Monday, April 30, 2007

"Shopping" for schools isn't a good metaphor

In this week's Crossroads section, the Journal Sentinel hosted another community issues round table discussion, this time about K-12 education. Interestingly, this week one invited guest at the round table was unable to attend, so he was given room to write his own editorial. Brother Bob Smith, President of Messmer Catholic Schools, has this to say about K-12 education:

[The] Milwaukee Parental Choice Program. . . is one of the jewels of our city and state and is talked about and replicated in cities, states and countries around the world. . . This is one of the few times in life in which people with little money can go into a store full of school options and pick what is best for their child. This provides the poor with the same educational choices as the rich. [Emphasis mine.]
The school choice program does indeed open up many options for low-income students, but unfortunately there is no such "store." Parents cannot get information about their private school options anywhere other than the 124 independently run schools themselves. The only place they can even get a list of all the participating schools by grade level and religion is from the Public Policy Forum. And that's about all the information we can provide them. Any parent hoping to get information about student achievement, graduation rates, curriculum, or even after-school programs had better gas up or get a bus pass because these schools are located all across the city. Which means Brother Bob is reaching when he says, "Around Wisconsin, [the voucher program] is parallel to open enrollment for public schools."

Parents interested in open enrollment can simply visit the state's schooling information website to view, and compare, data on all of Wisconsin's public schools, including charter schools. Parents interested in private schooling are not offered this convenience. In fact, over a year ago PAVE, one of the original voucher program proponents, began, for the first time since the program started in 1990, an initiative to collect and disseminate private school information in a parent-friendly way. That effort has since been abandoned.

The result of this opacity? A greater burden on low-income parents. When Brother Bob says the poor have the same educational choices as the rich, he's only half right. The poor could have the same options as the rich, if they knew what they were. In reality, the rich have many more options, mainly because the opportunity costs for them to research schools are much lower. The poor, we have found via survey work, depend on word-of-mouth referrals when choosing schools. Thus, we end up with a choice program in which nearly a third of the schools enroll 99% or more voucher students. Or, in other words, schools that no rich students have chosen.

Friday, April 27, 2007

"Slow train coming"

On April 3rd, 2007, history was made. On that day, a French TGV train set a new world speed record of 357 MPH, smashing the old mark of 320 MPH set in 1990.

Meanwhile, we may just be setting a record of our own here in Milwaukee County. After 16 years of debate, Milwaukee County, the City of Milwaukee, Wisconsin Center District, and the Metropolitan Milwaukee Association of Commerce still have not agreed on how to spend $91 million in federal funds to improve our transit infrastructure.

Jeffrey F. Kober, President of Oak Creek manufacturer Milwaukee Composites Inc., can be counted as those not impressed by Milwaukee's inaction. He wrote the following in response to an editorial by Frank Jandt, editor of Mass Transit magazine.

"Fred, I passionately share your viewpoint on the poor state of transit affairs in our mutual home state of Wisconsin. I am embarrassed at how Milwaukee has completely mismanaged the $91 million fund during the last decade.

I operate a rapidly growing transit vehicle component manufacturing company located in the Milwaukee area and we provide good quality jobs for all our employees. All the jobs we provide have been created by the increasing demand of mass transit bus and railcar projects underway in most if not all other cities of comparable size to Milwaukee throughout North America. We also export our products to Korea and China to serve their growing commitment to mass transit railcar and bus projects.

While the rest of the world embraces mass transit, Milwaukee truly needs to recognize that the time for a serious commitment to transit is upon us. The proven benefits of transit are strong and clear. Milwaukee leaders need to end their political posturing and gather a community together to formulate an organized transit plan for the betterment of the community."

Maybe it's time for the City and County to sit down together and iron out their differences on how best to use the $91 million. It's been 16 years, after all. Otherwise, perhaps they should think about giving the money back to the federal government. There are other cities that can make a decision.

Wednesday, April 25, 2007

State budgets as policy documents

As Rep. Frank Lasee notes this week, Wisconsin's biennial budget, as proposed by the Governor, included several substantive policy provisions. Now that the budget is in the hands of the legislature's Joint Finance Committee, other substantive provisions could be added. Rep. Lasee points out correctly that:

"Governors (or legislators) who want bills to pass without having them considered individually amend them to the budget bill. Once it is under the umbrella of the budget bill (“under the Christmas tree” as some people call it), it is very difficult to get it removed. People are generally more worried about the big ticket items in the budget and let the minor amendments pass without as much review."
Including substantive policy in the budget makes it nearly impossible for the proposed policy to receive its own public hearing for debate of its merits. Did you know Milwaukee's private school voucher program was created via the state budget process? When searching the legislative history of that program as research for our book, we were amazed to discover that no public hearing was held on the topic of private school vouchers.

But not every state operates in this manner. Colorado, for instance, has a constitutional requirement that the "long bill" (as their budget bill is known) contain only appropriations and no substantive law or policy. In addition, the long bill is drafted by the nonpartisan staff of the legislature's Joint Budget Committee, which makes it easier to keep substantive policy proposals out. (Note, also, that the JBC receives a draft budget from the governor, but is under no obligation to use it as a starting point.)

Thus, in Colorado and other similar states, proposed policies are debated on their own merits and the resulting appropriations are made within an appropriations bill. Importantly, the Colorado constitution also forbids appropriations bills from containing more than one subject, which further prevents the occurrence of Wisconsin-style political slights-of-hand.

Lasee's suggested solution to Wisconsin's partisan budgeting process is for his colleagues simply not to pass a his words, "If we cannot pass a budget we would be proud to take back to the constituents that elected us, we should not pass a budget at all." Colorado's budget process isn't without problems (transparency being one) but it illustrates a different, more productive, way of approaching the problem Rep. Lasee points out.

Tuesday, April 24, 2007

A Lesson from the Quiet Company

Northwestern Mutual (NML), Milwaukee's second largest corporation (112th largest in the United States), is highlighted in a recent Wall Street Journal article as possibly the only company in corporate American that invites a small group of policyholders to evaluate the company and issue an annual report. According to Ed Zore, NML CEO, every year the company brings in four or five policyholders to pour over books and meet with senior management. Mr. Zore states:

"...they come up with ideas for us that are usually pretty helpful on how we can improve the business. It keeps us on our toes because we know every year we're going to have some new people that come in and we've got to explain to them all we do and how we do it. They always challenge us..."

The public sector could learn something from NML. Why not invite a few taxpayers into some of our large public institutions to kick the tires, interview department heads and issue an annual report. Essentially, this is what was recommended by the Public Policy Forum in last year's report on City of Milwaukee economic development efforts. The recommendation was to have the city "submit a comprehensive annual report on economic development progress to the common council, the mayor, and general public." After all, why spend $100 million per year on economic development if we don't know what we're getting out of our investment.

Just this month, the City of Milwaukee Department of City Development published its first annual report. It provides details on jobs created and retained, number of housing units created, private dollars leveraged and amount public support. To make future annual reports more robust it may be beneficial to include performance comparisons with previous years and other peer cities along with notes on any progress made on strategic goals.

Like at NML, where policyholders annually challenge upper management to prove their worth, it may be time for us taxpayers to annually challenge our governments to report measurable and strategic results.

Monday, April 23, 2007

Social experiments as good public policy

New York City Mayor Michael Bloomberg recently announced a new privately-funded program aimed at moving families out of poverty. The program, Opportunity NYC, is being called a conditional cash transfer program. The basic gist is that participating families will work toward a series of goals and will receive cash bimonthly for each goal they meet. After a year a family could earn up to $5,000.

It will be interesting to see how this program is received. Most of the goals are short-term (school attendance, doctor and dentist visits, job training activities), but it is long-term planning and goal setting that will be the key to truly lifting these families out of poverty, I would guess. It's not clear how many years the families will be in the program, nor how long they anticipate the funding will last. Opportunity NYC is modeled on a cash transfer program in Mexico that has been shown to be effective. Whether small cash rewards provide the same incentive in New York City as they do in Mexico is yet unknown.

The most encouraging thing about this program, however, is that it is designed with a built-in evaluation, so that its effectiveness can be analyzed scientifically. (There will be a comparable control group of families who will work toward the goals but not receive the cash.) If a government is going to try a new and innovative program, even if it is privately funded, ensuring there will be a rigorous evaluation is important. If it works and is cost-effective, great...bring it to scale. If it doesn't, it is unfortunate, but better to know than to expose even more families to it.

This is a lesson Milwaukee and Wisconsin should learn. Innovation in public policy can be desirable, but without evaluation from the get-go, we don't know whether we should invest more or try another option. It shouldn't matter whether the innovation is publicly or privately funded; taxpayers want to know they are making wise investments just as much as foundation officers do. Evaluating after several years and even more millions are spent is not good public policy. . . no matter what the results of the underlying program turn out to be.

Thursday, April 19, 2007

Capital Project Audits Show Continuing Problems

The City of Milwaukee’s Comptroller Office released its audit of the Canal Street expansion project. The audit was requested by Alderman Murphy in order to determine why the project cost millions of dollars more than was originally projected. The audit determined that the City of Milwaukee Department of Public Works (DPW) had never provided an accurate cost estimate of the entire project.

The most disturbing part of the audit is that many of the recommendations to improve the capital project planning process were made four years ago in the comptroller’s audit of the 3rd District Police Station project. These recommendations include the development of better cost estimation procedures; a cohesive system for monitoring and reporting capital projects; and a comprehensive project budgeting system rather than separate budgets for different project components.

The city is currently involved in a very large, expensive capital project: the City Hall restoration. According to DPW and the Department of Administration, the process for this project is going much more smoothly and is in accordance with some of the comptroller’s recommendations. Hopefully, these mechanisms will keep the city’s capital projects in check.

Wednesday, April 18, 2007

Are you your own worst enemy?

The Business Journal recently reported the findings from an Aurora Health Care public health survey ("Violence cited as top city health problem.")

Violence was stated as the city of Milwaukee’s top health problem followed by alcohol and drug use and chronic disease. The article states 58% of those surveyed felt violence was one of the 3 biggest health issues Milwaukee faces. However, obesity-related diseases, such as heart disease and cancer, are the main concern of insurance companies (Fischer, 2007). So what should one be more concerned about in Milwaukee? Violence or chronic disease? The answer may depend upon your age group.

The Wisconsin Interactive Statistics on Health from the Wisconsin Department of Health and Family Services allows users to query for the most prevalent causes of mortality in our seven county area. The data from the graph above suggests people’s fears of violence as a health concern may be warranted if you are young. Ages 15-29 are more likely to be killed by violence versus cancer or heart disease, and they are even more likely to die in an accident.

There may be several reasons why more people in the survey feared violence versus chronic disease. The immediate danger of someone being the victim of a criminal act may be more frightening than the prolonged danger of developing a chronic disease. Lets say you were to put a person in a room with a serial killer and a doughnut; chances are your test subject would be much more fearful of the murderer. However, in the real world we are more likely to be tempted by junk food versus chased by violent criminals. It may be that people are more fearful of what others may do to them versus what they may do to themselves. Also, media attention to violence may instill fear among viewers more so than warnings about lifestyle habits leading to certain chronic diseases. Often times the six o'clock news will show a crime scene with victims being hauled off in body bags or stretchers, but they often do not show the actual victims of chronic disease fatalities.

Also check out the national odds of dying of certain diseases and injuries.

Tuesday, April 17, 2007

We don't predict; we project

The Forum’s latest report on taxable property values reveals that Waukesha County’s day in the sun may have to wait a few centuries. If we weren’t researchers, we’d probably be embarrassed because a few years ago we projected Waukesha was on track to overtake Milwaukee County by the middle of the next decade. Instead, the city of Milwaukee has achieved a turnaround and currently leads the region, and the state, in tax base growth.

In 2000, our annual research brief on taxing and spending reported Waukesha’s value was growing 7% annually and at that rate would soon overtake Milwaukee, which was growing just 4%. The latest report found Milwaukee County valued at $64 billion, up 12% over last year whereas Waukesha County grew a relatively small 9% to $49 billion. This means Waukesha would be projected to overtake Milwaukee … never. Not that I’m making any predictions.

Radical Surgery: PPF Viewpoint Luncheon

The Forum's next Viewpoint Luncheon May 9, 11:45 am, Pfister Hotel:

Radical Surgery--Wisconsin’s search for access to lower-cost health care

A panel of experts will sort out various ideas and recent plans for improving health care access and costs for Wisconsin residents.

Panelists include Kevin Hayden, secretary, Wisconsin Department of Health & Family Services; Jon Richards, assistant minority Assembly leader; David Newby, president, Wisconsin AFL-CIO; and Dianne Kiehl, executive director, Business Health Care Group of Southeastern Wisconsin.

Moderated by Paul Nannis, vice president of government & community relations, Aurora Health Care.

Sponsored by Foley and Lardner, LLP and United Healthcare.

For more information and to reserve your place visit

Monday, April 16, 2007

A New Commission?

The Milwaukee Journal-Sentinel reports that Governor Doyle has appointed a Commission to Reduce the Racial Disparity in Wisconsin's Criminal Justice. The key is to figure out why Wisconsin has the third highest ratio (18:1) of incarcerated minorities to whites, and to fix it.

While the main charge of the group seems to be to look for discriminatory practices throughout the state's criminal justice system, the story said the governor wants to consider how poverty, parental involvement, education and abuse all factor into the crimes. That is certainly a laudable goal, but doesn't an examination of the root causes of crime deserve its own high-profile commission?

Friday, April 13, 2007

Walworth is the new Waukesha

Walworth County has surpassed Waukesha County as southeastern Wisconsin’s wealthiest county in terms of per-capita property value. According to the Milwaukee-based Public Policy Forum’s latest property value report, Walworth County’s 2006 per-capita property value is $132,391, compared to $130,348 for Waukesha County. Its per-capita property value increased 12.8% from 2005-2006, the highest among the seven counties that comprise southeastern Wisconsin.

“Walworth is an emerging story in our region and needs to be respected as one of its key players,” says Forum President Jeff Browne.

Waukesha County per-capita property value increased 8.2%; Milwaukee County’s increased 12.5%, second to Walworth County.

During the same period, the city of Milwaukee’s overall tax base grew 15.1% in 2006, the largest increase for the city since 1992. “Starting in 2003, when the city of Milwaukee’s one-year increases began to accelerate, the region’s increases surpassed the state and for the second consecutive year, the city’s increase was greater than both the region and the state,” says Browne. “You can make the case that when the city does well, the rest of region follows suit and does well also. The city essentially fuels the region.”

Walworth County had the largest overall tax-base growth, 14.2%, in the region from 2005 to 2006. It also had the highest growth among the seven counties in residential and manufacturing tax bases. Waukesha County, on the other hand, grew much slower last year. Its overall tax base increased only 8.9%, sixth among the region’s seven counties. “Apparently a certain level of wealth is reached and things tend to slow down a bit, particularly in a region that is only holding its own economically,” says Browne. “Ozaukee County another relatively wealthy county in the region had the slowest tax-base growth in southeastern Wisconsin, at 7.3%.”

Milwaukee County’s total tax base – which grew 12.2% in 2006, second to Walworth – far surpassed other counties in the region in value. Its overall tax base was $63.6 billion; Waukesha County was next highest at $49.5 billion, followed by Racine at $14.8 billion.

The tax base for all of southeastern Wisconsin grew 10.7% from 2005 to 2006, to $178.3 billion. The state grew 9.6%.

The Forum report looked at three primary categories of property value: residential, commercial, and manufacturing. Those categories comprise the greatest portion of the tax base. Residential and commercial property made up 94% of the region’s total tax base. Manufacturing accounted for 2.5% of the tax base.

Related material:
Table 1: 2006 equalized property values
Table 2: 2006 per-capita property values

Thursday, April 12, 2007

Public or private, school is boring

A new study in Science finds that schoolchildren in the US have only a 1-in-14 chance of experiencing a rich, supportive elementary classroom.

Researchers went to 2,500 1st-, 3rd-, and 5th-grade classrooms, tracking cohorts of students as they progressed through the school, to observe teachers and the typical day experienced by students.

Some of the findings:

  • Fifth-graders spent 91.2% of class time in their seats listening to a teacher or working alone, and only 7% working in small groups, which fosters social skills and critical thinking. Findings were similar in 1st and 3rd
  • In 5th grade, 62% of instructional time was in literacy or math; only 24% was devoted to social studies or science.
  • About one in seven (14%) kids had a consistently high-quality "instructional climate" all three years studied. Most classrooms had a fairly healthy "emotional climate," but only 7% of students consistently had classrooms high in both.
My first thought was whether the researchers visited both public and private schools. The USA Today article about the study (Science is available online only to subscribers) mentions that there were no differences between public and private schools. Could that be true? There is not any measure on which the classroom experiences in public schools differ significantly from those in private schools? This finding will certainly shock proponents of market-based education reform (i.e. private school vouchers). But it doesn't shock me. I've visited public and private schools in Milwaukee for eight years as a researcher at the Forum and found that the variety of quality in both public and private schools is extraordinary. So, I'm not surprised that when all that variety is averaged out, there aren't big differences between the public and private schools.

Interestingly, this finding is bound to be equally irksome for public school advocates like the teachers' unions. Not only are their members not doing enough to stimulate their students' brains, they can't even blame it on the pressure of working under the No Child Left Behind (NCLB) requirements. If NCLB were really to blame for this lack of richness in the classroom, you would expect to find some differences when observing in private schools, which are not subject to NCLB.

So, from my read, the findings mean that you aren't guaranteed an engaging and supportive teacher just because you're in a private school, and federal testing requirements aren't the root cause of lackluster creativity in the classroom. Teaching is hard to do well, period. If you're a parent, the lesson you should take from this is to visit your own children's classrooms frequently. If your kids aren't getting the higher-order problem solving skills, or the support, or the enrichment they need, you'll know it.

Tuesday, April 10, 2007

PPF in the morning

The reaction to Don Imus referring to female basketball players as “nappy-headed hos” highlights an important finding from the Forum’s 2006 survey on race relations: Whatever our race, we are typically not exposed to offensive racial terms. In the survey, we asked 400 whites, 400 blacks and 200 Hispanics: “In the past year, …has someone called you an offensive term?” Responding “yes” were 11% of whites, 23% of blacks, and 32% of Hispanics.

Interestingly, the survey found that people of color are more likely to feel ignored than insulted. Half of African Americans and 38% of Hispanics report having been ignored because of their race, presumably by a store clerk, a loan officer or perhaps a teacher. While overt racial jokes and slurs draw attention, saying nothing whatsoever can be offensive too.

Monday, April 9, 2007

Structural quicksand

On March 20, Milwaukee Mayor Tom Barrett testified before the State Joint Finance Committee about the "Milwaukee Initiative," the money appropriated for Milwaukee in Governor Doyle’s proposed 2007-09 budget.

The verdict? He wants more money.

While that’s not a shocking statement from the mayor, the looming budget gap he noted is a little surprising. Even with $4 million in additional state shared revenue and a 3% property tax increase, the city is facing a $12.5 million funding gap for 2008 when increases for only a few programs are taken into account (most notably, an additional 100 Milwaukee police officers over the next two years).

Of course, the mayor has time to find other revenue and make cuts to balance this gap before he proposes his own budget in September. His statement makes it clear, however, that the city is still facing a significant structural deficit (the gap between ongoing revenues and the cost to continue).

Thursday, April 5, 2007

Housing price roller coaster--really!

Someone has turned the graph of inflation-adjusted US housing prices since 1890 into a roller coaster ride.

Let's just say that this isn't a ride you'd want to stand in line for.

Hat tip: 13th Floor

Wednesday, April 4, 2007

PPF Presents

On April 25th, Forum president Jeff Browne will present the results of our race relations survey at a breakfast event sponsored by The Business Journal, the Valuing Diversity Task Force of Sussex/Lisbon, the Sussex Area Chamber of Commerce, the Menomonee Falls Chamber of Commerce, and the Hamilton School District.

After Jeff’s presentation there will be a business panel discussion on “Diversity and Doing Business in Waukesha County.” The panel includes: Keith Everson, President, Rexam Sussex; Gloria Keshemberg, Manager of Employment and Employee Relations, Community Memorial Hospital, Menomonee Falls; Pat Pearman, Global Manager of Diversity, GE Healthcare; Rob Quadracci, Director of Employee Services, Quad/Graphics, Inc.; Mark Sabljak, Publisher, The Business Journal of Milwaukee; Daniel Trawicki, Waukesha County Sheriff; and Daniel Vrakas, Waukesha County Executive.

For more information and to register, call the Hamilton School District at 262-246-1973 ext. 1100.

Click here for more details on the April 25th diversity presentation.

Also, next week Forum senior researcher Ryan Horton will present findings from our recent analysis of City of Milwaukee economic development efforts. The presentation and following discussion will be held on April 10th at the University of Wisconsin - Milwaukee School of Architecture and Urban Planning (SARUP) building in Room 345 from Noon - 1:30 pm.

The lecture is part of SARUP's Smart Growth Lecture Series. The Spring 2007 theme for the lecture series is Hidden Assets: Building Community Wealth.

Click here for more details on the April 10th economic development presentation.

Monday, April 2, 2007

Big in Japan

According to a recent The Wall Street Journal (WSJ) article, there are 92 skyscrapers under construction in Tokyo, Japan. Even at this pace of construction, it is reported that the supply of office space in Tokyo will not keep up with demand due to years of robust expansion in Japan's service sector.

With Milwaukee's downtown office vacancy rate hovering around a dismal 15%, it might be time to look to Japan for a quick lesson in downtown development.

The catalyst in Tokyo's office building boom, according to the WSJ article, is Japan's shift from a manufacturing economy to a high-end service economy built on marketing and finance jobs.

Milwaukee is going through a similar economic restructuring. But a recent report by The Brookings Institution highlights Milwaukee's inability to adequately replace lost manufacturing jobs with high-value service sector jobs. In other words, don't get caught up in the hype that blames Milwaukee's economic woes on manufacturing job losses. Instead, blame our economic malaise on the region's sluggish employment growth in its service economy (see below chart by Brookings).

The story is simple: Everyone is losing manufacturing jobs (yes, even China). Some regions are transitioning. Some are not.

Sure, we could subsidize developers in hopes of spurring new downtown construction. But, if the Tokyo boom teaches us anything, finding ways to bolster a high-end services economy may be a more efficient strategy in building a postcard-worthy skyline for Milwaukee's downtown.