Friday, July 24, 2009

MPS teachers link preschool to better performance in Kindergarten

Survey results released today by the Public Policy Forum conclude that MPS Kindergarten teachers feel high quality early childhood education can have positive impacts on school readiness and academic performance. The survey is part of the Forum's three-year research project investigating the impacts of high quality early childhood education on economic development.

Of the 77 five-year-old Kindergarten (K5) teachers surveyed, nearly all (97%) feel they can generally tell early in the school year which of their students attended preschool or four-year-old Kindergarten (K4), and a similar portion (93%) feel attending preschool or K4 better prepares students for K5. All teachers feel spending time in preschool or K4 prior to starting K5 is important.

With regard to the specific skills deemed necessary for Kindergarten, teachers report that the skills that are more difficult to impact during the K5 year are the skills that students are more likely to lack upon entering Kindergarten--skills pertaining to social/emotional development and cognition/general knowledge. However, teachers feel that high quality early childhood education can help children get ready for school in these hard-to-impact skills groups and believe the effects last through K5 and beyond.

When asked about their 2008-2009 class of K5 students, 45% of the teachers surveyed report having classrooms in which at least 80% of the students had attended preschool or K4, and 54% report that at least half of their students were adequately prepared for K5. However, teachers in schools with student poverty rates above the district average are significantly less likely than teachers in lower-poverty schools to report that the majority of their students had attended preschool or were adequately prepared for Kindergarten.

The survey’s reinforcement of the connection between the quality of early childhood education and school readiness suggests that policymakers seeking to improve academic performance in MPS may wish to consider ways to increase quality early childhood opportunities for Milwaukee children. Because there appear to be links between poverty and preschool attendance and between poverty and school readiness, another area of focus may be accessibility and affordability of high quality early childhood education specifically for low-income families, as well as the quality of programs currently available and affordable to these families.

The full report is available for download here.

Thursday, July 23, 2009

PPF Pearls: Addressing Milwaukee County's transit crisis

The more things change, the more they stay the same when it comes to Milwaukee County's mass transit debate.

In the wake of Governor Doyle's veto of a Milwaukee County-only transit authority with sales tax authority, the county's struggling transit system submitted a report to the County Board last week projecting huge deficits beginning in 2011, as well as significant service cuts to bridge a smaller gap in 2010. Not coincidentally, the projected budget gaps are eerily similar to those projected by the Public Policy Forum in our May 2008 report, "Milwaukee County's Transit Crisis: How did we get here, and what do we do now?"

The updated transit budget projections cite the need for an additional $11.4 million in county property tax levy in 2011, $19.9 million in 2012 and $24 million in 2013 to maintain proposed 2010 service levels and fare structures and conduct needed bus replacement over a four-year period. Our May 2008 report projected gaps of $18 million, $24 million and $21 million in the three years following the next budget (2010-2012).

Of note is that we did not factor in the receipt of $25.6 million in federal stimulus funds for new buses nor the significant service cuts proposed for 2010, and we used a three-year bus replacement schedule. The deficits projected by transit officials would be even higher than our original projections if not for those factors.

But perhaps even more indicative of the extent to which little has changed is the following passage from our 2008 report, in which we suggest the need for a "triage" approach to stabilize the system's finances and service in the short-term:

"The underlying philosophy of this approach is that while a comprehensive, dedicated funding source appears necessary to permanently address MCTS’ structural budget problems, it is uncertain when and whether this approach will actually happen...In the meantime, the data indicate it is critical to hold the line on fare increases and service cuts for at least the next two to four years to help stabilize or even begin to grow ridership, and to take other prudent steps to reduce the magnitude of a full-fledged funding crisis when significant bus purchases are required."

In light of the significant service cuts proposed for 2010 - which include the elimination of all freeway flyer service - and the continued uncertainty of a state-authorized funding solution, policymakers may wish to re-read our discussion of the need for and components of a triage strategy that could be pursued without state legislation. There are short-term strategies that local policymakers can consider on their own, if they have the will to do so.

Wednesday, July 22, 2009

New Milwaukee effort avoids the pitfall of recreating suburbs

It is an uphill battle to revitalize downtown retail in this economy, but Milwaukee’s downtown Business Improvement District is responding by hiring Deanna Inniss to recruit retailers to the city.

One may question why her list of tasks, as reported by the Journal Sentinel, does not include the troubled Shops of Grand Avenue on Wisconsin Ave., and why she does not plan to recruit big box stores. A glance into Minneapolis’ experience with downtown retail indicates there may be sound reasons for such an approach.

The Minneapolis equivalent of the Shops of Grand Avenue is a $150 million development called Block E. Completed in 2002 with $39 million in city subsidies, the retail and entertainment complex was to revitalize a key downtown block and lure suburban shoppers to the city center. It has some features that many in Milwaukee would envy: the light rail line is just a few blocks away, and its complex contains a hotel, a 15-screen movie theater, restaurants, an arcade, and a bowling alley. It is within one block of popular downtown sporting events, a main music venue, and many nightclubs.

The debate over how to best draw people from the suburbs to spend their time and money in Milwaukee's downtown has included arguments for similar investments here: a light rail line, some brand new development with substantial city investment, and anchor stores like a movie theater and arcade. But despite having all of those things in Minneapolis, the 30% vacancy in Milwaukee’s downtown mall ends up being an exact match for the projected vacancy in Block E.

Recent coverage about Block E in the Minneapolis Star Tribune included “Downtown complex gets a C for challenged,” “’E’ may stand for ‘emptier’,” and a columnist whose opinion was summed up in the headline as, “Block E: Let’s put it out of its misery.” Crime outside Block E is an issue, its Borders bookstore closed, its nightclub closed, and major tenant Sega Gameworks just announced it will sublease its space due to declining revenue. In addition, few buildings in Minneapolis have produced such outspoken hatred regarding architectural choices. Block E’s new construction has been referred to by columnist James Lileks, who advocates a full tear-down, as a “faux-historical fa├žade … the architectural version of the elephant designed by a committee.” One online commenter called it "a suburban eyesore." The end result is that many downtown convention-goers bypass Block E in favor of taking light rail to the suburban Mall of America.

By focusing on recruiting small independent street retailers that are unique to downtown, Milwaukee's Business Improvement District may avoid some of the pitfalls experienced by Minneapolis. The more difficult question is posed in a Journal Sentinel editorial board blog post: "OK, but what to do about Grand Avenue Mall?" There appear to be no easy answers for that. Trying to create a suburban mall experience in a downtown setting has been problematic here and elsewhere; perhaps capitalizing on the diverse street-level hustle and bustle of city life could hold promise for Milwaukee’s downtown.

Tuesday, July 21, 2009

Is it time to dissolve Milwaukee County government?

With Milwaukee County Board Chairman Lee Holloway's proposal to abolish the position of county executive, and County Executive Scott Walker's counter-proposal to eliminate all of county government, policymakers and opinion leaders in Greater Milwaukee once again appear primed to discuss big changes in the structure of local government.

But will this iteration really lead to comprehensive structural change, or will it result only in minor reforms, as did the discussion following the 1996 report from Milwaukee County's 21st Century Commission, and the 2002/2003 discussion related to the county's pension scandal?

Research recently commenced by the Public Policy Forum may play a significant role in answering that question. The purpose of this research - which has been commissioned by the Greater Milwaukee Committee - is to explore the fiscal, legal and logistical issues involved with transferring the various services currently provided by county government to other entities, and the options that might exist for doing so.

Does that mean the Forum has taken a position in support of the elimination of county government and is preparing the plan for this endeavor? Absolutely not. We do believe, however, that this suggestion has received enough public attention and civic support, and that the fiscal issues facing county government are sufficiently severe, to at least merit rigorous and objective research as to whether downsizing or eliminating Milwaukee County government might be accomplished and, if so, what options exist.

The fact that rigorous research is needed should not be overlooked. While significant governance change often is seen as a panacea for difficult problems facing local governments or school districts, the experience of those who have attempted such change indicates that fiscal savings can be limited, and that the benefits associated with structural reform can take years to manifest.

In the case of Milwaukee County, the seemingly simple notion of "blowing it up" is fraught with complexity that is caused by some of the very factors that have created the county's current fiscal crisis. The county has more than $2 billion of pension and retiree "legacy" liabilities, as well as close to $500 million of outstanding general obligation debt, that don't simply disappear if the county ceases to provide certain functions. Either those costs must be distributed to the entities that take over county services - a proposition the receiving entity is unlikely to embrace - or they must remain with a shrunken county government that is even less equipped to pay for them with a reduced workforce and receding revenue streams.

The analysis we're undertaking will deconstruct the county budget, showing what the county is actually spending to deliver key services, as opposed to what is budgeted for those services because of the way the county distributes legacy costs across all departments (see our March 2009 report for more detailed description of this issue).

By isolating county retirement costs and their true impact on county services, we hope to engender an informed policy discussion about how those costs should be managed and whether alternatives might exist to prevent them from continuing to diminish the level and quality of every county service. We will then analyze and assess the fiscal and non-fiscal impacts and considerations associated with moving certain functions out of county government, and the pros and cons of various alternative government structures.

As long as the notion of dissolving county government or radically altering its structure is seen as a possibility, it will serve as a convenient excuse by some to delay meaningful action on the dozens of excruciating financial and policy decisions that face the county right now, and that have been pushed off for years. It is time to take the next step in determining whether such an approach is possible and desirable. Stay tuned for our report, which we hope to release by the end of this year.

Friday, July 17, 2009

Who's responsible for the achievement gap?

A new federal study of standardized test scores finds Wisconsin has the most persistent achievement gap in the nation between African-American and white students. This story received prominent play in the New York Times on Tuesday, but was covered with a just short article inside the local section of the Milwaukee Journal Sentinel on Wednesday.

The Times coverage quotes the head of the Education Trust, a national education advocacy group, as saying principals in Wisconsin were "stunned" to find out the results.

It sounds incredulous that Wisconsin principals weren't truly aware of the extent of the problem. But it is important to note that the findings are based on a national standardized test, the National Assessment of Educational Progress (NAEP) and not on the state standardized test, the Wisconsin Knowledge and Concepts Exam (WKCE). NAEP scores are always presented at the state level because the test is actually taken by a sample of students across the state, and not by every student in every district, as is the WKCE. So principals are probably less likely to feel the statewide NAEP results truly reflect the status of their school or district. In addition, some studies have shown that the NAEP is more rigorous than the WKCE; a score earning a grade of "proficient" on the WKCE is much lower than a proficient score on the NAEP. So principals whose students do well as defined by the WKCE might be "stunned" by lower performance on the NAEP.

At any rate, the federal study shows that Wisconsin schools are losing ground in comparison with schools in other states when it comes to narrowing the racial achievement gap. The study doesn't note which states have open enrollment programs, which allow students to choose to attend schools outside their resident districts. Might the presence of this program in Wisconsin help explain our "stunning" results?

Most of the state's African-American students attend school in districts in southeast Wisconsin, which is also where most of the students participating in open enrollment (and the smaller Chapter 220 interdistrict integration program) attend school. Consequently, in many of the region's school districts, non-resident students make up a significant portion, if not nearly all, of their minority student population. In addition, the region's scores on the WKCE, on the whole, lag behind the rest of the state's.

Open enrollment and Chapter 220 may thus have a relationship to the achievement gap if the performance of the students opting for these programs differs from that of other students. This kind of gap might not get addressed if there is a perception within a district that performance should be measured mostly by the test scores of the district's "own" students, meaning resident students, because these students are more likely to stay in the school or district throughout their schooling career and are truly products of that district. While non-resident students may in fact be less likely to spend their entire schooling career in one district, if much of a district's diversity comes from its non-resident students, how can this attitude result in anything but a racial achievement gap?

If a district is only responsible for resident students, then no one should be stunned by the pursuant gap. But it's harder to sustain this argument when it is a statewide result being analyzed. These children are all Wisconsinites. They all count when it comes time to measure up to the rest of the country.

If the scores of resident students could be compared to those of non-resident students, we could analyze the extent to which the achievement gap may or may not be due to a lack of concern about non-resident performance. But state law does not instruct districts to disaggregate the scores of open enrollment or Chapter 220 students. Some districts, of course, likely do so anyway, at least internally, which may be the basis for the perception of success with their "own" students. But there is no way of knowing, on a statewide basis, whether the children who have exercised a choice to attend a school outside their resident district are being left behind, causing Wisconsin's achievement gap to grow ever larger.

Friday, July 10, 2009

Interesting tidbits from Texas Transportation Institute Study

Television and newspaper coverage of the new Urban Mobility Report from the Texas Transportation Institute (TTI) has emphasized the $300 million annual cost of traffic congestion to Milwaukee area commuters while also acknowledging that Metro Milwaukee's traffic conditions are tame when compared to other urban areas.

A review of the full set of performance measure data yields several additional interesting tidbits and questions that may be relevant to taxpayers and elected officials as we prepare for billions of dollars of expenditures on I-94 reconstruction and expansion and a major overhaul of the Zoo Interchange, and as we continue to debate new transit options for the region. Here are a few:

  1. The mobility data - which tracks back to 1982 - indicates that while freeway congestion levels in Metro Milwaukee grew considerably from the early 1980s to mid 90s, they have leveled off since then. For example, while the average Milwaukee peak hour commuter suffered seven hours of delay per year in 1982, that number tripled to 21 in 1993. Since that time, however, it has stayed about the same, and even decreased to 18 in both 2006 and 2007. Does this finding cast doubt on the accuracy of repeated projections that traffic congestion in Metro Milwaukee would grow precipitously without major investment in added freeway capacity? Or, conversely, does it support the value of investments we have made on a new Marquette Interchange and other improvements? Does the data speak mainly to freeway congestion, which may have reached its natural limit, as opposed to congestion on parallel arterials, which may have increased instead? Also, how does this finding mesh with recent projections utilized to plan the I-94 and Zoo Interchange projects?

  2. A key indicator used by the Texas Institute is a Travel Time Index, which measures "the ratio of travel time in the peak period to travel time in free flow". Milwaukee's Travel Time Index in 2007 was 1.13, which means a trip that would take 20 minutes in free flow conditions would take 22.6 minutes on average in peak periods. Again, a look at the historical trend shows that this index leveled off in the mid 90s and is lower in 2007 than it was earlier in the decade. But what is perhaps most striking is just how low the index is. With an average two-and-a-half minute delay in peak conditions versus free flow for a 20-minute commuter, should we be surprised that highway expansion proposals often are contentious? Likewise, is the lack of intolerable traffic congestion in Metro Milwaukee perhaps the biggest reason why proposals for modern transit investments have not taken hold here as they have in other cities? Should the other benefits associated with such transit investments really be the basis for our deliberations?

  3. TTI tracks "operations strategies" utilized to manage congestion from 2000 to 2007. This data indicates significantly greater usage of three such strategies in Milwaukee: freeway ramp metering, freeway cameras, and better signal coordination on arterials. Is there a need to further explore the causal relationship between these lower cost strategies and steady congestion levels in Metro Milwaukee before we consider costlier alternatives?
There's a lot of data in TTI's report, and it certainly can be used by advocates on all sides of the transportation spectrum to make the points they wish to make. Let's also hope that in the course of our upcoming transportation deliberations, those presenting options to policymakers and citizens also make fair and objective use of it.

Tuesday, July 7, 2009

Is there an optimal rate for municipalities to use tax increment financing?

Tax incremental financing (TIF) is the most widely used economic development tool of local governments in Wisconsin. TIF uses future property tax revenue to provide up-front assistance for real estate developments. Notable projects such as Grand Avenue Mall and the recent redevelopment of Bayshore Mall relied heavily on TIF assistance. TIF plays an integral role in our region’s economic development.

While TIF use is growing throughout the state, its benefits and the extent to which communities should use TIF are still hotly debated.

The work of the Forum’s 2008-2009 Norman N. Gill fellow, John Kovari, has resulted in a research brief Too Much or Not Enough?: A Statistical Analysis of TIF in Wisconsin, which adds to the debate and takes a closer look at TIF and its economic benefits.

Specifically, the report explores the relationship between TIF and property values at the local and regional level using economic data from all Wisconsin municipalities between 1990 and 2006. Economic, statistical modeling provides an estimate of the average impact of TIF on property values in a way that might be useful for local officials in making economic development decisions.

The report’s key findings:

* TIF Growth. TIF utilization in Wisconsin municipalities has grown considerably (400%) since 1990, especially in the southern and central areas of the state. More than one quarter of the municipalities using TIF are now over the statutory TIF value limit.

* Who Uses TIF? Medium-sized municipalities (under 50,000 residents) and those with growing property tax bases are using TIF more often than those with lower rates of property value growth, including Wisconsin’s biggest cities. Although TIF was originally intended to spur economic development in struggling areas, TIF is being used more frequently by communities that are experiencing economic growth.

* TIF Benefits. TIF has the potential to be a useful economic development tool for villages and cities in redeveloping “blighted” properties and raising property values. On average, for every $1 increase of TIF value, total property value is estimated to increase by $6.

* Differences Across Communities. Differences in TIF use exist between Wisconsin’s largest metropolitan cities and outlying municipalities. On average, outlying localities are at risk of over-utilizing TIF. Statistical modeling estimates that if the average Wisconsin suburb were to increase its TIF amount by 10% (keeping all other factors constant), then its total property value would likely decrease by 0.2%. Meanwhile, Wisconsin’s largest cities appear to under-utilize TIF: the model indicates that a 10% increase in TIF value would likely increase property values by 2%.

* Regional TIF Effects. Within Wisconsin’s metropolitan regions, greater TIF investment in suburban communities may impair property value growth in the corresponding central city (i.e. Wisconsin’s largest cities). According to the model, a 10% increase in suburban increment value would likely result in an estimated 1.1% decrease in central city property value.

Overall, using historical data to model estimated TIF impacts suggests that excessive TIF use has the potential to negatively impact the economies of individual communities as well as Wisconsin’s largest cities. In other words, excessive TIF use (especially in outlying municipalities) may potentially create a scenario in which property value growth in the state is impaired.

At the same time, TIF can be a successful tool in redeveloping areas in Wisconsin’s largest cities. The model suggests that these cities (those over 50,000 residents) have not utilized TIF at the ideal rate to maximize property values.

Local and state officials are encouraged to look at TIF in a way that asks whether their communities are using TIF “Too Much or Not Enough.”

Special thanks to the Gill family for their generous support of this project through the Norman N. Gill Fellowship.