Wednesday, August 26, 2009

Who says MPS needs more accountability?

The MPS school board will soon be considering a controversial recommendation from a special committee created to increase fiscal accountability within MPS. The committee's recommendation is to create a new Office of Accountability that reports directly to the school board and to move some functions that were formerly performed by administrative departments to the new office. In effect, the recommendations put direct oversight of certain fiscal procedures in the hands of the school board.

Some would say, as the policy body of the school district, board members are micromanaging by seeking to have these types of functions report directly to them, rather than to the superintendent. In addition, there's an argument that since the superintendent is hired and supervised by the board, they already have the oversight they need.

On the other hand, it can be argued that by putting all fiscal oversight directly with the board, the superintendent and his administrators are freed up to focus on educational improvement. It could even be argued that this is a return to the decades when MPS functioned with a superintendent to oversee education and pedagogy and a business manager to oversee the day-to-day management of a large organization employing thousands of people.

I was a member of the special committee, which was created at the June 4, budget adoption meeting when the board approved the following budget amendment :

Establish an Office of Accountability under the Office of Board Governance. The Board authorizes the Board President to convene a committee of a least five members to establish the description and organizational structure of the Office of Accountability. The Office of Accountability is to become effective on January 1, 2010. Allocate $150,000 for start-up of the Office of Accountability.

My role on the committee was to inform my fellow committee members of the best practices for accountability in local government. Unfortunately, Milwaukee's largest local governments aren't always practitioners of these best practices. Those that the Forum has identified and that we emphasize should be in place in every local government, from Vliet Street to the county courthouse to the village hall, include:

  • Independent certification of revenues, so that a budget can be crafted based on a common set of revenue assumptions

  • Clear and transparent evaluation of long-term effects on solvency of short-term fiscal and policy decisions

  • Timely and regularly reporting fiscal data and projections to the public in easily understood terms
I urged the special committee to include these principals in their recommendations, and I believe it has done so. That doesn't mean the Forum or I advocate on behalf of the specific proposal before the school board, as the research is mixed regarding what type of district administration model results in higher student performance. Split responsibilities are quite common, but are not necessarily linked to better student achievement. This lack of conclusive data makes it difficult for a non-partisan organization to take a stand.

Where we do stand, however, is in our insistence that the board, the superintendent, the mayor, the governor, and anyone else who has or may take responsibility for the fiscal condition of MPS adhere to the principles listed above. Accountability is a word thrown around all too often in local government, particularly in school districts. It can only truly be achieved if the public can understand and participate in current debates that have long-lasting implications.

Friday, August 21, 2009

NYC inspired by Milwaukee

The new transportation hub at the World Trade Center, designed by Santiago Calatrava, has risen from the pit of ground zero and looks to be a near twin of the Milwaukee Art Museum.

The building is slated to open in 2012. Cost overruns and a slow construction pace are making the project controversial in New York. At a total cost of $3.2 billion, it's no wonder the public is wondering where its money is going.

Milwaukee seems to have received more bang for its buck from its Calatrava, which compared to the New York building seems like a bargain at about $125 million. Both buildings have the same spiny exterior profile in vivid white and an oval great hall, but the New York version will not be able to flap its wings. In New York, Calatrava originally seemed intent on improving his Milwaukee design by making wings that could open to allow in fresh air over the train platforms. But due to security needs (in response to terrorist attacks on train stations in Madrid and London) the building will have shorter ribs that will remain stationary.

Most of the enormous price tag of the New York building is due to the extensive underground construction necessary to accommodate four PATH-train platforms, 500,000 square feet of retail, and pedestrian tunnels to other ground zero buildings, the subway station, and up to the street. The budget was also increased significantly to improve the building's security.

Milwaukee's Calatrava has become the iconic symbol of our city, giving us an identity that many might argue was well worth the price. New York seems unlikely to get that mileage from its $3.2 billion. Being at ground zero, the building will certainly be seen as a symbol of rebirth and renewal. But there will be other more powerfully symbolic buildings there, too, including the new World Trade Center itself, designed by another superstar architect, Daniel Liebskind, and the 9/11 memorial. New York City, home of the Empire State Building, Statue of Liberty, and the Chrysler Building, isn't exactly in want of an architectural icon, and a train station seems unlikely to unseat any of those buildings from their positions of prominence.

But I can't help but wonder if anyone in New York City would notice if Milwaukee sent an invoice for a finder's fee?

Wednesday, August 19, 2009

PPF Pearls: Mayoral takeover of schools

Last winter, at the behest of the Greater Milwaukee Foundation, the Forum conducted an analysis of other urban school districts that had undergone governance reform such as state or mayoral takeovers. Our findings are pretty much summed up by the subtitle of the report: The Devil is in the Details. It's becoming tedious to say, but we found, again, that there are no silver bullets in education reform.

At the time our report was released, neither the mayor nor the governor had explicitly said a mayoral takeover was on the table, but that has changed now, perhaps largely because the U.S. Department of Education has made clear that this kind of governance reform can be rewarded with federal "Race to the Top" funds.

These federal funds being dangled in front of our leaders are not a sure thing, however. As part of the Race to the Top grant program, they would be competitive funds, awarded to the state only if certain criteria are met. These criteria are still in draft form, but include the state (and the district) making "assurances" that steps are being taken in four areas to improve student outcomes. The four areas include:

  • Standards and assessments--adopting common standards and implementing common, high-quality assessments

  • Data systems to support instruction--implementing a statewide longitudinal data system that is accessible to parents and other stakeholders and using data to improve instruction

  • Improving teachers and leaders--providing alternative pathways to teaching and school leadership, measuring and rewarding teacher performance, ensuring the most effective teachers and principals are equitably distributed across schools, and measuring and reporting the effectiveness of teacher preparation programs

  • Turning around struggling schools--intervening in the lowest-performing schools and districts, increasing the supply of high-quality charter schools, and turning around struggling schools.
In addition, a specific draft criterion would require the state to demonstrate that education is a funding priority by not cutting K-12 aid from 2008 levels. Other factors to be considered are the support of the teachers unions and the state's progress toward closing the racial achievement gap.

For Wisconsin and Milwaukee, meeting many of these criteria may be a stretch. Maintaining K-12 aid has been difficult in the past several budget cycles, even prior to the recession and the loss of state income tax revenue. The racial achievement gap in Wisconsin is among the worst in the nation and is not narrowing here as it is in other states. The strong teachers union has voiced opposition in the past to many of the items to be "assured," most notably the idea of tying teacher pay to student performance.

In addition, before the mayor gets a chance to try his hand at running the school district, the legislature will have to make certain statutory changes.

In the meantime, the school board will be debating significant structural changes within the district's administration and recruiting a new superintendent. Could all these forces come together in a federally-funded "perfect storm" that raises student achievement in Milwaukee? The chance seems remote, but you may want to keep an umbrella close at hand, just in case.

Friday, August 7, 2009

Slow growth in property values could mean higher tax rates

After several successive years of property tax rate decreases and a slight increase in 2008, gross property tax rates in Southeastern Wisconsin increased 2.8% in 2009, according to the Public Policy Forum’s latest report on property taxes and values, which can be accessed here. A pull-out poster listing property values and tax rates for individual municipalities can be accessed here.

Not surprisingly, the increase in property tax rates coincides with slowing growth in property values in the region. After enjoying robust property value growth for the past several years, municipalities and counties saw a significant slowdown in 2008. Property values for 2009 are due to be released later this month.

The fact that property tax rates in the region already have begun to increase as the growth in property values simply has slowed does not bode well for 2010 budgets. Considering the high likelihood that property values in the region will decline in many Southeastern Wisconsin counties and municipalities in 2009, this finding illustrates the difficult challenge faced by local officials in controlling property tax rates, particularly when other negative factors produced by the economic downturn are factored into the equation.

The following are additional findings from our analysis of property taxes and values in Southeastern Wisconsin:

  • Growth in property values in Southeastern Wisconsin has slowed dramatically, even prior to the onset of the economic downturn. The total equalized property value for Southeastern Wisconsin increased 2.2% from 2007 to 2008, the smallest increase in a decade. Meanwhile, 28 municipalities in Southeastern Wisconsin had a decrease in their total value from 2007 to 2008. In 2007, only three municipalities had a decrease, and in 2006 only one municipality lost value.

  • The impact of this reduced growth on property tax rates has been significant. The gross tax rate for southeastern Wisconsin was $19.34 per $1,000 of property value in 2009, an increase of $0.53 over the 2008 rate of $18.81. This was the second year in row with an increase, though the 2008 increase was only $0.03, and was largely attributable to a significant increase in Milwaukee County. The region experienced a $1.11 decrease in 2007 and annual decreases in each additional prior year going back to at least 2001.

  • In 2008, the average residential equalized value in the region increased only 0.9%. This reduced growth rate contributed to higher property tax rates in each county in 2009. The gross tax rate for Southeastern Wisconsin increased 2.8% in 2009, and the gross tax bill increased 3.8%. Put another way, the average property taxpayer in Southeastern Wisconsin is beginning to see his or her tax bill and rate increase steadily despite significantly reduced growth in the value of his or her property.

  • To illustrate the potential 2010 impact of stagnant property values on property taxpayers, we developed projections for property tax rates in each Southeastern Wisconsin county assuming that 2009 equalized values will stay the same, and that the property tax levy in each county increases based on five-year averages. Our projections indicate that for the region as a whole, the gross tax rate would increase $0.92, which would amount to a $219 property tax increase for the average residential property in Southeastern Wisconsin.

By analyzing the strong linkage between property values and property tax rates, our report highlights the severe challenges that local elected officials will face in developing 2010 budgets that minimize property tax rate increases while providing the necessary resources to maintain existing levels of government services.

In a separate assessment of the fiscal condition of Milwaukee County government, and a similar soon-to-be-released analysis of the fiscal condition of the city of Milwaukee government, we note the problematic nature of over-reliance on one or two significant sources of revenue. This report amplifies that issue, and suggests the need for renewed debate and discussion regarding revenue diversification for counties, municipalities and school districts in Southeastern Wisconsin.