Public Policy Forum's top five research findings of 2012

If it’s December, then it must be time for the Forum’s annual list of its top five research findings of the year.  Last year’s list included findings on MMSD’s daunting capital needs, the dramatic decline in Milwaukee County’s corrections population, the City of Milwaukee's reliance on state shared revenue, and our region’s tardiness in embracing strategic economic development planning.  The 2012 list is summarized below in chronological order:

1. More than four-fifths of Milwaukee County’s rated child care providers stand to lose funding under YoungStar, the state’s new child care quality rating system.  Our January report analyzing the first year of Youngstar implementation examined the ratings earned by 534 child care providers in Milwaukee County as of December 2011.  We found that 428 (80.1%) received 2-star ratings and 33 (6.2%) received 1-star ratings.  In light of the state’s plan to reduce Wisconsin Shares subsidy payments for 2-star providers and disqualify 1-star providers from Wisconsin Share payments entirely, that meant more than 80% of the rated providers would lose funding under YoungStar, a consequence that could impact the availability of child care options.

2. Much of the growth in the Milwaukee Parental Choice Program in the past year appeared to come from existing private school students.  The 2011-12 school year was the first to reflect the impact of major changes to school choice program eligibility adopted in the 2011-13 state budget, including an increase in the enrollment cap, broader eligibility limits, and expansion to schools outside the City of Milwaukee.  Our annual survey of voucher school participants released in February revealed not only that much of the growth in voucher use from the previous year was in schools that already participated in the program, but also that it appeared to have come from students already enrolled in those schools.  

3. Fire department consolidation that preserves existing capacity can still save millions.  In May, we released a comprehensive report on options for sharing or consolidating fire services in the southern Milwaukee County communities of Franklin, Greendale, Greenfield, Hales Corners and Oak Creek.  Our finding that a full consolidation option could save nearly $2 million annually may not have been surprising to those who have examined fire service consolidation proposals in other states, or to those familiar with Milwaukee County’s consolidated North Shore Fire Department.  It was illuminating to find, however, that such substantial savings were achievable without eliminating any fire stations or reducing direct firefighting staff.

4. MATC’s technical diploma offerings are generally attuned with the region’s projected job openings.  Our December report on the activities and resources of Milwaukee’s key workforce development players examined MATC’s role in providing non-degree occupational training to job seekers.  We found that despite longstanding criticism of the college for failing to appropriately align itself with the needs of area employers, MATC’s technical diploma offerings match up well with Department of Workforce Development projections regarding future job openings.  Nursing, Barber/Cosmetologist and Emergency Medical Technician were the most heavily enrolled technical diploma programs in the 2010-11 academic year. 

5. MPS’ five-year fiscal forecast is more optimistic than those of Milwaukee County or the City of Milwaukee.  Our December fiscal assessment of the Milwaukee Public Schools examined the district’s most recent five-year fiscal forecast and found that its projection of a $41 million deficit in 2017 is plausible and perhaps even a bit on the conservative side.  While a projected deficit of that magnitude certainly is not ideal, it is more optimistic than the five-year deficits projected by the City of Milwaukee and Milwaukee County earlier this year.  It is important to note that each government’s five-year forecast is based on financial modeling that is somewhat speculative in nature, and that a complete understanding of the fiscal condition of each must go far beyond their five-year forecasts.  Nevertheless, given the substantial position cuts and general gloom surrounding MPS’ budget in recent years, to find that MPS’ five-year challenges may not be deeper than those of the city and county was somewhat surprising. 

With 18 research reports in 2012, it was not easy to reduce our list of top findings to five. Left off the list this year were important findings related to the application of the state’s new child care ratings system to afterschool care providers; the out-of-classroom spending habits of Milwaukee County suburban school districts; the range of case management services available to persons with mental illness in Milwaukee County; opinions on mental health redesign by nurses and their employers; and the continued impacts of pension and health care benefits on Milwaukee's city and county budgets. Those interested in reviewing those and other findings can access the Forum’s full list of research publications here.

Passing the test, but making the grade?

When the Public Policy Forum decided to dive deeply into the finances of the Milwaukee Public Schools (MPS) six months ago, we did so with considerable trepidation. Having tracked MPS' finances on a general level for the past several years, we were well aware of the district's huge retiree health care liability, the fiscal threat posed by declining enrollment, and the impacts of the latest state budget. Despite the good news we were hearing from MPS officials about the impacts of soon-to-be-implemented fringe benefit changes, we were concerned about precisely what we would find when we lifted the hood and dug into the mechanics of MPS' finances.

Today, after completing our comprehensive assessment of MPS' fiscal condition, we are relieved to say that the school district’s short-term fiscal outlook is not as ominous as we had feared. In fact, the district’s most recent five-year forecast projects a 2017 deficit of about $41 million, which is actually more optimistic than similar forecasts prepared by the City of Milwaukee and Milwaukee County. We also find, however, that the volatile and uncontrollable fiscal environment in which the district must operate creates an “untenable fiscal structure” that continues to raise serious questions about MPS' longer-term future.

Our 84-page report - entitled Passing the Test, But Making the Grade? and released this morning – uses the same fiscal monitoring methodology used previously for reports on Milwaukee County, the City of Milwaukee, MATC, and MMSD. It examines fiscal trends, compares MPS to state and national peers, and analyzes the causes and scope of the district’s fiscal challenges.

A major undercurrent of the report is MPS' lack of control over its own financial destiny. The district is far more dependent than other local governments on state funding, and much more susceptible to fiscal upheaval from policy and program decisions made in Madison and elsewhere. Those decisions not only can involve state appropriations and revenue limits, but also regulatory changes to charter school or private school choice programs that can sharply affect MPS enrollment. MPS' finances also can be hit hard by the chartering decisions of outside entities, and by demographic trends impacting the city.

Other key findings from the Forum's new report on MPS' financial condition:

• While the near-term future is looking better, deep structural issues remain. MPS' health care changes planned for the 2013-14 school year – assuming the continued legality of Wisconsin Act 10 – will save almost $35 million annually and reduce its retiree health care liability by $1.4 billion. The longer-term future looks far more challenging, however, as the district’s revenue streams are likely to be constrained well into the future; its retiree health care liability will remain daunting; and its ability to further reduce personnel costs will be limited by its need to attract and retain quality teachers and administrators to compete with voucher, charter and suburban schools.
• MPS’ high expenditure levels must be placed in context. While prohibitive fringe benefit costs have been an issue, MPS’ high levels of per-pupil spending are driven much more by its receipt of large amounts of state and federal categorical aids. Those funds are used largely to support economically disadvantaged and special needs students, who comprise the vast majority of MPS’ student population. When categorical funds are excluded, the district’s per-pupil spending is only slightly above the state average.
• MPS’ greatest challenge is its lack of fiscal options. After its initial rounds of benefits changes, MPS will have few alternatives left to counter the effects of flat state funding and declining enrollments. The district does not have program revenue, as do other local governments, and it is unlikely to be able to grow the property tax at the same rate as in the past. Meanwhile, enrollment competition exerts pressure on MPS to maintain its teacher compensation structure and capital footprint, and potential programmatic cutbacks run the risk of reducing program quality and engendering further enrollment and revenue loss.

The report credits MPS leaders for pursuing a balanced approach to stabilize the district’s finances that includes not only substantial fringe benefits changes, but also a new facilities master plan and renewed dedication to operational efficiencies. Overall, however, it is difficult to gauge whether successful implementation of those strategies will be enough to solve the district’s fiscal challenges.

For example, the report's fiscal modeling shows that if the 2013-14 benefit changes are implemented, if the district can achieve marginal annual growth in combined equalization aids and property tax levy under future state revenue limits and appropriations, and if MPS can achieve a limited reduction in salary expenditures, then balanced budgets are readily achievable in the next five years. Under another plausible scenario, however, in which the benefits changes made possible by Act 10 do not fully take effect, major revenue streams remain flat, and salary expenditures decrease by a lesser amount, a dire fiscal picture emerges.

The report concludes by stating that “perhaps the most troublesome question raised by the fiscal assessment is whether any entity could be expected to effectively manage a fiscal predicament as challenging as that faced by MPS in an environment that is plagued with such uncertainty."

That finding leads us to urge local and state leaders to reach agreement – once and for all – on the role MPS will play in the city’s education framework, and to define and secure the resources required to effectively fulfill that role.

The full report can be accessed here.

Progress and challenges for workforce development efforts in Milwaukee

In a new report examining Milwaukee’s workforce development system, the Public Policy Forum cites a higher level of coordination and cohesion among key workforce development players since the establishment of the Milwaukee Area Workforce Investment Board (MAWIB) in 2007, but suggests a need for better coordination between the city’s economic development priorities and the needs of its unemployed.

The report – "Pathways to Employment" – analyzes the resources, programming, and priorities of MAWIB and the Milwaukee Area Technical College (MATC), widely considered the two most prominent workforce development entities in Milwaukee, and also summarizes the activities and spending of other key workforce agencies. In addition, the report explores promising efforts to coordinate workforce development activities in Milwaukee’s health care, manufacturing, and food and beverage sectors. 

On the whole, we find that sector-specific workforce strategies show considerable promise for the economy at large, but that many of the individuals being served by MAWIB may not have the education or skill levels to meet the requirements of area employers in sectors being targeted by economic development leaders – like advanced manufacturing, financial services, and water – or to benefit from related technical diploma programs at MATC or WCTC. As Milwaukee identifies economic development goals, therefore, it is important to determine the extent to which those goals should influence workforce development policies and programs. 

That is not to suggest the individuals MAWIB serves cannot advance beyond low-skill, entry-level positions through additional work experience and/or education, nor that the sectors targeted by regional economic development efforts should change. It does suggest, however, that MAWIB‘s role as the entity serving those with the greatest barriers to employment demands a commitment to a broad array of services and strategies that respond both to the needs of key industry sectors and the needs of its clientele.
Other key findings from the report include the following:

• MAWIB has made substantial progress in addressing several longstanding concerns that had surrounded its predecessor (the Private Industry Council), including improved coordination of local workforce development services and greater involvement of major area employers. Interviews with key stakeholders, however, indicate there is more progress to be made. 
• MATC’s technical diploma program offerings seem generally attuned to the demands of the Milwaukee area job market, as estimated by the Wisconsin Department of Workforce Development. In tandem with those offered at Waukesha County Technical College (WCTC), most MATC technical diploma programs seem to be appropriately scaled in relation to job projection numbers, though in many cases retention appears to be a problem. 
• The Milwaukee W-2 agencies’ designation as the one-stop job centers for Milwaukee County, and the sheer size of their funding base, make those organizations major players in Milwaukee’s workforce development system. Consequently, the education and skills levels of W-2 participants logically should play a prominent role in determining the city’s workforce development priorities and strategies. 
• Employment and training services in Milwaukee are largely supported by federal funding sources, which have been declining for many years. Consequently, local workforce development organizations must continue to pursue new revenue sources and improve efficiency in order to maintain existing service levels. The recent creation of the Milwaukee Area Workforce Funding Alliance to better leverage the funding contributions of local philanthropists and to pursue additional funding from national foundations has represented a positive start toward that effort. 

The report concludes by asking whether the region’s economic development vision – and the demands of specific area employers – should drive MAWIB funding priorities, MATC program offerings and Milwaukee’s overall workforce development strategies, or whether the education and skill levels of the local workforce should be the major factor in the development of both regional economic development planning and workforce development priorities.

The goal, it suggests, should be to strike a proper balance between the two.

Racine Unified Takes Proactive Steps to Close Achievement Gaps, Enhance Accountability

Across the state, school accountability has been a hot topic in recent weeks, including the first release of individual school report cards in late October, which sparked lively public discussion about how to effectively measure and improve school quality, student achievement, and teacher effectiveness.

In Southeast Wisconsin, Racine Unified School District (RUSD) is actively engaged in addressing these questions. The district has been working since 2009 to reach its North Star Vision, a community-wide effort to hold the district accountable for grade level performance targets. The intent is to improve student achievement and close achievement gaps so that every student can graduate from high school ready for success in college or careers.

In the Forum’s 15^th annual report comparing RUSD with nine peer districts across Wisconsin, we analyze the district’s performance not only as compared to the peers and North Star targets, but against the overall context of community and student demographics, district finances, student engagement, and state-level policy changes. This year’s report also contains an analysis of school- and district-level value-added student growth, which measures the impact of schools and teachers on student learning.

Among our key findings:

• North Star scorecard: Consistent with last year’s findings, the district generally did not meet its North Star grade level targets. This suggests the targets are in need of revisiting, especially as student growth takes on increased relevance in the statewide accountability system and the WKCE is phased out in favor of a new state assessment. It is anticipated that a new superintendent will investigate the need for revisions to the North Star framework in light of past performance and new state objectives and measures.
• High school completion: The state’s focus on college and career readiness sharpens attention on the district’s high school completion rate, which showed a modest gain in 2010-11 to 73.2%. All student subgroups except white students increased their graduation rate over 2009-10, with African American students showing the most dramatic rise—7.4 percentage points to 60.6%.
• WKCE proficiency rates: The 2011-12 school year brought mixed results in overall district reading and math proficiency. Historically, reading proficiency rates in the district have been among the lowest relative to peer districts and have tended to be higher in 8^th grade than in 4^th grade, only be precipitously lower in 10^th grade. In 2011-12, however, the reading proficiency of Racine 10^th graders jumped seven percentage points to 59%. As with reading, Racine’s math performance is lower than its peer districts and the state average. Unlike last year, however, when the district showed no progress over the prior year, 2011-12 saw Racine’s math proficiency improve slightly in all three grades.
• Value-added growth: RUSD’s average value-added growth in reading over the past three years is equivalent to average growth statewide and outpaces growth in four peer districts. In math, RUSD lagged the state average and was the lowest of the peer districts. At the school level, all but two of RUSD’s 21 elementary schools met or exceeded the state average growth in reading, while all but six did so in math. Notably, the majority of these schools started below the state average in WKCE achievement. These results show how value-added growth analysis paints the picture of achievement with a different brush and highlights the progress of all students, not only those who meet proficiency standards in a given year.

Although it is too soon to tell precisely how the current education reforms will affect the district as a whole, it is clear that RUSD will be feeling their impacts for years to come. Despite the economic challenges RUSD continually faces, this year’s report shows RUSD entering the new policy environment with the momentum of community support of the North Star vision, vital initiatives to strengthen student engagement and early childhood education, and a firm commitment to narrowing achievement gaps related to race, income, language, and disability. For a copy of the 15^th Annual Comparative Analysis of Racine Unified School District, click here. The report was sponsored by Education Racine Inc. and The Johnson Foundation.

Enhanced Role for Nursing in Milwaukee County's Redesigned Mental Health System

Few would dispute the idea that effective mental health care relies on the quality and accessibility of health care professionals, especially nurses. As stakeholders in Milwaukee County work to redesign the county’s mental health system, one of the crucial issues they face is how to build an effective and efficient mental health nursing workforce in light of anticipated changes under the new system.

The Nursing’s Voice project is a collaborative effort of local and national foundations, higher education institutions, and other interested parties to enhance the supply of mental health nurses in Milwaukee.  As part of the project, the Forum surveyed 120 mental health nurses and 34 employers to illuminate the state of the county’s current mental health workforce and to gather insights to inform the redesign planning process and the work of Nursing's Voice.  

Survey responses identified three broad categories of need that an effective redesign effort must address – the need for training and professional development of nurses, specifically in mental health care; the need for a larger mental health nursing workforce today and in the future; and the need for nurses and employers to clarify their respective expectations about what constitutes effective mental health nursing skills and practices. In the research brief that summarizes the survey findings, the Forum describes key policy implications:

• Because of a perceived need for nurses with an interest in mental health both now and in the future, incentives for increasing the mental health workforce might be necessary. The redesign process should also anticipate the need for more nurses. 
• Although employers are satisfied with the mental health nurse applicant pool, very few nurses are nationally certified or advanced practice nurses. This suggests that while schools of nursing provide a basic foundation of mental health training, planners should explore possible reasons for the apparent lack of deeper knowledge and discern how this deficit will affect future service provision.
• Employers envision a larger role for mental health nurses in outpatient/community settings. However, today most nurses work in inpatient settings. Planners should explicitly consider the optimal roles of nurses in community health settings.
• Turnover among mental health nurses is relatively low (less than 10%) with the greatest source of job satisfaction deriving from patient care. Sources of job dissatisfaction are related to pay and advancement. If nurses’ responsibilities become more administrative or policy-oriented under a redesigned system, the reduction in patient contact may cause nurse job satisfaction to suffer (and attrition to rise), particularly if wages do not change.
• Employers and nurses lack consensus about which skills are most important for patients’ recovery. This suggests either a lack of clear communication or differing expectations as to the job objectives. Employers and nurses should work toward greater clarity about these differences if the role of nurses is to change under a redesigned system.
• Employers and nurses find more common ground regarding their views of the specific skills that need strengthening. Planners should therefore focus future professional development resources in these areas.
• Both nurses and employers placed specific importance on the ability of nurses to understand the treatment needs of patients diagnosed with dual/co-occurring disorders in which mental illness coincides with substance abuse. As the county shifts its focus to dual/co-occurring disorder treatment, the need for improved training for nurses will be imperative. 

These findings could serve as guideposts to planners, employers, and nurses themselves as they navigate the uncharted territory of a redesigned mental health care system in Milwaukee County. In addition, Nursing’s Voice will play an active role over the next two years to bring the perspective of mental health nurses to both the redesign and implementation of the new system. To do this, the collaborative partnership will undertake three key activities: 1) conduct research and data collection, such as this survey, to document the current and future need for mental health nurses in the new system; 2) develop strategies to encourage nursing students to pursue a career in mental health service and to provide them with the essential skills to be successful; and 3) provide a platform for the voice of nurses so that the new mental health delivery system can make optimal use of their skills and ideas.

Density and transit in metro Milwaukee

Greater Milwaukee has had a long and contentious debate about public transit, with one common argument against investing in rapid transit being that the region doesn't have the population density to support it. A recent study from the U.S. Census Bureau, however, may be cause for reexamining that contention. It finds Milwaukee among the densest metropolitan areas in the U.S., with greater population density than many of the nation’s most populous metros, including Atlanta, Houston, and Seattle.

In 2010, the Milwaukee metropolitan area – comprised of Milwaukee, Ozaukee, Washington, and Waukesha counties – ranked 15^th in population density among the 102 metro areas in the U.S. with populations over 500,000, with a density of 5,258 persons per square mile. Milwaukee was second only to Chicago among Midwest metros. Notably, the Milwaukee area’s density declined slightly between 2000 and 2010, by 3.6%. This downtick followed a national trend, however, as 33 of the nation’s 50 largest metro areas saw their densities decline during that period. The complete data set can be found here.

Rather than using the traditional method of determining population density, which involves simply dividing total land area by total population, the Census Bureau study used “weighted density,” which averages the densities of each census tract in a metro area while giving each tract a relative weight based on its share of the metro’s total population. Using this methodology, for example, if 75% of a given metro area’s population lives in low-density suburbs, that metro will have a lower weighted density than another metro area of the same size and with the same population where 75% of residents live in medium- or high-density urban neighborhoods.

A frequently-cited example illustrating why researchers are converting to this new method of determining population density is the fact that under the traditional definition, the Los Angeles metro area has a higher density than the New York metro area, which is counterintuitive to anyone who has visited both places. Using weighted density, the New York metro is more than twice as dense as L.A., because the typical New Yorker lives in a denser neighborhood than the typical Angeleno.

While metro Milwaukee is not as dense as New York or Chicago, it is denser than many metro areas considered to have admirable public transit systems, including Seattle and Portland. Milwaukee also is denser than many others that have made recent investments in rapid transit, such as Minneapolis and Phoenix with their relatively new light rail systems, and Cleveland and Kansas City, where bus rapid transit (BRT) systems recently have been developed. 

Rapid transit may come back into Greater Milwaukee’s infrastructure planning at some point in the future. While many factors impact the success of a rapid transit system, we now have a clearer understanding of our population density and how it compares with other metro areas around the country.

City budget manages new fiscal reality, at least for the time being

The main focus of the Public Policy Forum’s annual review of the Mayor’s proposed City of Milwaukee budget – released this morning – is the immense challenge posed by a $59 million pension fund payment in 2013, which marks the beginning of an unprecedented series of pension payments that will impact city budgets for the foreseeable future.  We find that thanks to the foresight exhibited in previous budgets, the impacts in 2013 are manageable.  In fact, the Mayor has proposed a budget that deftly accommodates the remarkable increase in pension payments without fully depleting pension reserves or slashing critical services.

The impact of these new pension payments should not be taken lightly, however.  Pension costs will consume 32% of the city’s property tax levy in 2013, as compared with 15% in 2009. In the next few years, that percentage is likely to continue to grow, as the city’s pension reserves are tapped out and expenditures are cut elsewhere. 

Our 2013 city budget brief also reviews a set of strategic principles proposed by the mayor and his budget team to guide the city through its new budgetary realities.  Those principles emphasize finding new, cost-effective ways of conducting business, with savings reinvested in priority areas while also supporting the sizeable pension payments.  While this concept – labeled “resizing, restructuring and reinvesting” – is both innovative and appropriate, implementing the plan will not be easy.  Indeed, the budget suggests that $65 to $75 million of structural improvements will be needed in the next four years, along with a reduction of 400 to 600 positions.

The 2013 proposed budget also accommodates heightened pension costs with elevated municipal service charges.  The fee increases proposed for 2013 raise the dependency of general fund spending on this revenue source to 19.5%, as compared to 15.9% in 2009.  In fact, in 2013, charges for services become a larger source of support for general departmental spending than the property tax levy, a development that is likely to remain in place for the foreseeable future. 

We conclude by warning that while the 2013 proposed budget largely maintains existing service levels and keeps position reductions at a minimum, it is highly questionable whether enough efficiency can be identified in departmental operations in future years to continue those achievements.  The answer to that question will depend, in part, on the approach the city takes to the revenue side of the equation, as well as how shared revenue fares in future state budgets. 

Our analysis of the 2013 City of Milwaukee proposed budget can be accessed here, and our media release here.

County's finances on the upswing, but big hurdles remain

The Public Policy Forum released its annual review of the Milwaukee County Executive's recommended budget today, and the tone is decidedly more upbeat than in previous years. Because of a smaller (but still substantial) budget gap heading into the year, and thanks to an unexpected $13 million 2011 surplus, this year's county budget is the least difficult in years.  As we point out in our report, multi-year efforts to manage the county's health care benefits and limit long-term borrowing are paying off, though pressing long-term problems remain.

A focus of this year's budget brief is whether the county executive and his budget team seized the opportunity provided by the convergence of these positive circumstances to make continued progress on long-term structural problems, or simply viewed the 2013 budget as a one-year blueprint. We find that, on the whole, the budget responsibly addresses both short-term and long-term issues, though it also leaves the county short on reserves and long on infrastructure repair needs.

Commendable efforts to address immediate fiscal needs include a clean-up of outdated revenue projections in the Behavioral Health Division and Parks budgets; the use of some of the 2011 surplus to cash finance infrastructure repairs; and investments in long-neglected areas of administrative infrastructure, including human resources and information technology.  We also cite the budget's clear priorities when it comes to budget-cutting - which contrasts positively from the across-the-board approach used in many previous years - and the absence of rosy revenue projections and short-term fixes.

The report also cites concerns, however, about the methodologies used to justify big changes to the sheriff's budget, and raises questions about the long-term feasibility of continued cuts in health care benefits and a decision to spend the balance in the county's Debt Service Reserve.

We conclude that, overall, the recommended budget "should be seen as one that proposes several foundational steps that allow the county to continue its path toward financial stability.  Nevertheless, the county's stagnant revenue streams, continued fringe benefits burden, immense infrastructure needs and lack of reserves - combined with the still tenuous legal standing of its recent pension and health care changes - suggest that years of heavy lifting yet will be required before its journey is complete."

The 2013 Milwaukee County Executive Budget Brief can be accessed here.  Our review of the mayor's proposed 2013 budget for the City of Milwaukee will be released early next week.

New standards and tough goals for region's school districts.

Public school districts in southeast Wisconsin are likely to be hard-pressed to meet new annual performance objectives adopted by the state in connection with its No Child Left Behind Act waiver.  The new objectives are quite ambitious, requiring significant annual improvement by all demographic subgroups of students.  In the latest edition of our annual report, "Public Schooling in Southeast Wisconsin," we find that of all the subgroups and across all subjects, in only one instance – white students in math – does past performance indicate the six-year goal is readily achievable.  All other subgroups in all other subjects would need to dramatically improve proficiency if the goals are to be met.  

This year’s report highlights the host of other new state and federal education policies that will greatly impact local schools, as well, such as the adoption of the Common Core State Standards, new school report cards, changes in state standardized testing, and implementation of teacher effectiveness measures.

Major findings include:

• A continued five-year gap between southeast Wisconsin students and students in the rest of the state in reading, math, and science proficiency, as measured by the state’s standardized assessment, the Wisconsin Knowledge and Concepts Exam.
• Overall declines in state aid, federal aid, and local property taxes when comparing 2010-11 actual amounts to  2011-12 budgets, coupled with cuts in expenditures.  The 2011-12 budgets for the region’s school districts averaged $665 less per pupil in total expenses and $525 less per pupil in instructional expenses than the previous year.
• Mostly positive trends in college readiness.  The percentage of students in the region taking the ACT increased 1.1 percentage points, while the region’s composite score declined slightly from 22.8 in 2010 to 22.7 in 2011.  The percentage of AP exams passed by southeast Wisconsin students increased by 1.3 points, and the region’s high school completion rate increased by 0.8 percentage points over the past year.
• Improved student engagement.  Southeast Wisconsin attendance rates rose slightly over the last year, outpacing a statewide increase. Truancy rates in the region dropped, but remain higher than the statewide average. Dropout rates in the region fell more in the region than across the state as a whole.
• A 0.8% decline in enrollment in southeast Wisconsin during the past year, representing the largest one-year decline in enrollment in the region in the past five years.  
• Another year of growing poverty rates.  Almost half of all students in southeast Wisconsin (46%) received free or reduced-price lunch during the 2011-2012 school year, up 11.6  percentage points from 2005-06.

The report is sponsored by Alverno College, Children’s Hospital of Wisconsin, Multiple Listing Service, Northwestern Mutual Foundation, Southeastern Wisconsin Schools Alliance, and Waukesha County Technical College.   

A spreadsheet of schooling data for all districts in the 7-county region is also available.      

Consolidating dispatch operations in Milwaukee County's South Shore

Would an independent consolidated dispatch center better serve the communities of Cudahy, St. Francis, and South Milwaukee?  Our latest report finds that consolidating dispatch could produce substantial operating and equipment savings, as well as operational improvements, which include the ability to better coordinate responses to major incidents. It also indicates, however, that those potential advantages must be weighed against the current benefits for each city of solely controlling its dispatch operations and maintaining those operations at its own police headquarters.

Because dispatch personnel at the three police departments do far more than traditional dispatch activities, with additional duties ranging from parking administration, to background checks for liquor license review, to collecting bail on warrants, the report includes models that take into account the need for each government to cover those non-dispatch tasks.  

Key findings from the analysis include the following:

• By consolidating their dispatch operations into an independent consolidated dispatch center, the three cities could reduce current collective annual operating expenditures by approximately $132,000 to $256,000, and produce equipment savings within the next five years of approximately $400,000 to $600,000.

• If one of the three cities were to perform dispatch services under contract with the other two, or if the three cities contracted with a neighboring jurisdiction for dispatch services, then substantial additional savings could be generated. While the report focuses primarily on creation of an independent consolidated dispatch center, it suggests that contracting for dispatch services could be even more cost efficient because the three cities would not have to lease or purchase space, hire a dispatch center manager, and contract for back office support.

• Potential cost savings must be weighed against loss of local control and the potential loss of 24-hour staffing at each city’s police headquarters. The report notes that the lack of on-site dispatchers may preclude 24-hour staffing at police stations, which some may argue would produce a decline in the level of police protection offered in each community.

• If the three cities do not decide to pursue consolidation of their dispatch operations, then they may wish to at least review whether the administrative tasks assigned to dispatchers might be more appropriately assigned to clerical staff.

In the end, the question of whether to pursue an independent consolidated dispatch center – or to jointly contract for this service with a different jurisdiction – must be considered within the context of each city’s short-term and long-term financial circumstances and public safety needs.  An additional consideration is whether the cities may wish to pursue additional public safety consolidation, which may further dictate the logic of consolidating dispatch services. (Our analysis of the possibilities for shared or consolidated fire and emergency medical services in the South Shore will be released early in 2013.)

The report was funded by the three cities and the Greater Milwaukee Committee, with whom the Forum has partnered to facilitate an Intergovernmental Cooperation Council workgroup that is discussing shared services among Milwaukee County’s 19 municipal governments. In May, the Forum released a report on possible consolidated fire services in the five other southern Milwaukee County municipalities.

Enhancing public policy reporting

The Public Policy Forum is launching a new project this fall that is somewhat distinct from our usual portfolio of public policy research, facilitation and deliberation.  It's called the "Excellence in Public Policy Reporting" fellowship, and we see it as our small contribution to enhancing both the quality and quantity of local government reporting in Milwaukee.

The project - which emanates from a grant by the Milwaukee-based Argosy Foundation - is a partnership between the Forum, the Milwaukee Neighborhood News Service (an online news service that focuses on Milwaukee neighborhoods), and Marquette University's Diederich College of Communication. 

Marquette will select two of its journalism graduate students each year to serve as Public Policy Reporting Fellows, working 10 to 15 hours per week for NNS covering local government news that is of interest to Milwaukee's low-income neighborhoods.  During the first semester of their year-long fellowship, the students will cover one or two topical news stories per week, while the second semester will be devoted to lengthier, investigative-type projects.  The Forum's role will be to use its knowledge of local government committee agendas and proceedings to guide the fellows on story ideas, as well as to advise them on contacts and research.

The project is aimed at improving the public policy reporting skills of budding journalists by exposing them to the halls of government and a professional journalism environment while in graduate school, and by adding the perspective of Forum staff who make their living researching and analyzing government data and programs.  We also hope that it will foment interest among journalism students in pursuing a career in local government reporting, as opposed to some other specialty.

In addition, we hope the project will fill a void by producing meaningful news coverage of local government issues that otherwise would have gone uncovered.  This is not a criticism of our traditional local news organizations, but a recognition that many have seen their news-gathering resources shrink.  In fact, our ultimate hope is that news stories written by the graduate fellows and published by NNS will be of such high quality and interest that they will be picked up by larger news organizations.

Additional information about the new fellowship can be accessed in this media release by the NNS. Also, details on the Forum's other fellowship - the Norman N. Gill Civic Engagement Fellowship - can be found here.

      

Revisiting the role of counties

The title of an article by Alan Greenblatt in this month's Governing magazine asks a question that has received considerable attention in Milwaukee County during the past few years: Are counties "an outdated concept or the future"?  

Local businessman Sheldon Lubar aggressively raised that question in 2008, when he suggested in a speech to the downtown Rotary Club that Milwaukee County government had grown so dysfunctional, it wouldn't work "if Jesus was the county executive and Moses chaired the board of supervisors."  He suggested that the government gradually be dissolved, with its functions spread out to state government, municipalities and regional authorities.

In January 2010, the Public Policy Forum weighed in on the subject with a 160-page analysis commissioned by the Greater Milwaukee Committee.  Our report, "Should it Stay or Should it Go," detailed the logistical, legal and political hurdles that would complicate an effort to dismantle the county, and suggested that alternative restructuring approaches - such as consolidating certain municipal functions at a county or regional level - also be considered. 

Interestingly, the Governing article reveals that virtually identical debates are occurring in other parts of the country.  It cites cases of elected and civic officials who have grown so frustrated with the financial problems and/or dysfunction of their county governments that they are suggesting those governments be dissolved, and other cases where leaders are pushing for the opposite approach of growing their county governments by having them absorb municipal functions.

Another important take-away from the Governing  piece, however, is that while we can and should think about radical restructuring as a response to county government financial woes, we should not allow such contemplation to preclude action on strategies that are less comprehensive, but that may be effective nonetheless.

As Greenblatt puts it, "the growing disconnect between the demand for services and the general county-level ability to pay for them has led to a round of structural changes in the ways that counties do their business. For one thing, counties are outsourcing and privatizing like never before. And they are collaborating more with other governments than they ever have, both with the municipalities and special districts within their borders and with other counties in their regions."

Greenblatt cites examples of county governments across the country that are teaming up with adjacent counties to provide health and human services, or offering their municipalities the opportunity to contract with them for information technology and public works.  He also suggests such initiatives would not have occurred had counties not had a "financial gun to their head."

Whether or not one agrees that lethal fiscal threats are a good thing, applying that principle to our circumstances in Milwaukee County may make sense.  There has been ample discussion about the need to pursue service sharing and functional consolidation at both the municipal and county levels, and a few notable recent examples of success in our region (e.g. consolidated dispatch centers in Racine and Waukesha counties) and in Milwaukee County (e.g. partnerships between Milwaukee County and adjacent counties for delinquency services and Family Care).  Still, movement toward meaningful service sharing between Milwaukee County and its municipalities has been somewhat slow.

While Milwaukee County's fiscal fortunes appear to have improved somewhat in recent weeks, deep structural problems remain.  Greater collaboration with municipal governments in functions ranging from property tax collection to public works remains a promising yet largely untapped area of potential relief.

Analyzing workforce development services in Wisconsin

Wisconsin’s workforce development system is comprised of a broad range of employment and training services, from job search and placement assistance to vocational rehabilitation for individuals with disabilities. The Forum’s latest report – commissioned by the Wisconsin Department of Workforce Development (DWD) – offers policymakers and service providers a view of the system as a whole, including the variety of state and federal funding sources that support workforce development programs in Wisconsin. The report also provides analysis of the trends affecting the state’s workforce development system and offers observations on ways the system may be improved.

Key findings from the report include the following:

While it appears that some consolidation of employment and training funding has occurred in recent years, Wisconsin’s workforce development system remains somewhat fragmented. Overall, nine state departments will receive $407 million in federal and state funding in fiscal year 2012 to offer 36 programs that provide employment and training services. While many programs provide distinct services that target specific populations, state policymakers should consider whether the current structure is the most effective and efficient way to organize these services.

Projected changes in Wisconsin’s workforce and economy may demand increased attention to workforce attraction and retention as well as enhanced emphasis on worker training and education. Over the next 20 years, Wisconsin must address a projected decline in the size of its workforce while ensuring that workers have the training required for jobs that are expected to become available. According to DWD estimates, of the 78,570 projected annual job openings between 2008 and 2018, approximately 60% will require some form of “training” while 37% will require a formal degree. An important question for Wisconsin policymakers is whether the current array of workforce development programs and services is appropriately calibrated to meet the state’s evolving workforce needs, particularly in the areas of skills training and education.

The vast majority of funds supporting Wisconsin’s workforce development system are from federal sources, a trend that may not bode well for the future. The federal government will provide 92% of the funding that supports Wisconsin’s workforce development system in fiscal year 2012, an increase from 88% in 2008. This increase is largely attributable to the lingering national recession, which expanded enrollment for Wisconsin’s W-2 program and brought about a federal stimulus package that included additional support for workforce development programs.

Wisconsin’s acute dependence on federal support may not be sustainable or desirable because of the many restrictions typically attached to federal funds and because of the intense fiscal pressures facing the federal government, which place all federal discretionary funding at budgetary risk. In addition, federal funding for workforce development programs has been decreasing over the long term; the overall budgets for the six largest workforce development programs in Wisconsin have declined from a collective total of approximately $430 million in 2000 to $299 million in 2012.

Some new approaches to structuring workforce programs and diversifying funding sources have been initiated in Wisconsin, and those efforts should continue. For example, despite declining federal Workforce Investment Act allocations, the Milwaukee Area Workforce Investment Board has been able to increase its annual revenue, largely by diversifying its revenue sources. Also, the Milwaukee Area Workforce Funding Alliance (MAWFA), which was established in 2009, may serve as another model for cities and regions looking for additional funding streams to support workforce development programs. MAWFA is a consortium of private and public workforce development funders and service providers in the Milwaukee area that helps to coordinate the distribution of funding from private and public funders for local workforce development efforts.

We hope this report can serve as a guide in ongoing efforts to improve the effectiveness of Wisconsin's workforce development system.

PPF Pearls: Wisconsin and the Internet sales tax

Yesterday the Wall Street Journal reported that tight state budgets have resulted in several governors adopting Internet sales tax agreements with online retailers that require these sellers to collect state sales taxes at the time of purchase, even if they do not have a “brick-and-mortar” presence in the state.

Such agreements ensure these states receive the sales tax they are due; relying on each consumer to report and pay the sales tax owed often leaves state coffers short. For example, self-reported taxes on online purchases (use taxes) were collected from just 29,200 Wisconsin tax filers in 2009, totaling $1.72 million. This represents less than one percent of the total sales and use tax paid in that year. A 2009 University of Tennessee study projected Wisconsin would lose $126.1 million in state and local sales taxes in 2011 and $142.1 million this year from unpaid sales taxes on Internet purchases. Wisconsin’s 5% state sales tax totaled $4.1 billion in 2011, making up one-third of the state’s general purpose revenues, second only to the personal income tax.

While the recent agreements forged by governors help bolster the revenues of individual states, they result in a patchwork of policies across the country. This patchwork complicates business practices for online retailers and puts them in a different competitive stance with physically-present retailers in each state. The result is that a Wisconsin customer of Amazon.com, for example, would not have the state sales tax added to the cost of his or her purchase, but a resident of Kansas, Kentucky, Texas, or any other state with a collection agreement would. In addition, it means an item sold in a physical store in Wisconsin costs more at the time of purchase than the same item sold online, even if they are priced the same.

Instead of seeking tax collection agreements with individual Internet retailers, Wisconsin has joined several other states in looking to Congress to pass legislation allowing states to require online sellers to collect state sales tax. In 1992, the Supreme Court ruled in Quill Corporation v. North Dakota that retailers must have some sort of physical presence in a state before they can be required to collect state sales tax on behalf of that state. Three bills currently under consideration in Congress would tackle Quill’s prohibition by voiding the requirement of a physical nexus.

The Main Street Fairness Act, proposed by Democrats, would allow states that have joined the Streamlined Sales and Use Tax Agreement (SSUTA) to require online retailers to collect state sales tax at the time of purchase. The SSUTA, which seeks uniformity among states by standardizing the definitions of products and taxable items, as well as standardizing and simplifying tax calculations and collection procedures, has a long history in Wisconsin. In our 2000 white paper on tax policy for the new economy, the Forum noted that Wisconsin served as a co-chair of the effort, which began in 1999 with the help of the National Governors’ Association and the National Conference of State Legislators. It wasn’t until 2009, however, that Wisconsin passed the state legislation adopting the standardized definitions required to become a SSUTA member.

The second bill, the Marketplace Equity Act, will be the subject of a hearing in the House Judiciary Committee on July 24. It has been introduced in both the House and Senate with bi-partisan support and appears to be gaining momentum. This act proposes that states wishing to require online tax collection adopt a set of simplified tax rules that are somewhat similar to the SSUTA standards. Some online business groups are worried, however, that by not aligning directly with the SSUTA, the standardization and simplification goals will not be met, as the 22 SSUTA states will be reluctant to pass new and different standards. These states could choose to continue to seek agreements with individual retailers, causing big headaches for national online retailers who would be subject to many differing state tax rules if the act were to pass.

In response to these critiques, a third bill, the Marketplace Fairness Act, has been introduced in the Senate with bi-partisan sponsors. This bill would allow states who are members of the SSUTA to require online sales tax collection, but would also allow non-member states to do so as well, as long as they adopt an alternative set of simplified taxation standards.

Opponents of all three bills argue that by eliminating the nexus requirement for sales and use taxes, Congress would be at the precipice of a slippery slope that could result in all types of new taxes far removed from the activities being taxed. There is also an argument that the requiring sales tax collection by online retailers, even if simplified and standardized, would be so burdensome that it would stifle Internet entrepreneurship.

A May survey by the International Council of Shopping Centers found that 62% of Wisconsin residents polled understand they are supposed to pay a tax on items purchased online, even if the tax was not collected by the retailer at the time of purchase, and that 72% feel having the retailer collect the tax would be easier. In addition, 65% of respondents say they would support a federal law allowing retailers to collect the tax. Until Congress acts, count on Wisconsin’s Department of Revenue to continue to aggressively remind taxpayers that their online shopping sprees are not duty-free.

UPDATE 7/24: More coverage of this issue in the Milwaukee Journal Sentinel http://www.jsonline.com/business/online-retailers-might-have-to-collect-sales-tax-a766ati-163483146.html

Measuring Milwaukee County Juvenile Justice Recidivism

To what should Milwaukee County attribute its declining adult and juvenile detention population? This question took shape in a research brief published a year ago by the Public Policy Forum, entitled “Milwaukee County Detainee Populations at Historic Lows: Why is it happening and what does it mean?” In that report, the Forum urged county law enforcement officials and policymakers to consider whether justice system policies that may have contributed to the decline were effective and should be sustained.

Milwaukee County’s Delinquency and Court Services Division (DCSD) asked the Forum to help in making that assessment for the array of services it offers to youth in the juvenile justice system. Success in curbing repeat delinquent behavior can have impacts into adulthood, making the juvenile justice system one critical piece in efforts to control crime and its related costs. 

The most common way to assess the success of juvenile delinquency programming is to measure the extent to which participants commit additional crimes, otherwise known as recidivism.  However, the best approach to defining a recidivistic event is not always clear cut, with many variations seen nationally.

The Forum’s newest research brief reviews the manner in which DCSD defines recidivism and its progress in reducing it.  The following points summarize our findings:

• Using DCSD’s recidivism methodology, we find no significant changes in recidivism over five cohorts of youth aging out of the juvenile justice system between 2006 and 2010.  However, categorizing youth based on the year in which they age out of the system (i.e. turn 17-years-old) has its limitations, as this approach blurs impacts of year-to-year policy and programmatic changes.
• Under our alternative methodology for measuring recidivism, we categorize youth by the year in which they are referred for their first delinquent offense and allow for a uniform follow-up period.  Using this method, we find lower rates of recidivism for youth first referred in 2007 and 2008 than in the prior three years. Although two years of improved outcomes do not guarantee a new trend, this positive improvement begs further research into whether changes made in policy or programs during that time could be the cause.
• Under either measure of recidivism, we find a small group of chronic offenders accounts for a substantial percentage of repeat offenses, a trend often seen nationally.  Consequently, increased attention to programs and strategies aimed at chronic offenders may be warranted.
• It may be appropriate for DCSD along with other justice system officials to carefully contemplate which recidivism definition or set of definitions would best achieve performance assessment goals in the future.

Recidivism likely will continue to be the most prominent outcome measure used by policymakers in Milwaukee County to understand the performance of juvenile justice programs. Continued progress in developing and standardizing this evaluative tool will be critical as a means of helping the county's juvenile justice system articulate system performance and improve the spectrum of services it provides to county youth.

Our research brief, commissioned by DCSD, can be accessed here.

Afterschool in Milwaukee: Is it child care?

In our latest report on child care policy in Wisconsin, released today, the Forum estimates between 24,000 and 30,000 school-age children attend afterschool programs in Milwaukee.  Starting this week, these school-age programs will now be subject to the same quality rating system as child care programs for younger children.  This promises to bring dramatic changes to many afterschool programs, as school-based programs have not previously been reviewed by state officials for regulatory compliance.

The inclusion of afterschool programs serving low-income children in the quality rating system results from the fact that many programs receive state payments under the state's child care subsidy program, Wisconsin Shares.  This child care revenue stream will become increasingly important to many afterschool programs which had been mostly reliant on federal dollars with a limited lifetime.  The result is a search for sustainability under a changing mix of revenues that has both practical and policy implications.  These implications are analyzed in our new Research Brief, "Afterschool in Milwaukee: Is it Child Care?"

Issues considered include:

1. Differences between child care and afterschool funding sources.  Federal and state funds for child care are awarded to low-income families to support their ability to afford the providers of their choosing.  In contrast, federal afterschool funds are awarded to specific programs operating in partnership with specific schools and serve all families, regardless of their ability to pay.  

2. Differences in regulatory agencies overseeing school-age programs.  Child care programs are regulated by the state's human services agency, the Department of Children and Families, while many afterschool programs have fallen under the purview of the state's education agency, the Department of Public Instruction.  These agencies work together on many issues, but have different missions and goals.

3. The ability of the child care quality rating system, designed by experts on high quality early childhood education and informed by decades of research, to accommodate school-age afterschool programs, which differ from early childhood programs in many significant ways.


The Brief also provides examples from other states that have grappled with the revenue sustainability problem, as well.  Some of these examples cite the use of federal child care funding streams, but others utilize local revenues, state education funds, or state income tax credits.  

The role and impact of Milwaukee’s Protective Payee program

Since 2001, three Milwaukee nonprofit agencies have collaborated on a program that provides financial oversight, budget counseling, and supportive case management to more than 200 homeless adults with disabilities each year. A new Forum report released this morning provides an assessment of that program – known as the Protective Payee program – within the context of Milwaukee County’s effort to redesign its adult mental health system.

In addition to describing the Protective Payee program’s design and scope, analyzing its impacts on client housing and health outcomes, and assessing the program’s financing, we provide an in-depth examination of how the program fits into the broader spectrum of case management services available in Milwaukee County for the homeless and persons with mental illness. This analysis offers policymakers a view of how the overall “system” functions, revealing potential opportunities to improve effectiveness and efficiency and assisting in deliberations on the appropriate continuum of case management-type services moving forward.

Key observations emerging from this analysis include the following:

• The Protective Payee program appears to be effective in stabilizing housing for homeless individuals with disabilities. While it is not possible to conclusively determine that the program could be applied successfully to other populations in Milwaukee County in need of case management services, it does suggest an expanded program or similar programs based on the Protective Payee model could be an effective option for the same clientele in other Wisconsin counties.
• Improved coordination between local case management programs could make it possible to increase enrollment in the Protective Payee program and Milwaukee County’s Shelter Plus Care program, potentially alleviating some demand on the County’s Behavioral Health Division (BHD) and serving more clients overall. In order to do so, Milwaukee County and the Protective Payee agencies would need to seek additional funding from HUD or philanthropic sources, or the County would have to identify additional local resources. While the prospect of additional HUD funding may be unlikely, the County may determine that use of additional local resources to provide stable housing for additional BHD clients would pay off in the form of reduced inpatient and crisis care costs.
• In light of concerns that have been raised regarding the limited capacity and flexibility of BHD’s two case management programs (Targeted Case Management and Community Support Program), enhancing capacity at the lower-intensity end of the service spectrum may be a worthwhile strategy to open up space for those in need and better coordinate provision of the most intensive services. A key recommendation of a 2010 report authored by a national consultant and the Forum was to explore providing case management services to a larger population by developing a multi-layered continuum of case management care that is flexible and responsive, moving people to higher and lower levels of care over time, as appropriate. A consistent review of client needs for all case management program clients, along with consideration by BHD of possible expanded partnerships with community agencies to make greater use of lower-intensity support services and case management programs, could help to ensure that individuals are being served by the most appropriate program and that space is available in the County’s highly-intensive CSP program for those with thegreatest needs.
• Positive and stable relationships between clients and case managers are crucial to achieving the primary goal of any case management program: improved client well-being. Local mental health professionals stress the importance of developing and maintaining constructive, stable relationships between clients and case managers regardless of the intensity of support being provided. Improved coordination between programs could also allow those relationships to be maintained, as desired by the client, even if he or she shifts between programs.

We hope that this analysis will assist policymakers in determining the appropriate role for various case management service models in Milwaukee County’s changing mental health system. In addition, we urge BHD and its mental health redesign task force to use this information to consider whether the services analyzed in this report collectively function to provide appropriate levels of community-based services that meet the varied needs of individuals who are seeking them, and/or whether there may be ways to more effectively deploy existing and additional mental health and homelessness prevention resources to establish an even better continuum of care.

Property tax levies decline for the first time in over a decade

The aggregate gross tax levy for southeast Wisconsin totaled $3.9 billion for 2012, a decrease of 0.3% over the previous year and the first decrease since at least 2000. Until this year’s slight decrease, the aggregate levy increased annually, although the rate of increase in the previous four years had been steadily slowing.

This finding highlights the Forum’s 2012 analysis of property values and property taxes within the seven-county southeast Wisconsin region, which was released today on our website.  The report’s primary objective is to measure trends in property values – one of the region’s most critical indicators of economic health – and examine how those trends impact the capacity of local governments and school districts to bring in the levy revenues required to deliver essential public services. 

The report finds that this relationship has been impacted significantly by the stringent limitations on property tax increases included in the most recent state budget.  The ability of municipalities and counties to increase their levies was generally capped at the percentage increase in net new construction, while new school district revenue caps required a 5.5% reduction in combined levies and state aids for 2012.

Because school districts account for the largest percentage of the aggregate tax levy in southeast Wisconsin at 45%, school district levies tend to drive overall changes to regional levies. The aggregate school district tax levy for southeast Wisconsin steadily increased from 2007 to 2011, before decreasing 1.2% in 2012. Also, for the first time since 2008, more municipalities (83) saw their corresponding school district tax rate decrease than increase.

This year’s report also analyzes property values, with specific consideration of multi-year trends. Total property values in southeast Wisconsin decreased 2.4% from 2010 to 2011 – the third consecutive year with a decrease, but a smaller decrease than the previous year.  Aggregate property values in every county in southeast Wisconsin decreased from 2010 to 2011 for the second year in a row.  These declining values also contribute to lower levies. 

Not surprisingly, property tax rates in southeast Wisconsin continued their upward trend in 2012.  The aggregate gross tax rate in the region increased $0.46 per $1,000 of property value, marking the fifth consecutive annual increase, though the rate of growth has slowed.  The aggregate gross tax rate in southeast Wisconsin is now $22.04 per $1,000 of assessed value. Tax rates typically can be expected to increase during a time of property value decrease, even under strict levy limits, as the drop in value requires a tax rate hike just to maintain a stable tax levy.

This year’s report was sponsored by Robert W. Baird & Co. To download the report, click here.

2012 Salute winners demonstrate innovation and efficiency

Later this month, the Public Policy Forum will hold its 20th annual Salute to Local Government awards breakfast, which recognizes outstanding performance by governments, school districts and individual local government officials.  The 2012 winners were announced today, and they include an impressive mix of projects and individuals who demonstrate the meaning of good government.

This year's group winners include a county treasurer's office that was able to eliminate two full-time staff positions by implementing a series of business process improvements; a city government that leveraged a federal homeland security grant into a comprehensive upgrade of its citywide information technology infrastructure; a set of Milwaukee County cities and villages that combined their public safety dispatch services; and a city library and economic development department that joined forces with a neighborhood organization and private developer to create a shining new housing and library complex.

On the individual side, winners include one of our region's most vibrant and energetic county department heads, as well as an individual who lost his recent re-election bid, but who will always be remembered for his efforts to promote intergovernmental cooperation and civility in government.

If there is a theme threading its way throughout each of this year's winners - as well as the near-record 40 nominations we received - it's that there is no shortage of innovation and ingenuity in southeast Wisconsin's local governments and school districts. It's nice to be able to celebrate those qualities - even if just for one day - and to recognize that despite our differences on issues pertaining to the size and role of government, each of us has an interest in celebrating outstanding performance by the people who work there.

The Salute breakfast will be held on Tuesday, June 19, at 7:30 AM at the Italian Conference Center in Milwaukee.  Click here to sign up and here for the press release with details on the full list of 2012 winners.

Possibilities for shared or consolidated fire services in southern Milwaukee County

A new report released by the Public Policy Forum this morning finds that the five municipal fire departments in the southern part of Milwaukee County work closely together, providing mutual aid in times of high activity and cooperating in areas ranging from training to special rescue teams.  That begs the question: could the five departments do even more to share services, perhaps even following the lead of the North Shore Fire Department to fully consolidate?

In order to assess that question, the Forum worked with administrators and fire chiefs from Franklin, Greendale, Greenfield, Hales Corners and Oak Creek to explore several options for enhanced sharing and coordination, including a model for a consolidated fire department. The project was initiated by a work group formed one year ago by the Intergovernmental Coordinating Council, which has been exploring a range of possibilities for greater service sharing among Milwaukee County’s 19 municipal governments.

A similar fire and dispatch project also is underway in Cudahy, Saint Francis and South Milwaukee.

The new Forum report focuses initially on consideration of enhanced cooperation and sharing in various areas of fire department operations that could occur within existing administrative and operational frameworks.

It then moves on to model three increasingly comprehensive consolidation approaches:

• A Coordinated Support Services model, which involves the creation of unified bureaus to conduct training, vehicle maintenance and fire inspection services for the five departments collectively.
• An Operational Consolidation model, which envisions a unified operations framework under which the “closest unit responds” regardless of municipal boundary, but which retains the five departments as separate entities with independent personnel, vehicles and governance.
• A Full Consolidation model, under which the five departments would merge into a Southern Milwaukee County Fire Department with its own governance structure, budget, personnel, equipment, and operational framework.

The fiscal and operational analysis associated with those models suggests that each holds potential for improving the coordination and efficiency of fire and emergency medical services in the five communities. The analysis also shows, however, that substantial financial savings only would be achieved with the more comprehensive consolidation models.

The full consolidation model, for example, could yield more than $1 million per year in annual operating budget savings and nearly $4 million in vehicle replacement savings over five years, without closing any existing station locations or cutting firefighter positions. Those potential benefits, of course, must be weighed by each municipality against any perceived negative impacts that would result from ceding local control of fire and emergency medical services to a consolidated department.

The report concludes by suggesting that the five municipalities consider the findings within the context of their own financial and operational needs and concerns. As they do so, it says, “they should keep in mind that a phased approach is a viable option, in which enhanced service sharing is implemented first as a possible precursor to operational or full consolidation; and that additional planning and analysis – as well as creation of a framework for an intergovernmental agreement between the five communities – will be needed to definitively project fiscal and operational impacts associated with the operational and full consolidation models.”

The full report – which was sponsored in part by the Helen Bader Foundation and the Greater Milwaukee Committee – can be accessed here.

R&D on the rise at Milwaukee-area universities

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

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

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

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

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

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

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

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