 million less on adult and juvenile incarceration in 2010 than it did two years earlier. The brief noted that while some county law enforcement officials disagreed on the public safety impacts of reduced inmate populations, the county's fiscal woes demanded consideration of strategies to sustain the downward trends.


4. Analysis of the budgets of 15 comparable cities shows Milwaukee is the only one funded substantially with intergovernmental revenue. While the Forum has consistently reported on Milwaukee's significant reliance on state government, even we were surprised at the extent of that reliance when compared to other cities. A July report by the Forum's 2010-11 Norman N. Gill fellow found that the 15 comparison cities use intergovernmental revenue to fund about 18% of their budgets, as compared to Milwaukee's 46%. Meanwhile, at least half of every other city’s budget is funded by local tax revenue, with most having access to a local sales or income tax to supplement property tax funding.


5. Strategic economic development planning is a national trend that has not yet taken hold in Milwaukee. "Assembling the Parts," our November report on Milwaukee's economic development landscape, noted that while impressive progress has been made by city and private sector leaders to assemble the right pieces of a comprehensive economic development strategy, the city still could benefit from a strategic vision and plan that ties those pieces together into a "cohesive and strategically organized whole." We cited the existence of such plans in other cities and discussed a new "metropolitan business planning" concept engineered by the Brookings Institute that could provide great value to Milwaukee.

With 20 research reports in 2011, it was not easy for us to narrow down our list of top findings to five. Left off the list this year were important findings related to the readiness of area child care providers for the state's new quality ratings system; the impacts of the state budget repair bill on Milwaukee's city and county budgets; the views of area residents on municipal shared services and consolidation; and the potential for greater collaboration in technology transfer among local universities. Those interested in reviewing those and other findings can check out our full list of research publications here.

People Speak: Citizens concerned about health care costs and reform

The latest edition of the People Speak poll finds Milwaukee area citizens are concerned about health care costs in general, as well as the costs of the new health care reform law.

Of the 436 residents polled in early November, a majority (62%) agree with Wisconsin joining 25 other states in challenging the constitutionality of the federal health care reform law. Residents do not seem to base their support on uneasiness with the mandate that individuals be required to have at least minimum insurance coverage, however. In fact, 64% say they favor a requirement of this type. Support for the individual mandate drops to 42% when the question is rephrased to include a hypothetical tax increase to cover the costs for those who cannot afford insurance on their own, indicating concerns about the cost of the law may factor into support for the legal challenge.

These concerns about the cost of reform may reflect respondents' personal situations. A majority (64%) say they are very or somewhat worried that they will not be able to pay their medical bills in the event of a serious illness in the future, although just 23% say that cost has prevented them from seeing a doctor for a medical problem in the past 12 months. Of these 101 respondents who have skipped a doctor visit in the past year due to cost, almost half (47%) report having employer-provided insurance.

Other findings:

• The 64% of respondents in favor of requiring all Americans to have at least minimum health insurance includes 80% of Democrats and 55% of Republicans.


• While 67% of respondents overall agree that states should be allowed to opt out of the federal health care reform law and devise their own health care coverage systems, 92% of Republicans and 42% of Democrats agree.


• Almost half (48%) of respondents favor guaranteeing health care for every American, even if it doesn't do much to control health care costs.


• On the whole, however, health care is not at the top of people's minds when asked to name the most important issue facing the Milwaukee region. Just 2% said "health" or "health care" is the top issue, while 47% said "jobs" or "unemployment" is most important.

The People Speak poll is a tracking poll conducted three times per year in partnership with the Center for Urban Initiatives and Research at the University of Milwaukee and The Business Journal Serving Greater Milwaukee. Full results of the November 2011 poll and all previous polls can be found at the People Speak website.

Does Milwaukee County have a bigger role to play in economic development?

On its face, the recent announcement that Wauwatosa mayor Jill Didier is leaving office to become Milwaukee County's new Economic Development Coordinator is promising news on the economic development front.

As a former mayor, Didier obviously has strong connections to area business and municipal leaders, which should bolster the county's economic development activities.

In addition, the specific jurisdiction over which she presided is key. Wauwatosa is home to the Milwaukee County Grounds, which houses the county's Parks Department, Behavioral Health Division, and Juvenile Justice Center, as well as the Regional Medical Center. As the Forum has suggested in previous reports, determining the county's appropriate ownership of land and buildings on the County Grounds in light of the land's value, and within the context of its diminished workforce and fiscal challenges, should be a major priority for policymakers. The new Economic Development Coordinator's familiarity with those properties and County Grounds tenants could be quite helpful in that regard.

The Forum also is pleased to see that another research finding recently trumpeted in our Assembling the Parts report - that greater coordination is needed between metro Milwaukee's impressive array of economic development initiatives and players - has been cited in connection with Didier's appointment. As reported in the Business Journal Serving Greater Milwaukee, the county's Economic Development Director cited that finding and said the new coordinator position - as well as Didier's appointment to it - reflect the county's intention of playing an important role in such coordination.

A word of caution may be in order, however, in light of another finding from Assembling the Parts. In examining the role that Milwaukee County traditionally has played in economic development, we note that its tools and resources are rather limited, which explains its limited activities in this area. Unlike other economic development players, for example, the county cannot grant tax incentives or credits to businesses; has little access to real estate or business financing; and can't create tax incremental districts. Consequently, its traditional role has centered primarily on managing and marketing its own real estate.

The coordination and "cheerleading" role envisioned by county leaders takes the county in a new and expanded direction and may prove to be very beneficial, particularly in light of Mayor Didier's background and connections. The only question is whether an entity that lacks economic development tools will command the respect needed to coordinate the region's players, and whether such an entity can truly make a difference in business attraction and retention efforts.

In light of the region's pressing economic development needs, it is difficult to fault county leaders for trying to carve out a larger role for themselves in the region's economic development landscape. As they do so, however, they may wish to keep in mind our Assembling the Parts warning that their efforts "not simply duplicate, but rather strategically complement, those conducted by other players."

Managing local government health care costs: The ambiguous incentives of federal health care reform

Recent local government and school district budget deliberations have honed in on deep and often contentious modifications to health care benefits. Many have asked how far local governments will go in reducing benefits now that they have been given greater flexibility to pare down employee health care costs without having to collectively bargain with most unions. These questions likely will continue and become more dynamic with the phasing in of the federal health care reform law.

In 2014, federal law will require all individuals to have health insurance, with new government-subsidized health care exchanges offering an alternative option for small businesses and individuals who are not eligible for Medicare, Medicaid or affordable employer coverage. States can allow large employers to participate in these exchanges in 2017.

How large employers, both public and private, will react to the federal health care reform law is a big unknown. Besides taking advantage of lower cost plans provided through exchanges, some speculate that employers may also consider dropping coverage altogether.

The wild card is a “play or pay” penalty imposed on large employers for not providing affordable employee health care coverage. Large public and private employers who fail to do so will be subject to a $2,000 annual penalty beginning in 2014 for each of their employees, provided that any of their employees have a household income low enough to qualify for a federal subsidy to help pay for coverage within an exchange. Employers offering coverage that pays less than 60% of expenses would face similar penalties, but only for those employees eligible for the federal subsidy. This applies to even seasonal employees that work full-time hours in any given month, a population that currently does not get health coverage in most local governments.

With many local governments paying annual premiums of $20,000 or more for family plans, and picking up more than 80% of plan costs, a $2,000 penalty would be a bargain. Consequently, some argue that many local governments will drop or significantly reduce employer-based coverage.

A recent Urban Institute report challenges this perspective, arguing that for any large employer such a shift would wrongly ignore market realities and the dynamics of worker preferences. While the Institute's report notes that exchanges could better suit some lower-income individuals because of the subsidies for which they are eligible, employers still need to maintain an edge over competitors to retain and attract highly skilled and higher paid employees. Those individuals would not receive subsidies and their share of the exchange plan costs would be approximately 30%, as compared to the typical 15% in employer-based plans.

The report also argues that market competition will force employers who decide to drop health insurance to fully cover the lost benefit with increased wages. On top of that, the employer would still face the $2,000 penalty for each worker.

Do these considerations hold true for local government employers in particular? One factor that has been downplayed is that local governments and their competitors will likely be pressured to contemplate significant changes to employee compensation. Consequently, the market pressure to maintain health care benefits in order to remain competitive may be diminished as all employers continue to recalibrate compensation. Nevertheless, a key question is how local governments will balance the reality of restricted resources and the need to preserve critical public services with their equally compelling need to attract and retain quality workers.

Assembling the parts

In a 2006 report on the City of Milwaukee’s economic development efforts, the Public Policy Forum concluded that “unlike the vast majority of its peer cities, the City of Milwaukee has neglected to sit down with stakeholders and map out an economic development plan. Absent a plan or guiding vision, one is left to conclude that the City has and will continue to engage in economic investments, no matter how worthy, in an ad-hoc fashion.”

Five years later, the economic development landscape in Milwaukee has changed dramatically. Privately-funded entities such as the Milwaukee 7 and Milwaukee Water Council have become prominent players on the economic development scene, suggesting a level of public-private teamwork that had been found lacking in 2006. Nevertheless, important questions remain regarding the precise roles and responsibilities of the various players in carrying out citywide economic development efforts and in formulating the city’s economic development vision.

In a new report released today - "Assembling the Parts: An examination of Milwaukee's economic development landscape" - the Forum attempts to address those questions.

The report commends City and private sector leaders for adding “strength and focus” to the community’s economic development efforts, citing city government’s successful efforts to spur revival in the Menomonee Valley, the ground-breaking work of business-led groups to build industry clusters and support entrepreneurship, and the bold plans of university leaders to establish world-class research institutions. The report also suggests, however, that while we’re assembling the right parts, we may be missing the blueprint needed to build a well-oiled machine.

Indeed, one of the report's key findings is the continuing lack of a true citywide strategic economic development plan that establishes clear economic development priorities, links those priorities to specific strategic objectives, measures each objective with performance indicators and benchmarks, and names the entities to be held accountable for each objective. It cites examples from other cities in which such planning is being used “to meaningfully enhance collaboration and coordination, create new tools, and foster accountability and innovation.”

The report concludes by stating that Milwaukee’s elected and business leaders “should be proud of their efforts to build an economic development infrastructure that has assembled many of the parts needed for success.” It asks, however, whether they now “have the patience, skill and camaraderie to transform those parts into a cohesive and strategically organized whole.”

The full report can be accessed here, and the media release here.

Income Inequality in Metro Milwaukee

The Occupy Wall Street demonstrations have sparked a public debate over income inequality that has spread across the nation and beyond. In Milwaukee, where the city’s poverty rate has ranked among the nation’s highest for several years, the issue of income inequality is a familiar one. Could it be, however, that the Milwaukee metropolitan area actually has slightly less income inequality than the U.S. as a whole, and if so, what does that mean?

A new report from the U.S. Census Bureau analyzes and ranks states, metro areas, and even neighborhoods in terms of how evenly income is divided among the population. The method used to rank each place, called the Gini measure, is a scale from zero to one in which a measure of zero means incomes are totally equal throughout a population, and a measure of one means 100% of that population’s income is concentrated in one household. Notably, while the Gini measure captures how income is distributed, it does not take into account factors such as the relative wealth of a population or the cost of living of each place.

According to the Census Bureau study, Wisconsin has one of the lowest levels of income inequality among U.S. states. The level of inequality within the Milwaukee metropolitan statistical area (MSA), which includes the counties of Milwaukee, Ozaukee, Washington, and Waukesha, is below that of the nation as a whole and in the middle of the pack when compared with the 50 other metro areas in the U.S. with populations of at least one million. Below is a breakdown of select metro areas on the list, including those at the extremes and Milwaukee’s regional peers. Each metro area’s poverty rate and percentage of households earning at least $200,000 are also included on the chart.

Income inequality in U.S. metro areas with populations over one million, 2005-2009 (51 total)

It’s difficult to determine how to interpret the Gini measures by themselves. Because of the small difference in Gini measures found between metro areas at the extreme ends of the scale, for example, metro Milwaukee does not appear to be much different from the New York or Salt Lake City metro areas. Indeed, all of the metro areas measured fall within what appears to be a relatively narrow range.

One might logically theorize that metro areas with higher Gini measures would have higher percentages of households at the extremes – both very high-income and very low-income. Based on the data on poverty and high-income households in the chart, the Milwaukee MSA has both a lower poverty rate and a lower percentage of high-income households compared with the New York metropolitan area and the U.S. as a whole, while the State of Wisconsin has lower rates than metro Milwaukee for both categories. But perhaps most interestingly, the combined percentages of people at the extremes (poverty rate plus percentage of high-income households) follows the Gini measures almost perfectly, as shown in the chart’s final column.

While these data invoke more questions than answers, several observations can be gleaned with regard to metro Milwaukee. First, while poverty in the city of Milwaukee is unacceptably high, the poverty rate for Milwaukee’s MSA is relatively average compared with other metro areas. Thus, poverty may be less concentrated in the central city of other metro areas compared with metro Milwaukee.

Second, the Milwaukee MSA has a relatively low percentage of high-income households compared with other metro areas and the nation as a whole. In addition to the data on the above chart, a recent study by the Brookings Institution shows that metro Milwaukee is not among the 54 U.S. metro areas whose share of very high-income households (>$200,000/year) exceeds their share of all households. Some might argue that metro Milwaukee’s relatively low level of high-income households puts us at an economic disadvantage because high-income households are those most likely to create desperately-needed jobs.

Third, if income inequality is at undesirable levels in general throughout the U.S., metro Milwaukee is not significantly different. Current research has shown that the richest 20% of Americans own approximately 84% of the nation’s wealth, and that Americans across divisions of race, gender, income, and political affiliation all would prefer less inequality.

Finally, since the data used in the Census Bureau report are from 2005-2009, both pre-recession and peak recession years are included. With the economy continuing to struggle, it will be interesting to see how these numbers change over time.

TIF changes on the horizon in Wisconsin

In a rare showing of bipartisan accord in Madison last week, the Wisconsin Assembly unanimously passed a bill allowing local governments to create new tax incremental financing (TIF) districts jointly between two bordering municipalities. The changes included in the bill raise several questions about how TIF currently is used in metro Milwaukee, and how it could be used most effectively.

TIF is a financing tool that allows municipalities to borrow against future property tax revenue to fund current development projects. Though few people are familiar with TIF, it is the most widely utilized economic development tool in Wisconsin. In fact, a past Forum report, Too Much or Not Enough?, revealed that as of 2008, there were nearly 1,000 active TIF districts in Wisconsin with a total assessed value of over $15 billion.

IF was originally created to facilitate redevelopment efforts in blighted urban areas, but in 2003, state law was broadened to allow TIF to be used for nearly any type of development project deemed impossible to realize without public assistance. The bill approved by the Wisconsin Assembly makes TIF even more flexible. In addition to allowing TIF districts to cross municipal borders, the multi-jurisdictional districts would also be exempt from a state law restricting municipalities from creating new TIF districts if 12% of their total property value already falls within existing TIFs.

Past Forum research has revealed that the City of Milwaukee utilizes TIF at a far lower rate than many smaller cities in the metro area and many large cities in the Midwest. According to the Wisconsin Department of Revenue, the City of Milwaukee’s current TIF utilization rate is 3.9%, which falls below the state average and far below the state’s limit. Allowing the City to team up with its neighbors could help to boost Milwaukee’s TIF utilization rate and property values, provided there are promising and fiscally sound projects at the city’s edges. The same may be true for other large municipalities in the Milwaukee metro area. The Forum’s economic modeling has suggested a 10% increase in TIF utilization by Wisconsin cities with populations over 50,000 could result in a 2% increase in their total property values.

However, Too Much or Not Enough? also suggested TIF utilization rates at the municipal level have regional economic impacts. Exempting shared districts from the 12% state limit could result in over-utilization in suburban and rural communities on the metro edge. Our economic modeling indicated a 10% increase in TIF use by an average Wisconsin suburb could result in a 0.2% decrease in property values for that community and a 1.1% decrease in the property values of the central city. All of the communities in the Milwaukee metro area that currently have TIF utilization rates in excess of the state limit are smaller suburbs, so new shared TIF districts in those places should be analyzed carefully to avoid detrimental regional effects.

There are also several practical hurdles potential cross-municipal TIF districts will have to overcome. First, all of the taxing jurisdictions within which the project is located would need to sign off on the project. For example, a hypothetical new TIF district on the border between West Allis and Brookfield would have to get the approval of two cities, two counties, two school districts, and two technical college districts. In addition, under current Wisconsin law each municipality is allowed to use its own set of criteria to determine whether a project qualifies for TIF, so potential projects would have to meet the standards on both sides of the municipal border.

With TIF districts crossing borders and having regional economic impacts, it may be more useful than ever to develop uniform TIF standards for the metro area that facilitate the development of this new type of district while helping municipalities to choose new TIF districts that are beneficial not only for their own property values, but for the Milwaukee region as a whole.

Racine school district holding itself accountable to goals, but academic achievement still lags peer districts

Racine Unified School District (RUSD) implemented a district-wide vision for improvement in March 2009. Called the North Star vision, it is intended to specify "the path to successful completion of high school for all RUSD students with an ultimate goal of every graduate being ready for a career and/or college.” It includes performance targets at each grade level to be used in creating school improvement plans and in setting school-level learning targets.

The vision is the result of a collaborative effort by the school board, district administrators, the teachers and administrators unions, and the support staff union. A simple graphic illustrating the measures of focus at each grade level has been widely distributed to parents, teachers, and district stakeholders.

 In this year's version of our annual report comparing RUSD and its ten peer districts across the state, we highlight RUSD’s visions and targets for each grade level, starting with the most advanced grades. For each measure, we present several years of trend data, starting with the 2008-09 school year as a baseline in most cases. We note where RUSD met or exceeded its 2010-11 target, as well as where it has fallen short, and we analyze the goals for 2011-12.

 We find:

• Of the North Star goals, only in writing has the district surpassed its target for all students. There has been progress toward some of the other goals for some subgroups of students but, on the whole, large racial and socio-economic gaps in performance persist and entire grade levels are falling short in math and reading.
• The large and persistent achievement gaps are concerning because RUSD serves a lower-income, less-educated population than most of its peers and the state as a whole. RUSD ranks first among peer districts in student poverty, as measured by free or reduced-price lunch eligibility. In addition, 54% of RUSD students belong to minority racial or ethnic groups, ranking RUSD first among the peer districts in terms of minority enrollment.
• Long-term trends in math and reading continue to cause concern, although the 72% of RUSD 4th graders proficient or advanced in reading in 2010-2011 is up slightly from 2009-10, as is the 76% of RUSD 8th graders proficient or advanced in reading. However, the 52% of 10th graders proficient or advanced in reading is a slight decline over the previous year. Improvements in math scores were not seen in 2010-11 in 4th, 8th, or 10th grades.

We applaud RUSD for established the North Star vision and making impressive improvements in writing proficiency. Transparently holding itself accountable to these goals allows all stakeholders to envision the path to higher achievement, and the efforts that will be needed to get there. Click here to download a copy of the 14th Annual Comparative Analysis of Racine School District. The report was sponsored by Education Racine Inc. and the Johnson Foundation.

Maxmizing the local economic benefits of academic research

This afternoon the Public Policy Forum takes up the topic of the economic impact of academic research at our Viewpoint luncheon. One specific way in which research leads to job creation and business development is via technology transfer – the legal process in which new discoveries are patented, marketed, and licensed to commercial manufacturers. Southeast Wisconsin is home to several academic research institutions, each of which goes about technology transfer independently, for the most part. A new Forum report to be presented at the luncheon today examines whether greater collaboration among the region’s research institutions is needed to maximize the local economic impacts of technology transfer.

Our analysis finds that there are three models that might be considered by academic leaders to enhance collaboration in technology transfer and potentially augment the effectiveness of existing efforts:

• Joint Office of Technology Transfer
  A joint office of technology transfer could potentially result in greater expertise in economic development practice for the participating institutions, as well as economies of scale. However, a joint office may stretch the resources of technology transfer officers to the point that some institutions may experience reduced levels of service. Equitably funding a joint office to serve public and private institutions also would be challenging.
• Joint Infrastructure for Informal Technology Transfer Activities
  Currently, much of the technology transfer work performed by academic institutions is of the informal variety - building awareness of academic research projects by industrial researchers and investors through networking and partnering. At the federal level, this work is performed by a permanent consortium of the federal research labs. A similar consortium of local institutions could be created and charged with raising the profile of translational research for local industry. Each participating institution would have to trust, however, that its financial contributions to the consortium would eventually result in benefits for its researchers.
  
• Joint Economic Development Entity
  We found four different types of collaborative economic development agency models aimed at increasing the local economic impact of academic research. All are aimed at encouraging and supporting the transfer of technology to local industry and start-ups, but each does so a little differently. The biggest hurdle for this model is sustainability - a previous, state-funded, southeast Wisconsin economic development effort, TechStar, proved unsustainable.

In addition to considering the creation of a new full-fledged collaborative infrastructure based on one of the three models above, the region's research institutions could consider collaborating on more targeted strategies to ensure that their research positively impacts the local economy:

1. Expand the UWM-MCW First Look Forum to other research institutions—Offer more researchers the opportunity to participate in these events designed to connect academic researchers to investors and industry.
2. Jointly offer start-up support or an entrepreneur-in-residence program—Collaborate to ensure local researchers have the opportunity to be educated about commercializing technology through company formation, mentored through the technology development and venture formation process, and connected with outside resources that can provide services, advice, funding, and management expertise.
3. Jointly raise funds for pre-seed grants—Expand the UWM Catalyst Grant program to other research institutions by working together to raise additional funds from foundations and industry.
4. Utilize a joint tech transfer advisory committee—Maximize local resources by forming a joint advisory committee of investors and industry leaders to advise on patenting decisions, particularly those arising from research projects conducted collaboratively by two or more CTSI institutions.
5. Create a local industry database—Provide researchers at all local institutions with data about industry needs and interests, as well as contacts, by jointly creating and managing a local industry database.
6. Host clinician informant panels—Increase awareness among researchers who are not also clinicians by jointly hosting opportunities for discussion of clinical problems in need of solutions.

It is clear that the region’s academic research institutions have yet to capture the full economic development potential of their research. By collaborating more closely to identify local discoveries that fill gaps in the global market, and by working together to help create or grow local players in that market, academic leaders could take better advantage of their rapidly emerging research prowess.

Priority-setting at the Milwaukee County Courthouse

In the Public Policy Forum's annual review of the Milwaukee County Recommended Budget - released this morning - we commend the administration’s efforts to establish clear priorities and make difficult decisions, but emphasize there is “still much work to be done” to address the county’s structural imbalance.

Clearly, this is a budget that does not shy away from difficult spending cuts, ranging from elimination of support for the Emergency Medical Services (EMS) program and local arts groups, to substantial reductions in the Office of the Sheriff, to another sweeping call for health care savings from county workers. We caution that while the programmatic impacts and consequences of those decisions must be carefully deliberated, the county executive and his budget staff deserve credit for recognizing the need to cut somewhere.

Despite several positive strides in the budget to address the county’s structural problems, the report notes that significant challenges remain. It points out that the use of reprogrammed federal funds to avert substantial bus service reductions is a two-year solution at best, and that the county’s continued reliance on annual wage freezes and health care cuts as primary budget-balancing tools may not be sustainable.

In addition, the report cites the county’s glaring lack of reserves – an issue exacerbated by a recommendation to diminish its contingency fund – as giving pause to any notion that it has fully reconciled its fiscal shortcomings, or that 2012 will be the first year in recent memory devoid of the need to debate mid-year corrective actions to avoid running a deficit.

The report concludes by noting that debate is needed regarding the priorities and strategies selected in the recommended budget, as well as the “appropriate mix of revenue enhancements and spending cuts.” It says it is imperative, however, for the county board to follow the budget’s example of making difficult decisions and avoiding short-term gimmicks.

The full report can be accessed here. The Forum released a similar review of the 2012 City of Milwaukee budget on Friday.

The Calm before the Storm…

This morning, the Public Policy Forum released its annual evaluation of the mayor's proposed City of Milwaukee budget. The 2012 budget is the city's first since passage of the state budget repair bill that ends collective bargaining for most unions, and a new state budget that severely limits property tax increases and significantly reduces aids to local governments.

We find that the proposed budget manages to provide at least one more year of sustained city services, while also replacing certain areas of lost federal and state grants with reallocated property tax levy, and bolstering the city’s pension reserve fund. All this is accomplished with only a small increase in the property tax levy and relatively modest increases in city fees.

The key for 2012 is the state budget repair bill, which allows the city to reap the benefits of much larger employee contributions to the cost of their health care and pensions, and to engage in a substantial redesign of its health care offerings without the need for collective bargaining. A total of $36.8 million in savings results largely from this new flexibility, but also from changes the city would have pursued regardless. Taking into account the state aid reduction of roughly $13.4 million resulting from the recent state budget, the city was able to derive a net total savings of $23.4 million to put toward city services, build reserves and limit property tax levy growth.

In fact, despite the small increase in property taxes and the reduction in state aids, city departments collectively see expenditure growth similar to that seen in better economic times. General operating expenditures, net of fringe benefits, grow by $27.5 million in 2012, or 6.2%. An increase of that magnitude has not been seen since 2007. Such an occurrence would have been unlikely without employee benefit changes.

This good fortune may only be fleeting, however, as the opportunity for this magnitude of savings subsides and several cost spikes come on line. Beginning in 2013, the city expects to face several successive years of unprecedented pension payments ranging from $58 to $80 million annually, as well as an end to federal stimulus funds that now support 50 police officers. Tough decisions will be required, including whether to continue to balance growing fixed costs, stagnant revenues, and gradually declining reserves with additional reductions to employee compensation.

The 2012 City of Milwaukee Budget Brief can be accessed here. A similar report on Milwaukee County's 2012 budget will be released Monday.

Let's not focus on the achievement gap

A thought-provoking essay in the current issue of National Affairs by the prolific and sardonic Rick Hess of the American Enterprise Institute calls for a retreat from education reform's long-held focus on closing the achievement gap. Hess feels the federal No Child Left Behind Act has, ironically, become "education policy that has shortchanged many children." His thesis is that by focusing on improving achievement scores of the lowest performing subgroups of students, opportunities for reform that would also benefit the other students have been passed up. The result is that many parents, educators, principals, and elected officials see school reform as inapplicable to the average- or highly-performing students who make up the majority of children in most classrooms across the country.

Which begs the question--if most children in the country are, in fact, being served pretty well by their public schools (and there can be strong arguments made that children who are white, or female, or upper class, or suburban are served well enough by public schools), then why should the adults who care for and educate them want to reform their schools? Should education reform affect change throughout the system or should it focus more narrowly on those students poorly served by public schooling?

Hess puts himself firmly in the camp of reformers desiring wide-scale change in the nation's public education system. But there are certainly other schools of thought. Until recently, Wisconsin's school reform history exemplified reform targeting the lowest-performing students in the lowest-performing schools by providing options mostly for low-income, urban students. When Governor Walker came into office and expressed a need to reform labor relations laws applicable to all school districts in the state, as opposed to urban districts only, and to support an expansion of the private school choice program beyond Milwaukee, he ushered in a new era of systemic reform.

A new debate is now waging in our state. Do we need to rethink how we're delivering education services to all students, or should we remain focused on the students falling furthest behind? Hess argues that even the best schools are producing graduates suited only to thrive in a 19th century, or perhaps 20th century, world. For him, the need for systemic reform arises from the 21st century reforms the world is experiencing in nearly all other aspects, from technology to the economy to governance. He concludes, "[D]eciding that school is the place where we teach poor children to read and do math — and that everyone else will be left alone to figure out the rest — seems an impoverished and ultimately self-defeating agenda for education reform in the 21st century."


There are still a significant number of education policy thinkers and reformers who are not ready to conclude the entire system needs an overhaul, however. Just this week, the MacArthur Foundation awarded one of its "genius grants" to an economist whose work focuses on the achievement gap, for example.


In places like Milwaukee, where most students are poor, most are minority, and overall achievement scores are low, the debate over targeted versus systemic reform may be beside the point. But as more and more suburban school districts experience growth in their low-income, minority, and/or immigrant student populations, and see test scores drop, the debate is very relevant.

Public sector labor relations in the "new normal"

Given how recent legislative events in Madison have transformed the lives of local government administrators in Wisconsin, it is ironic that hundreds of county and municipal managers from across the country have descended on Milwaukee this week for the annual conference of the International City/County Management Association (ICMA).

The conference, which began Sunday and lasts through today, includes seminars on a variety of public administration topics, such as performance measurement, citizen engagement and priority-based budgeting. Not surprisingly, another seminar topic was "Labor Relations in the Age of the New Normal," which I had the privilege to moderate.

My mission was to launch the discussion by bringing the audience up to speed on what exactly occurred here in Wisconsin, which I did by laying out the core components of the state budget repair bill and 2011-13 state budget (my PowerPoint can be accessed here). Then, I turned the stage over to two municipal managers from Wisconsin and one from Michigan (where legislative initiatives are similarly transforming public sector labor relations) to discuss how they were managing their labor challenges in this "new normal."

Those leaders expressed several interesting insights, including the following:

• One of the participants argued that whether or not the demands for changes in public sector collective bargaining and employee cost-sharing are politically motivated, the "evidence supported the premise." In other words, the failure of many local governments to respond to changing economic conditions and the changed political environment, and their reliance instead on continuing to negotiate labor contracts on a "business as usual" basis, had forced state elected leaders to take labor negotiations "out of their hands."


• Another panelist was more critical of the tactics adopted by many legislatures and governors, calling those tactics a "Neanderthal" approach to managing employee relations that "presumes that employee morale doesn't matter and that we can incent superior performance even when putting the squeeze on public servants."


• Several panelists noted that the decision by elected officials to exempt public safety employees from collective bargaining changes had made their jobs as managers even more difficult, as the existence of two distinct classes of employees (public safety and non-public safety) had generated both morale and logistical concerns.


• Each of the participants agreed that direct employee engagement about the political and fiscal issues facing their governments was more important than ever. In addition, all agreed that communication with employees should continue "as if the balance of power in labor relations hasn't shifted" and that opportunities for labor-management collaboration on ideas for improving efficiency and cutting costs should be pursued aggressively.


• One panelist suggested that the new normal will cause "managers to manage more" and "leaders to lead more." By that he meant that the existence of labor contracts and strong unions often was used as a crutch by municipal managers to avoid making difficult decisions or seeking efficiencies that would negatively impact their employees.

The discussion by the three panelists - as well as 45 minutes of questions and comments from colleagues - revealed the difficult position in which many local government administrators find themselves. Fully cognizant of their fiscal challenges and public demands to "do more with less," yet sympathetic to the livelihoods and morale of their often under-appreciated employees, they are torn between optimizing both their new tools and the performance of their workforce.

How appropriate that these lofty issues would surface here in Wisconsin, the ground zero for a new approach to public sector labor-management relations.

Networked schools outperform independent schools in world's largest school choice market

Milwaukee's private school voucher program, now in its twelfth year, is dwarfed by the 30-year-old voucher program in Chile, where almost half of all students attend private voucher schools. The Chilean program is therefore of significant interest to school reformers and researchers looking to make voucher and charter schools a success in the US.

The most recent research, published by the Cato Institute, finds that when the Chilean public school test scores are compared with those of independent private schools and with those of private schools that are part of multi-school networks or franchises, the students in the franchised private schools perform best. (The independent, mom-and-pop private schools do about the same as the public schools.) In addition, the Chilean research indicates the more schools there are in the franchised networks, the better they outperform the others.

The researchers note that in Chile, "The private voucher school sector is essentially a cottage industry. More than 70 percent of private voucher schools are independent schools that do not belong to a franchise." The franchised schools are either owned by for-profit school management companies; affiliated with non-profit, secular organizations; or part of the Catholic or Protestant school systems.

Do these findings reflect what we know about Milwaukee's program? Its hard to say, since only one year of comparative data on student performance in voucher schools is available and it does not differentiate between the various types of private schools. However, those data do indicate considerable variability in performance across Milwaukee's voucher schools--some are producing high scoring students and some are no better than the worst public schools. It would be nice to know if all the high performing private schools had something in common besides the fact they participate in the voucher program.

We do know that Milwaukee is in two major ways very dissimilar to Chile, where most private voucher schools are of the independent, mom-and-pop variety. Here, most voucher schools would be considered franchises under Chilean standards, as they are affiliated with a religious organization such as the Catholic Archdiocese or a Lutheran Synod. In addition, for-profit school management networks do not have a significant presence in Milwaukee, although that sector appears likely to grow, particularly in the charter school market.

What might explain the Chilean experience? The researchers posit that the franchised schools may benefit from economies of scale in purchasing, fundraising, and administrative expenses, allowing their leadership to spend less time worrying about budgets and more time focused on instruction. In addition, they suggest that larger networks are better able to spread the costs of implementing new curricula or other reforms. However, the researchers caution there may be another explanation; perhaps the larger franchises are simply better at recruiting good schools to join their networks.

As for-profit school management companies look to expand into the Milwaukee education market, these findings and possibilities are worth bearing in mind. However, at least one education policy wonk cautions not to read too much into any research on the Chilean program, since their system arose not from "a richly democratic public debate, but emerged instead from the policies imposed by the military dictatorship that ... controlled the country ... under the rule of strongman Augusto Pinochet."

UPDATE: School Choice Wisconsin reported on private school networks in December 2010, noting that despite the lack of national charter school networks in the city, the school choice program had resulted in growing local networks.

The Heisenberg Uncertainty Principle applied to schools

Werner Heisenberg's Uncertainty Principle states that one cannot simultaneously measure the location of a particle while also measuring the momentum of that particle. When you apply this principle to schools, it's a little disheartening--if we attempt to measure where we are now, we are no longer certain how fast we're improving. If the environment in which the measurement is taking place is also moving (think of the vast legal and budgetary changes at the state level), the uncertainty is all but overwhelming.

Thus, this year's analysis of public school data in southeast Wisconsin heeds Heisenberg and emphasizes the use of the 2010-11 data as a baseline. Knowing that all Wisconsin school districts will be in a state of flux over the next few years due to changes in contractual bargaining legislation, the state budget, a slow economic recovery, a new standardized testing system, and new standards for curriculum, in the future we hope to measure their improvements over time as these various "new normals" kick in. For now, we emphasize where they've been and where they are currently.

By analyzing trends in performance indicators such as WKCE reading and math scores, ACT scores, and graduation rates – and breaking down the numbers by minority group and gender – this year’s report provides a basic understanding of the strengths, weaknesses, and challenges of individual districts. Comparing these data with those from future years will provide insight into the impacts of the historic changes recently adopted at the state level.

This year's major findings include:
• The region trails the rest of the state in several grade levels and subjects when it comes to proficiency on state standardized tests. In addition, the data show a progressively wider disparity between the region and the state in all subjects at the higher grades, raising a red flag in the context of current efforts to drive educational reform toward college and career readiness.

• Measures of college preparation show mostly good news. For the third straight year, the most recent data show the average ACT score in the region held steady at 22.8 (even as the number of students tested rose by 6.3%), while the statewide average score dropped slightly. The region’s percentage of students passing Advanced Placement exams (13.6%) also is well above that of the rest of the state (10.7%). The region’s high school completion rate of 86.1% is below that of the state (89.9%), but increased more over the previous year than the statewide rate.

• Individual districts in southeast Wisconsin continue to compare favorably with state averages for attendance, truancy, and dropout rates, with 41 of the 50 districts achieving an attendance rate of 95% or better, and 36 posting truancy rates below 3% and high school dropout rates at 1% or lower. The region’s three largest districts – MPS, Kenosha and Racine Unified – lag well behind the rest of the region in all three indicators, however.

• Southeast Wisconsin school districts continue to rely more on property taxes and federal aid than those in the rest of the state. Meanwhile, regional spending allocations among categories such as instruction and administration mirror the rest of the state, but the region’s per-pupil spending of $12,422 exceeds the statewide average by nearly $1,000. Overall, per-pupil spending in the region rose slightly compared to the 2009-10 academic year.

• Enrollment in the region’s public schools tilted slightly upward for the first time in more than five years, which is primarily attributable to growth in 10 moderately-sized districts of between 2% and 7%. Amid this relatively steady overall enrollment, minority enrollment is accelerating. Minority enrollment in the region exceeded 40% in 2010-11 and grew 1.3%, whereas the last several years saw growth levels of below 1%.

In total, the data from 2010-11 continue to show a region whose largest and poorest school districts continue to struggle, and one in which the racial achievement gap remains large and static. While there is plenty of uncertainty about the direction and speed in which the schools will change over the next several years, it is certain that staying put is not an option for many districts.

The full report, as well as a poster-sized summary detailing data from individual districts, can be found here.

Underwriters of this year's edition include: Alverno College, Multiple Listing Service, Northwestern Mutual Foundation, Southeastern Wisconsin Schools Alliance, Stifel Nicolaus, and Waukesha County Technical College.

Escalating health challenges for inner city Milwaukee

Two recent reports have raised concerns about healthcare access for low-income Milwaukeeans. First, The Business Journal Serving Greater Milwaukee reported on Aurora Health Care’s relocation of orthopedic and heart surgeons from its Sinai Medical Center, located just west of downtown, to a new hospital in Grafton. The transfers have caused some to fear further service reductions at Sinai, particularly in light of the decades-long trend of hospital closures in the City of Milwaukee. Days after the Business Journal article, the Center for Urban Population Health (CUPH) released a report revealing entrenched health disparities among Milwaukee residents based on socioeconomic status. With state budget cuts to Medicaid as an additional hurdle on the horizon, are the healthcare challenges facing low-income Milwaukeean’s about to get even worse?

Since 1977, nine hospitals have closed in Milwaukee, including the 1995 closing of the county-owned John Doyne Hospital, which had long served as a safety net for the uninsured. Initially, these losses were tied to the city’s population decline, but the most recent closings – Northwest General in 2000 and St. Michael’s in 2006 – occurred despite a stabilization of the city’s population during the past decade. Another major factor that has been linked to hospital closings in the city is a dramatic increase in poverty, which has resulted in higher rates of publicly insured and uninsured residents.

Despite the fact that Sinai has operated at a loss nearly every year over the past decade, Aurora Health Care maintains it is committed to downtown Milwaukee. But with the state’s proposed $500 million in Medicaid cuts over the next two years, private hospitals may be faced with further cuts in Medicaid reimbursement and/or an increase of uninsured patients. The details of the state’s Medicaid budget have not been announced yet, but the BadgerCare Plus Core plan for childless adults had already instituted a waiting list long before budget debates began.

Milwaukee’s healthcare safety net for the uninsured has gone through several changes over the past 20 years. The county’s John Doyne Hospital served the uninsured free of charge until it was closed by county officials in 1995. To partially replace Doyne Hospital, Milwaukee County created the General Assistance Medical Program (GAMP), which provided health coverage for low-income, childless adults – the portion of Milwaukee County’s low-income population that didn’t qualify for Medicaid at the time. When the State of Wisconsin expanded BadgerCare in 2009 to cover childless adults, the GAMP program was eliminated. Consequently, if BadgerCare eligibility is now restricted in response to the state’s Medicaid funding gap, there will be no public safety net program to provide backup.

Milwaukee’s four federally qualified health centers (FQHCs), which provide primary care services to patients regardless of their ability to pay, fill an important role in serving the city’s uninsured. All four centers are expanding their operations and together may be positioned to take on additional patients in the near future. In addition, the downtown AIDS Resource Center of Wisconsin (ARCW) clinic is working to become a fifth primary care FQHC, which would allow it to serve many more patients. These are encouraging signs, but capacity constraints remain a concern at the FQHCs and continue to be a focus of the health system leaders who comprise the Milwaukee Health Care Partnership.

As the local impacts of the state’s Medicaid budget are revealed, there may be even greater strains on the regional healthcare system. A key question is whether Milwaukee policymakers and healthcare leaders will be able to respond as quickly and effectively as the demand for services may warrant.

Region's property taxes kept under control in 2011

The Public Policy Forum's annual analysis of property values and property taxes in the seven-county southeast Wisconsin region - released this morning - finds that the amount of gross property taxes levied by local governments, school districts, technical colleges, special districts and other entities across the region increased by just 1.5% in 2011. That's the lowest year-to-year increase since at least 2000, and well below the 10-year average of 4.3%.

The relatively small increase in total levies, however, was accompanied by a 6% increase in the aggregated gross tax rate for municipalities and school districts in the region, from $20.36 per $1,000 of property value in 2010 to $21.58 in 2011.

For those who might be confused about how levies could increase only slightly when rates increased substantially, the key is property values. A municipality’s tax levy is determined by both the total property value in the municipality and the tax rate that is applied to that value.

Because property values decreased 4.2% between 2009 and 2010, local taxing entities needed to collectively increase the tax rate by $1.22 to realize the 1.5% increase in the amount of property tax levied. Conversely, five years ago, when property values in southeast Wisconsin increased nearly 11%, the region’s local governments and school districts were able to collectively increase tax levies by 5%, while at the same time decreasing the aggregate tax rate by $1.10 per $1,000 of assessed value.

The relatively small property tax increase is good news for taxpayers, but the report points out that it also may raise questions regarding the capacity of the property tax to support desired levels of local government services. Indeed, such annual increases are likely to become the norm – even after the economy rebounds – in light of strict new property tax limits adopted by state government.

Whether the breadth and quality of local government services will suffer with lower property tax capacity remains to be seen. This is an issue that bears watching, however, and one that may produce a need for renewed debate and discussion of revenue diversification for local governments and school districts in Wisconsin, strategies to share or consolidate local government and school district services, or acceptance of lower service levels.

The full report can be accessed here, and our media release here.

Apps for Milwaukee

The open government data movement is a global effort to increase government transparency, civic participation and innovation through public access to municipal data. In the age of the ubiquitous software application (app) for use via personal computer or mobile device, governments around the world are profiting from the creativity of tech-savvy citizens by making data available for the development of useful apps. Since 2008, several U.S. cities, including Washington D.C., San Francisco, and, most notably, Chicago, have started to share government data and even sponsor competitions to encourage the creation of innovative local apps.

Could open government data improve quality of life in Milwaukee? Perhaps Chicago’s experience will help answer that question. Apps for Metro Chicago, which launched on June 24th, is currently accepting submissions for the first of three rounds of competition. The first round seeks apps aimed at improving transportation in the Chicago metro area, with subsequent rounds focusing more broadly on solving community problems and improving services. With $50,000 in prizes, the public will help to choose the winners by voting for the apps they believe are most useful.

Apps for Metro Chicago is the first competition of its kind to involve four levels of government: the City of Chicago, Cook County, the Chicago Metropolitan Agency for Planning, and the State of Illinois. Together, these governments have made more than 175 data sets available to the public in an open format. These data sets range from municipal service requests to hospital information to neighborhood demographics.

Chicago’s competition is also unique in its emphasis on rewarding civic value. The judges will grant bonuses for participants who partner with a business or nonprofit to solve a real, local problem. As the competition’s website states, “the key to winning this contest is to demonstrate that you have created something useful for our community.”

In addition to rewarding community partnerships in the judging phase of the competition, Apps for Metro Chicago is actively helping to connect community organizations looking to solve specific problems with citizens with the skills to create apps. Metro Chicago Information Center (MCIC), the research and consulting group coordinating the competition, is working to make these kinds of connections. One interesting partnership is a collaboration between a local industrial retention initiative and an app developer to write a truck routing app that takes into account weight limits, clearances, road blockages, and other factors to improve the efficiency of distribution.

The accessibility of government data in Milwaukee certainly would impact the replication of a similar competition here. The City of Milwaukee has COMPASS and Map Milwaukee, useful web-based tools that provide municipal data on local demographics, property, crime, traffic accidents and more. These applications allow Milwaukeeans to query information and create maps, but the data is not in an open format and thus cannot be easily reused and shared. The Nonprofit Center of Milwaukee also makes a limited number of data sets available for public use, including information on neighborhood demographics, crime, and geography. Their Data Center also provides technical assistance to the public to help make the data easier to understand and utilize.

One Milwaukee-specific app that has already been developed is the Milwaukee County Transit System (MCTS) bus tracker, which estimates bus arrival times. It can be downloaded for iPhone or Android mobile phones. While certainly a useful tool, the bus tracker tool bases its estimates on set route schedules and could be improved by utilizing the GPS technology already used by MCTS buses to report arrival estimates in real time. Similar real time apps have been created in many U.S. cities, including Chicago.

If the city, county, and other government bodies opened their data sets to public use, the possibilities could be endless. Judging by developments in other cities, it is possible to imagine apps that allow us to find out what’s happening in Milwaukee neighborhoods on a given day along with information on where we can park our bicycle or car nearby, report potholes on our streets and receive notification of repairs, or keep us updated on how our representatives at all levels of government vote on important issues.

With resources like COMPASS, Map Milwaukee, and the Nonprofit Center of Milwaukee’s Data Center, Milwaukee is in a good position to take the next step by making more municipal data available in an open format. Creatively using such data could be a simple and cost effective way to make government more useful to today’s tech-savvy citizenry.

Milwaukee County's alarming budget prognosis

For those who hoped the changes to collective bargaining or the arrival of a new county executive might finally solve Milwaukee County's longstanding fiscal problems, we are sorry to disappoint. The Public Policy Forum's 2012 Milwaukee County Budget Preview report - released this morning - shows the county's budget prognosis actually has worsened since last year, leaving it with "few remaining strategies outside of deep service cuts and/or sharp revenue increases."

This is our first report analyzing Milwaukee County's finances since the adoption of the state budget repair bill and 2011-13 state budget. Our analysis confirms that the county realizes substantial savings from the budget repair bill's labor provisions, likely exceeding $24 million in 2012. Unfortunately, about $17 million of those savings already were built into the county’s base budget in 2010 and 2011. Thus, while the net savings of $7 million for 2012 are significant, they do not come close to offsetting the nearly $29 million in state aid reductions contained in the latest state budget.

Additional key findings and observations from the report:

• Our modeling of several approaches for bridging an estimated $38 million 2012 gap shows potentially stark impacts for county employees, services, programs, and/or taxpayers. Those include deep cuts in mass transit and community-based mental health and disabilities services; severe reductions in parks and cultural amenities and exhibits; and additional reductions in health care benefits that could greatly exceed those imposed on other public sector workers in Wisconsin.


• Because the county may have a one-time opportunity to boost its property tax levy by nearly $10 million in 2012, there is a limited timeframe to include significantly enhanced local revenues as part of the county's deficit-reduction strategy. The only other local broad-based tax or fee available to the county is the vehicle registration fee, which could be used to generate additional revenue for transit or other transportation needs, but which has generated considerable political opposition.


• A five-year fiscal outlook prepared by the county before adoption of the 2011-13 state budget showed a noticeable improvement over the five-year forecast from a year ago. Once the impacts of state aid reductions from the state budget were plugged into the model, however, the county’s five-year outlook became even worse than that forecasted in 2010, despite the budget repair bill’s provisions giving the county unilateral control over many labor and benefit costs.

The report concludes by noting that because the county now has greater certainty and flexibility with regard to its employee compensation framework, its ability to engage in strategic planning has been greatly enhanced. While that won't make the tough decisions any easier, it does allow county officials to reliably size up their fiscal situation and, ideally, finally reach consensus on a realistic scope of county services going forward.

The full report can be accessed here, and our media release here.

People Speak poll: High rates of satisfaction with municipal services

The latest edition of the People Speak poll, released today, finds that residents of southeast Wisconsin are mostly satisfied with the services they receieve from their city, town, or village government. The poll, conducted in late June and early July, surveys 391 adult residents of Milwaukee, Ozaukee, Washington, and Waukesha Counties.

The majority of survey respondents also report feeling their municipal government is a good value. The overall perception of local government's value is mostly unchanged from 2001, the last time we polled on this issue.

Other highlights:

• High rates of satisfaction with municipal service quality (89% are satisfied), types of municipal services (85%), and access to municipal services (87%). Lower rates of satisfaction with the cost of municipal services (67%).


• When asked to name the most important municipal service, 34% of respondents named a public safety service such as police or fire. About half (51%) of these respondents feel public safety services are best provided by individual municipalities, 17% feel they are best provided collaboratively by two or more municipalities, and 23% feel they are best provided by county government.


• The sharing of municipal services across municipal boundaries is seen by a majority respondents as a likely way to cut costs. The percent of respondents saying service sharing is likely to save taxpayers money varies by the type of service.


• When asked whether they would support state policy to require or provide incentives for greater collaboration or consolidation among municipalities or school districts, a majority of respondents indicate they would oppose such legislation. Fifty-four percent would oppose state fiscal incentives to encourage municipal service sharing and 55% would oppose requiring consolidation of small school districts.

The People Speak is conducted by the Forum in partnership with the Center for Urban Initiatives and Research at UWM and The Business Journal Serving Greater Milwaukee. The latest poll was funded by UWM.

For complete poll results, see the People Speak website.

The tools in Milwaukee's revenue toolbox

As the Public Policy Forum’s 2010-2011 Norman N. Gill Civic Engagement Fellow, I have completed my year-long project that analyzed how local governments raise revenue. The report, The tools in Milwaukee's revenue toolbox, stems from a 2009 Forum report that assessed the fiscal health of the City of Milwaukee. That report found that the city is over-reliant on state shared revenue as its main revenue source, and handcuffed by rising fringe benefit costs for city employees and growing expenditure pressures associated with police and fire services (which account for more than one half of all city operating expenditures).

Under the recently adopted state budget repair bill, the city has been granted cost-saving “tools” that will allow it to impose greater fringe benefit cost-sharing for non-public safety city employees. Yet, some city officials and policymakers are unsure if these tools, because they exempt public safety employees and are coupled with a cut in state shared revenue, will be enough to alter the city’s fiscal predicament. Consequently, my project explores the other side of the debate – the revenue toolbox. It asks what alternative revenue structures exist in other cities, and whether they are suitable for Milwaukee.

To answer these questions, we researched 15 cities that are comparable to Milwaukee, analyzed each city’s budget, and compared how each city generates revenue. Our key finding was that Milwaukee relies heavily on intergovernmental revenue (i.e. state shared revenue) to fund its budget (46% of general budget revenue), while the comparison cities raise the bulk of their revenues via the use of broad-based sales, property, and/or income taxes. In fact, no other city relies on intergovernmental revenue for even a third of its budget, and the vast majority has a dependence of less than 10%. Meanwhile, Milwaukee’s use of broad-based taxation for only 20% of its general budget pales in comparison to the other cities, the vast majority of whom use broad-based taxes for more than half of their general budgets.

Given these findings, we next examined the sales, income and property tax and their potential application in Milwaukee if city leaders were authorized to use them to reduce reliance on state shared revenue. Some of the insights we gleaned are as follows:

• Because Wisconsin has a relatively low sales tax compared to other states, implementing a city sales tax of .01% to 1% would not put Milwaukee out of line with comparable cities nationally, and could benefit the city by requiring non-residents to contribute toward the cost of city services. Milwaukee does not have the ideal sales tax base, however, because of the comparably low amount of retail sales that take place in the city, and because of Milwaukee’s high poverty rate.


• A city tax on individual income would allow for the possibility of shielding the poor from tax liability through specific tax rates for different income groups, or the ability to utilize deductions and credits. Also, such a tax potentially could be applied to non-residents who work in the city as well as residents, thus providing a mechanism to collect revenue from non-residents who use city services. On the other hand, even without a local income tax, residents in Milwaukee already have a relatively high state income tax burden, and adding an additional layer of income taxation could be harmful to the attraction of residents and businesses.


• Using a property tax to fund a greater proportion of the city budget could allow for a more predictable revenue stream because local governments would have some ability to change the tax rate to meet expenditure needs or to accommodate a decline in property values. Yet, because Milwaukee has comparably low assessed property values, funding a larger portion of the general budget with property taxes would require Milwaukee to add substantially to its already high property tax rates.


• An option in which city leaders were allowed to pursue a better balance of revenue sources by implementing a 1.0% city sales tax would allow for a sizeable decrease in property tax rates and reduced reliance on state shared revenue.

In the end, the report demonstrates that there are no easy answers to the City of Milwaukee’s revenue dilemma. In the event that the cost-saving tools contained in the budget repair bill are not enough to address Milwaukee’s longstanding fiscal problems, however, it also shows that it may be helpful to consider a balanced revenue structure that is more comparable to the other cities we studied.

Special thanks to the Gill family for their generous support of this project through the Norman N. Gill Fellowship, and the Public Policy Forum for their assistance and guidance throughout the year.

A misplaced trust in leadership

There is a common presumption that when it comes to improving public school performance, constructive changes, whether originating at the top or the bottom, cannot take hold unless they are championed by the superintendent. The superintendent of the Atlanta Public School District is often cited as an example of the type of leadership that brings about dramatic improvement. Dr. Beverly Hall had one of the longest tenures of any large urban district superintendent, having led APS over 12 years. She won many national awards and accolades over those years and the Atlanta schools were on a steep trajectory of improvement.

Now, the Atlanta Journal-Constitution reports that trajectory was launched not by the vision of a strong leader, but was systematically manufactured by a superintendent who tolerated, and possibly encouraged, outright cheating by school staff on state standardized tests. The evidence, gathered by a governor's task force, is overwhelming, alarming, and shocking. The task force report names 178 educators, including 38 principals, as participants in cheating. More than 80 educators confessed to actions such as erasing students' wrong answers and changing them to correct answers. Cheating was confirmed in 44 of the 56 schools examined.

The consequences are yet unknown—Will Dr. Hall have to pay back performance bonuses earned by improved test scores? Will colleges stand behind acceptance decisions for which good test scores were a factor? Will the federal government hold the district accountable under the No Child Left Behind Act? Will criminal charges be brought? One clear result: Students who never learned their real scores lost opportunities to improve their weaknesses and build on their strengths.

Like the recently-exposed problems with the New York state exams, this cheating scandal raises questions about the wisdom of building education reforms around standardized tests. Some will use these developments as a reason to oppose merit pay for teachers, strengthening No Child Left Behind, or requiring private schools accepting voucher students to participate in the tests. Others will argue that a few bad actors cannot be allowed to spoil the best, albeit imperfect, method of monitoring school performance.

These opposing views each have a foothold in Wisconsin, which is currently in the process of developing a new standardized testing scheme. The public debate over the ways in which the new test is to be used for policymaking and accountability purposes is sure to be long and hard. But this debate gives rise to an opportunity to make Badgerland lemonade from other states’ lemons. Wisconsin could anticipate the potential for organized cheating on standardized tests and explicitly spell out the ways in which the Department of Public Instruction will monitor test security and integrity, and the penalties for cheating. For example, DPI might rule that any school turning in score sheets with wrong-to-right answer erasures numbering more than three standard deviations above the norm (statistically unlikely to have happened coincidentally) would trigger an automatic investigation.

Currently, according to DPI's policy and procedure manual, penalties for school staff found to be complicit in cheating are not regulated by the state; it is left to a district to administer any penalties according to local policy. The New York Times reports that in Atlanta, the school board was loath to criticize Dr. Hall, whom the directors felt had done much to improve the perception of their schools and city. Perhaps the lesson of Atlanta is that districts cannot be allowed to self-police as long as their test results are used to determine more than just student performance.

Time to consider a countywide comptroller in Milwaukee?

The announcement earlier this week by longtime City of Milwaukee Comptroller Wally Morics that he will not run for re-election in 2012 creates a vacancy in one of our region's most important, but least understood, elected public offices.

The comptroller essentially functions as the chief financial officer for city government, exercising fiscal control, per the city Web site, "over the activities of approximately 40 city departments and agencies." Perhaps most important, the comptroller's office sets the tone for fiscal responsibility and accountability in city government. It does so by establishing accounting policies and procedures for all city departments; overseeing the city's debt portfolio (which exceeds $750 million); administering all federal and state grants; reviewing all proposed development projects involving city economic development tools; conducting audits of internal city functions; and certifying all revenue figures used in the annual city budget.

In an August 2009 report, the Public Policy Forum found that despite serious fiscal challenges, the city "by most any standard...is financially well run." In many respects, that is attributable to a chief financial officer position that not only is specifically charged with ensuring that the city's finances are responsibly, accurately, and transparently managed, but also one that, because of its independently elected status, can do so without fear of recrimination from other city leaders.

The Forum also has opined, in several of its recent reports on the finances of Milwaukee County government, that the absence of a similarly charged independent controller's office in that government has contributed to its financial difficulties. Consequently, in light of Mr. Morics' impending retirement, is it worth considering whether the elected city comptroller should be transformed into an elected countywide position that would fulfill the same fiscal oversight functions for both city and county government?

Admittedly, questions of home rule, statutory and logistical issues, and turf concerns would make such a proposition difficult to implement, particularly in time for the April 2012 election cycle. But among the potential benefits of such a move - in addition to giving the county the type of independent fiscal oversight it has long needed - would be the following:

• Combining certain city and county accounting and internal audit functions within one office could promote greater quality and efficiency, and perhaps save money by allowing for staff reductions and/or merged financial management and payroll systems.


• An independent office overseeing the financial affairs of both governments would be able to provide greater perspective on regional infrastructure needs and priorities, and how they should be funded. This is counter to the existing state of affairs, in which each government issues long-term debt for capital projects without knowledge or concern about the other's borrowing decisions.


• This could be a significant initial step toward far greater city-county cooperation, as having common fiscal policies and procedures and a unified set of accountants could make it much easier to consolidate other services down the road. The professionals working in a consolidated comptroller's office also could be a source for new ideas on how to consolidate other "back office" functions, such as information technology, human resources, health care administration, procurement, etc.


• A joint city-county comptroller's office might even be able to provide accounting, audit, payroll or financial management services to other Milwaukee County municipalities at a price that would save money for the municipalities.

Again, while this idea would require substantial additional research and deliberation, doing so would be consistent with the shared services and consolidation discussions that are occurring with increasing frequency among the new county executive and local municipal leaders. If ever there were a time when such an idea should be considered, it would appear to be now.