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

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

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

Among our key findings:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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