Friday, June 29, 2007

Healthy Wisconsin Plan

If State Senate Democrats were looking to spark further debate about health care in Wisconsin, then their proposal and passage of the Healthy Wisconsin Plan, which is estimated to cost $15.2 billion in its first year, has accomplished that goal. However, mixed reactions to the plan from elected officials and the business community may show the need for more debate and discussion than occurred in the two days between release of the full plan and the Senate’s final vote. A previous Public Policy Forum post notes that budgets are often used by Wisconsin legislators to create substantive policy change. Such changes are rarely given their own public hearings and the quality and extent of the debate surrounding the issues suffers.

A study sponsored by the AARP and conducted by the Lewin Group projects the possible costs for government and employers. The study projects that health care costs for all employers will decrease under the Healthy Wisconsin Plan, regardless of whether they currently contribute to insurance for their workers. This decrease is seen for all employers because the Lewin Group assumes that wages will go down to compensate for the increased payroll tax under the Healthy Wisconsin Plan. There is some debate as to whether the plan will attract businesses to Wisconsin or drive existing businesses away.

Now the Republican controlled Assembly will develop its own version of the budget bill. The Assembly Republicans have publicly stated that they will take the universal health plan out of the Assembly version of the budget. While Senate Democrats did not leave much time for examination and debate of their Healthy Wisconsin Plan, the Assembly has the opportunity to take time to sincerely discuss the plan before deleting it from the budget. As we noted after our Viewpoint Luncheon in May, the debate surrounding health care reform must include not only policy, but also health care outcomes and practices. A more balanced debate would include these factors along with the cost considerations that have been the focus thus far.

Tuesday, June 26, 2007

Add another element to your comprehensive plan

The American Planning Association's June issue of Planning magazine includes an article about child care as an element of a community's infrastructure. The article, "Putting Child Care in the Picture," includes this quote:
When Hurricane Katrina hit the Gulf Coast of Mississippi in August 2005, Chevron executives moved quickly to restart the Pascagoula refinery and get gas flowing again. They also took stock of other types of infrastructure, including an often overlooked one: child care.

"After the hurricane, I understood how little I knew about how interconnected everything was, how everything could disappear overnight," says Steve Renfroe, a member of Chevron's leadership team. "A disaster of the magnitude of Katrina has the power to stop the economy, but how do you restart it? We used portable electric generators to generate the fuel we needed to restart the refineries. Child care is like that generator. It enables parents to go back to work — a key factor in getting the rest of the economy back up and running."
The article goes on to mention several policy options planners can use to accommodate the need for child care, from zoning exemptions to impact fees on developers. Including child care facilities when planning new transit stations is also mentioned.

As for Chevron, the company partnered with Mississippi State University to leverage $500,000 in Chevron seed money to raise an additional $1.5 million to rebuild and resupply 40 child care centers in Jackson, County, Mississippi.

Thursday, June 21, 2007

TIF: A primer

Recently, there was an article in the Milwaukee Journal Sentinel which reported questions being raised about a public assistance package for a proposed downtown hotel in Waukesha. In the article, the proposed Tax Increment Financing (TIF) package for the Clarke Hotel and Black Trumpet restaurant was called into question by a member of the Waukesha's Joint Review Board (JRB).

TIF projects can only be approved if signed off by all the effected underlying governments in the form of a JRB. In fact, a municipality's JRB has the power of final approval of every TIF request in the State of Wisconsin. For example, the following is an explanation of the JRB's role in the City of Milwaukee's TIF approval process (see Milwaukee's TIF page for more details).

In the City of Milwaukee, a TIF project plan must be approved by several bodies. First, the project receives a hearing before the Joint Review Board, which is made up of five (5) representatives – one each from the City of Milwaukee, Milwaukee County, Milwaukee Public Schools (MPS), and the Milwaukee Technical School System – and a citizen representative. After an initial hearing before the Joint Review Board, the Redevelopment Authority of the City of Milwaukee (RACM) holds a public hearing on the TIF project and votes on the project. After RACM action, the Milwaukee Common Council’s Zoning & Neighborhood Development (ZND) Committee holds a hearing on the TIF project. Once adopted by the ZND Committee, the project is either approved or rejected by the full Common Council. Upon adoption by the Common Council, the Joint Review Board makes a final recommendation on the project and it is forwarded to the Mayor for his ultimate approval.
It is doubtful that a JRB meeting in the City of Milwaukee or elsewhere attracts regular public participation. In the absence of direct public scrutiny, it is up to the five members of the municipality's JRB to provide adequate oversight. Again, using the City of Milwaukee as an example, the members of the JRB are:

Mark Nicolini, City of Milwaukee
Robert Dennik, Milwaukee County
Michael Sargent, Milwaukee Area Technical College
Ron Vavric, Milwaukee Public Schools
Kathryn West, Citizen Member

According to the State of Wisconsin's JRB guidelines, JRBs in Wisconsin can "hold additional public hearings as part of their deliberation." If you have any concerns over a proposed TIF in your community, please note your municipality's TIF approval process, its JRB members, and when JRB meetings are scheduled to occur. It reasons that the more transparent and accountable the TIF approval process, the stronger the resulting TIF district.

Tuesday, June 19, 2007

Playground politics

What's the hottest new component of neighborhood development? Playground design. As childhood obesity grows and schools devote less time to recess, the importance of good playground design garners more attention. Last week's Newsweek highlights innovative public playgrounds across the country. Note that of the five highlighted, at least four were fully or partially funded with private donations.

This month's Governing magazine provides insight into why publicly funded playgrounds tend to be "home to dull, pre-fab plastic equipment." Local politics. Local governments are risk-adverse when it comes to liability, maintenance, and cost. Quotes the Governing article:

"I don't see a lot of change in parks departments unless there's somebody at the local level who really wants to agitate for it," says Susan Solomon, author of American Playgrounds. "They won't say we need to make massive change because everybody is so afraid of liability."
A one-acre playground in New York City to be designed by architect Frank Gehry will include vegetal walls and cost $4 million, which will be raised by a private group. Another new playground in New York City, designed by the Rockwell Group, includes "a selection of blocks, buckets, shovels and the like that lets youngsters build something, tear it down and start all over again." It's unclear from news reports whether the city will own and/or maintain these playgrounds--a key determinate of liability.

Southeast Wisconsin has seen some of the private funding phenomenon. The Friends of Bradford Beach formed in 2005 to raise money for a playground and water garden at Bradford Beach. Their goal is to raise $500,000. Racine's North Beach boasts a 20,000-square-foot sunken "pirate ship" for climbing and imaginative play. The $270,000 cost was raised privately from residents and businesses. Without private donations local parks officials tend to play it safe: a Forum survey of all Milwaukee County parks in 2002 found most park playgrounds, while newer, had few distinguishing features. There are pockets of innovation, like the Gordon Park splash pad, which show that local officials aren't immune to kids' needs and can move away from cookie cutter design without increasing risk unacceptably.

The appropriateness of raising private funds to initiate innovative recreation opportunities has been debated over the past week after the announcement of a $4 million challenge grant to renovate the Hoyt Park pool in Wauwatosa. Many are classifying the donation as a win-win, with County Executive Walker stating that private donations for the Hoyt Park pool will allow county funds to be used for other pools. The Journal Sentinel article states that the Friends of Hoyt Park and Pool organization is proposing to building and operate the pool under a lease with the county, similar to the relationship between the county and the Urban Ecology Center in Riverside Park. A key element in the county's support seems to be the Friends' group's recognition of the need to fundraise for operating expenses as well as capital expenses. According to the WauwatosaNOW website, Friends of Hoyt Park President Denise Lindberg estimates the construction costs at $6 million. but also

plan[s] to have two $1 million endowments set aside - one to cover operational needs to ensure that all things that need to be fixed will be fixed during those first few years of operation and another to make sure there are adequate funds on hand for security and safety needs.

If the Hoyt Park pool model succeeds, expect future public playgrounds to be built and operated privately as well. From all reports, this is a practice gaining favor across the country as policymakers eschew innovative, high-risk recreational developments in the midst of tight budgets.

UPDATE: Supporters of another county pool announce a fundraising effort: Hales Corner Pool

Wednesday, June 13, 2007

Transition and momentum at the Forum

An item in the Journal Sentinel this morning noted the Public Policy Forum is in the market for a new president. That's because I notified the Forum's Board of Trustees that I will be stepping down as president early next year. I wanted the board to have time to make this a smooth transition. The board has formed a transition committee headed by Bill Haberman, the board chairman. The board and its committee will identify my successor over the next few months.

As for me, I intend to stay active in the Forum and do what I can to help honor the Forum's 94-year civic tradition of non-partisan policy analysis. I also want to help keep up the momentum we started a few years ago -- concentrating on regional competitiveness, workforce development, race relations, environmental concerns (especially water resource management) and other public policy issues that are central to southeastern Wisconsin's future.

What the Journal Sentinel's online story mentioned, but the printed version didn't, is the reason for my decision to make this transition. Last month, I led a delegation of 18 Milwaukeeans to Hanoi, Vietnam, to explore the possibilities for cultural, humanitarian and business relationships between Milwaukee and Hanoi. It was what you might call a life-changing adventure for me, and starting next year I intend to focus much of my energy on building those relationships -- and at the same time helping connect my adopted 6-year-old Vietnamese sons to their native culture.

Tuesday, June 12, 2007

The graying suburbs will need help

A new report from the Brookings Institution finds, in a reversal of trends, that large urban cores will have fewer seniors than the suburbs as the baby boomer generation "ages in place." The suburbs are aging faster than cities and, in most parts of the country, the source of the increase is not migrating retirees, but current residents.

According to the New York Times, "From 2000 to 2010, the population in [the 55- to 64-year old] age group is projected to rise across the board, ranging from an increase of 80 percent in Arizona to a still robust 33 percent increase in New York." The Brookings report notes that around cities on the coasts, such as New York and Los Angeles, the suburban populations already have higher percentages of seniors and will only continue to grow. In the Midwest and central Northeast, the balance will swing to the suburbs over the next decade or so, ranging from 2010 in Philadelphia to 2020 in Chicago.

Concludes the report:

Slow-growing metropolitan areas in the Northeast and Midwest will age as well, but more likely will be comprised disproportionately of “mature seniors” who are less well-off financially or health-wise. These populations may require greater social support, along with affordable private and institutional housing, and accessible health care providers. To the extent those resources are currently more focused on central cities, suburbs may need to play “catch-up,” or cooperate more actively, with their urban neighbors to meet the needs of these aging-in-place populations.
The suburbs of the Milwaukee region should not consider themselves immune to this trend--the growth of people ages 55+ in the metro area was 9.9% between 2000 and 2005, resulting in a 23% share of the total metro population (including the City of Milwaukee). Our suburbs should prepare for the impacts a more senior population will have on health care, transportation, housing, and social services. As a corollary, our region's suburban school districts must prepare for declining enrollments. Regional cooperation seems, once again, to be the prescribed antidote.

Friday, June 8, 2007

Why would MPS care about TIF?

We seldom hear of the fiscal impact that tax increment financing (TIF) districts have on the budgets of governments other than municipal government. For example, how does the passage of a TIF district in the City of Milwaukee affect the budget of Milwaukee Public Schools (MPS)? Given the recent budget troubles at MPS, the use of TIF by the City of Milwaukee may become an increasingly important issue for the school board. In Kansas City, the fiscal impact of TIF usage on the local public school system currently is being scrutinized.

Why would MPS care about TIF? Tax base. After all, TIF captures tax base and sets it aside to pay for public improvements within a special district: Park East, Pabst Brewery, Third Ward, etc. Until the given TIF district has fully paid down its debt, the tax base growth in the district is not available for a governmental entity like MPS to tap. It takes an average of 13 years to pay down debt and close a TIF district in Wisconsin. That's a long time, but if the growth would not have otherwise occurred it's worth the wait.

If MPS can argue that the growth in a proposed district would occur without the TIF or that the proposed TIF is speculative and unlikely to be successful then it might be able to block a TIF. In Wisconsin, TIF projects only can only be approved if all affected governments agree to passage during a Joint Review Board (JRB) hearing.

The process in Milwaukee is as follows. First, the project receives a hearing before the JRB, which is made up of five (5) representatives – one each from the city, Milwaukee County, MPS, the Milwaukee Area Technical School (MATC), and a citizen representative. After an initial hearing, the Redevelopment Authority of the City of Milwaukee holds a public hearing and then votes on the project. Following that, the Milwaukee Common Council’s Zoning & Neighborhood Development (ZND) Committee holds a hearing. Once adopted by the ZND, the project is sent to the full Common Council for approval or rejection. If the council approves it, the JRB makes a final recommendation and it is then forwarded to the mayor for final approval.

As MPS and other governmental entities face structural deficits, TIF use (or non-use for that matter) in the City of Milwaukee may become a flash point of controversy.

Wednesday, June 6, 2007

Transit dollars: Spend now, pay later?

For several years, $91.5 million in federal aid has been sitting around waiting to be spent on a new mass transit plan for the Milwaukee area. This pool of money has received a lot of publicity lately, some of it from people who find it appalling that Milwaukee has sat on this “free money” for so long without spending it. However, there are strings attached to this “free money” and one of those strings is key: the $91.5 million can only be used for capital expenses. So, in other words, the infrastructure can be built and vehicles bought for whatever transit plan is adopted (with a local match, by the way), but it is up to the local government to fund the new system’s operation. That’s a substantial local expense to take on for the sole reason of using “free money” from the feds.

Intergovernmental revenue is always unreliable. One example is the extensive use of the federal Community Oriented Policing Services (COPS) grants by the Milwaukee Police Department (MPD) during the 90s. MPD used the money to hire more police officers—why wouldn’t they use it for that? It was free money. The city paid the price, however, when the grant money dried up. Milwaukee didn’t want to lose officers, so the city picked up the expense. Now, several years later, the city is lobbying the federal government for a reprisal of the COPS grants in order to again add more police officers.

The most fiscally responsible way to use intergovernmental revenue is for one-time projects. Relying on unreliable money for ongoing expenses leaves a local government financially vulnerable. It would make sense to use the federal transit money for the capital expenses of the construction of a new transit system only if the local government had decided that it was something it would pay to operate anyway.

Obviously, that isn't the case here in Milwaukee because both Mayor Barrett's transit plan and County Executive Walker's transit plan lack detailed operating budgets. The history of attempts to craft a transit plan for Milwaukee indicates our leaders are trying simply to spend available money rather than fund identified and existing capital needs.

Tuesday, June 5, 2007

"Salute to Local Government "

Make plans to attend the Forum’s 15th annual “Salute to Local Government.” See how innovation among local governments can result in the efficient implementation of services and use of tax dollars. It’s the only event (that we’re aware of) in southeastern Wisconsin (and Wisconsin) that honors local government.

Event details are as follows:

Wednesday, June 20 ~ 7:30 a.m. - 9 a.m.
Doors open at 7 a.m. ~ Breakfast buffet at 7:15 a.m.

Italian Community Center
Grand Ballroom
631 East Chicago Street
Historic Third Ward

Click here to reserve your spot.
Click here to see this year's award winners!

Friday, June 1, 2007

Letter from Siberia to the M7

I recently read an intriguing article in the "World in 2007" issue of The Economist magazine. In a full-page letter, Mikhail Khodorkovsky, a former Russian oil tycoon serving a nine-year jail sentence for fraud and tax evasion, gave his thoughts on how he sees the world taking shape in 2007.

He introduced the strategy of "reindustrialization" as a way for more mature economies (e.g., Milwaukee) to exploit their competitive advantages over developing countries (e.g., China) through energy-efficient manufacturing. Khodorkovsky predicted that while labor might be cheaper in China, the west's energy-efficiency advantage in production will be an increasingly important asset during prolonged periods of rising energy prices.

It's almost as if the Milwaukee 7 (M7) had read this letter from Siberia. This week, the M7 released its initial Strategic Framework to grow the region's economy. The first step will attempt to bolster smaller scale, research intensive, "next generation" manufacturing production facilities in the region. In an age when economic development experts fall all over themselves to talk about bio-tech, nanotechnology, and bioinformatics, this certainly seems to be a contrarian move by M7. In fact, just two weeks ago when I presented on a panel of such economic development experts, Richard Longworth (an author from Chicago) spoke of globalization and how pursuing manufacturing was largely a failed strategy for rust-belt economies.

But according to Prof. Ned Hill of Cleveland State University, such a contrarian strategy may have its merits. Hill is popular for saying: "Don't be a rube; think for yourself—Economies are not built through jealousy or envy."

The M7 acknowledges that pursing such a reindustrialization policy is a "most risk - greatest opportunity" strategy. After all, our manufacturing sector has stumbled in recent years. Just released are state rankings on value-added manufacturing from the US Census Bureau and compiled by the State Science and Technology Institute. The rankings place Wisconsin's growth between 2001 and 2005 below national averages in all three categories of competitiveness. For example, Wisconsin was 33rd in growth of value of manufacturing shipments (14% growth in Wisconsin compared to 19% for the US), and 42nd in the growth in the average value added per employee (29% growth in Wisconsin vs. 43% in the US). These indicators show the state heading in the opposite direction relative to the rest of the country when it comes to high-end manufacturing productivity growth.

So we have our work cut out for us. But the M7's reindustrialization plan may be just the catalyst for such a turnaround. At least the region is showing signs of thinking for itself and bucking the herd mentality that is so prevalent among economic development experts.