Thursday, September 24, 2009

Revisiting the Missouri approach to juvenile corrections

In a blog post published in March 2008, we cited an innovative juvenile corrections model used by the state of Missouri and asked whether that might represent a cheaper, better approach for Wisconsin.

Eighteen months later, the Missouri model is attracting increased national attention. ABC News recently ran a feature on the model, which utilizes small community-based residential facilities featuring intensive treatment as an alternative to large correctional institutions. This approach, according to the report, "has chalked up results that have corrections experts across the country taking notice."

Policymakers in Wisconsin also are taking notice. In April 2008, the Legislature's Joint Legislative Council established a Special Committee on High-Risk Juvenile Offenders to examine best practices to reduce recidivism among high-risk offenders. In April of this year, the committee produced a report outlining its proceedings and describing several bills recommended as a result of its deliberations.

The committee took a look at the Missouri model and considered draft legislation to pilot two or three Missouri-like facilities. The legislation did not make it into the committee's final recommendations, however, perhaps in part because of a memorandum prepared by the Department of Corrections showing that the Missouri daily rate for serving juveniles at its residential facilities is quite similar to the daily rate in Wisconsin juvenile corrections institutions if all related costs are considered.

Notwithstanding that finding, there may be a range of reasons to consider a more diverse service delivery model for juvenile corrections in Wisconsin. One is the potential to re-examine whether the state's institutional capacity could be reduced given the significant drop in the number of youth being sentenced to those institutions from Milwaukee County. The county averaged well in excess of 350 commitments per year in the late 1990s before seeing a precipitous drop to below 200 by 2004. After increasing in 2006-07, the commitment number is now trending downward again. This trend suggests there may be no better time to re-examine the closure of one of the state's three institutions in light of its fiscal challenges.

If the state were to consider such a move, it may need to be accompanied by additional community-based options. One such option could be a partnership with Milwaukee County to open a local residential facility based on the Missouri model. County officials have long complained about the cost of sending delinquent youth to the state facilities and may be willing to try a local alternative. Also, in light of the county's successful track record in operating alternatives programming (such as the Firearm Supervision, Wraparound Milwaukee and Focus programs), Milwaukee County could be the logical place to pilot another innovative approach.

The fiscal circumstances facing state government suggest that some new thinking is needed to cut corrections costs and reduce recidivism among the juvenile population. Whether the Missouri approach is the right one for Wisconsin requires further deliberation, but such deliberation again may be warranted in light of the successful outcomes associated with that approach.

Sunday, September 20, 2009

Perfect storm of increased need and decreased giving hits area nonprofits

This year’s Report Card on Charitable Giving is different than in past years. In every report prior to this one, we surveyed the same small bellwether group of organizations. For this year’s report, we surveyed a larger number of nonprofits in the region to get a broader picture of what local nonprofits are experiencing. We e-mailed surveys to 391 local nonprofits and received completed responses from 188 organizations for a response rate of 48 percent. Over half (51 percent) of the organizations surveyed were from the human services sector, while 18 percent were arts and culture organizations, 17 percent were education organizations, 10 percent were health organizations, and three percent were in the environment sector. Three respondents were funding organizations. Eighty percent of the 188 responding organizations service Milwaukee County.

Major findings:

  • Sixty-eight percent of organizations report that the U.S. economic downturn has caused giving to their organizations to be less generous than usual. Only seven percent feel that the downturn has caused giving to be more generous.

  • Compared to the first half of 2008, organizations report decreases in total revenue, revenue from donations, and overall staffing. However, they also report increases in actual fundraising efforts.

  • Most organizations say they have had to cut costs due to budget constraints (83 percent). Forty-three percent have frozen salaries, 29 percent have frozen new hires, 24 percent have laid off staff and reduced benefits, 13 percent have reduced salaries, and nine percent have eliminated benefits.

  • Of the organizations that offer direct services to clients, 62 percent report the demand for their services is increasing, while seven percent report the demand is decreasing. Furthermore, 43 percent of these organizations say that the charitable donations designated to meet the demand for these services are decreasing, while 14 percent say they are increasing.

  • Even in these hard times, 44 percent of organizations feel very confident that they can meet the demand for services in 2009 and 45 percent feel somewhat confident. Furthermore, 26 percent of organizations anticipate that the likelihood of their organization’s long-term sustainability is very high, 33 percent report a high likelihood of sustainability, and 34 percent a moderate likelihood.

The report was commissioned by the Greater Milwaukee Foundation with sponsorships from Donors Forum of Wisconsin, The Faye McBeath Foundation and United Way of Greater Milwaukee.

Friday, September 18, 2009

One-time revenues are hilarious

Here at the Forum, we've been cautioning local governments for years about making budgeting decisions that help balance the current budget but contribute to deficits in future years. We just didn't see much humor in these types of desperate budget tricks.

Leave it to Jon Stewart and The Daily Show to prove how funny one-time revenues can be. On Tuesday night's show they skewered a proposal in Arizona to sell and lease back their capitol building. The building (which has no real historic value, as it was built in the 1960s to replace the original capitol) and several other properties would be sold for over $700 million and then leased back at an annual cost of $60 million over the next 20 years. At that time the ownership of the buildings would revert to the state. In the meantime, the state would maintain responsibility for upkeep and repairs. As far-fetched as it sounds, Arizona's governor signed a bill in early September clearing the way for the sale.

As The Daily Show comedians pointed out--it's a great deal for the buyer, who would nearly double his investment in just twenty years, but what does the state get out of it except an extra $700 million in the current budget? Unlike the lease of a government asset designed to bring in annual revenue over the long term (such as privatizing Milwaukee's airport or water works), this proposed "sale" is actually functioning as a collateral loan.

While the extra cash for operating expenses is a windfall now, what about the $60 million in rent Arizona would be paying next year? Even a fake journalist asks the tough questions: Wouldn't that just make next year's budget even tougher? And the 19 years after that? And would the private owner require more in maintenance and upkeep than the state would otherwise have spent?

The response? A blank stare from an Arizona state legislator. She just didn't get the joke, I guess.

Wednesday, September 16, 2009

Will economic crisis breed government innovation?

The Forum's recently released report on the City of Milwaukee's fiscal condition includes a small section discussing how other cities are grappling with their recession-induced fiscal challenges.

We essentially found two camps: those looking to "ride out the storm" by implementing one-time savings opportunties (e.g. employee furloughs) and tapping into reserves with the expectation that revenues would rebound once the economy recovers; and those who were convinced their challenges were structural in nature and would dissipate only slightly in a recovering economy, and who therefore sought long-lasting budget solutions.

A cursory review of newspaper headlines in the past couple of days yields additional insights from three different parts of the country, all distinct yet all with potential relevance to local governments and school districts in southeastern Wisconsin.

  • In Phoenix, which recently cut 1,000 positions to bridge a $270 million gap in its budget that began July 1, a continued lag in sales tax revenue is forcing consideration of another round of mid-year cuts. While elected officials likely won't consider major budget fixes until early next year, city managers are getting started by asking employees to scour their own daily activities for savings. Examples include new policies on opening window shades instead of turning on lights, an intranet marketplace in which employees trade and recycle unused office supplies to avoid ordering new ones, and requirements that employees empty their own trash and recycling bins.

  • In Detroit, newly elected mayor Dave Bing is contemplating widespread privatization of services not deemed to be part of the city's "core" mission. According to the Detroit Free Press, Bing's definition of core services are public safety, water and sewerage. He says everything else will be on the table for potential outsourcing, including internal services like accounting and payroll, and direct services like trash collection and running the transit system.

  • In New Jersey, smaller towns and cities are considering consolidation of services to an extent few thought possible. Ideas such as consolidated police and fire departments, merged public health departments and joint trash collection are receiving serious consideration as a result of threatened cuts in state aids combined with state financial incentives tied to shared services.

Here in southeastern Wisconsin, we have seen some beginning rumblings of similar efforts, such as the potential moves to consolidate police services in Pewaukee and Jackson, and a Milwaukee alderman's request to city workers to identify savings opportunities. We also have seen some interesting new approaches to labor relations, such as West Allis' proposed deal with employee unions to tie pay increases to the city's overall revenue picture.

It is commonly said that crisis breeds opportunities for positive and innovative reform. As county, municipal and school district leaders get set to unveil budgets in the next few weeks, it will be fascinating to observe whether government ingenuity and innovation emerge as a silver lining of our long and painful economic downturn.

Tuesday, September 15, 2009

Racial achievement gap in SE Wisconsin not shrinking

The Forum's latest research on K-12 education finds the region’s racial achievement gap on state reading and math tests has remained virtually constant over the past five years, as has the statewide achievement gap.

As previously noted on this blog, on the national NAEP test Wisconsin is the only state to have a growing achievement gap. That the state and the region are also unable to shrink the gap on state tests reflects a persistent pattern.

The new report indicates, for example, that 85.8% of the region’s white 4th grade students performed at a proficient or advanced level in reading during the 2004-05 school year, compared to 58.8% of African-American 4th graders. Five years later, more (89.4%) of the region’s white 8th graders were proficient or advanced in reading, while African-American reading proficiency remained at 58.8%.

Similarly, the region’s math achievement gap over the past five years grew slightly, although both white and African-American math proficiency improved during that time. The statewide reading and math achievement gaps also grew slightly from 2004-05.

While most of the region's African-American students are enrolled in the Milwaukee, Racine, and Kenosha school districts, the gaps in those districts are not as wide as in some others in the region. However, the smaller gaps in these three urban districts are due to the lower scores of the white students in those districts, rather than higher African-American scores.

The Forum’s schooling report was funded by Cardinal Stritch University, Multiple Listing Service, Northwestern Mutual, Southeastern Wisconsin Schools Alliance, Stifel Nicolaus, and the Waukesha County Technical College. A copy can be downloaded at the Forum’s web site,

Tuesday, September 1, 2009

City of Milwaukee finances: between a rock and a hard place

Milwaukee's mayor has labeled the city's 2010 budget "by far the most difficult" he has faced in 25 years of public service, while the majority of its common council already has supported a proposal for sharply higher user fees. Meanwhile, the independently elected comptroller has proposed exploring a politically volatile lease of the city's water utility as a strategy for addressing the city's worsening fiscal challenges.

So how bad is the city's fiscal condition? Are its challenges solely the byproduct of economic recession, or do they reflect a more fundamental structural imbalance that has been building over time? Can they be met with short-term solutions designed to “ride out the storm” until the economy recovers, or do they require radical fiscal and programmatic change?
Those are the questions the Public Policy Forum seeks to answer in its latest report: "City of Milwaukee's Fiscal Condition: Between a Rock and a Hard Place", which can be accessed by clicking here.

Using the same respected fiscal monitoring system employed for a similar report on Milwaukee County government earlier this year, we examine fiscal trends, compare Milwaukee with similar-sized cities, analyze the root cause of problems and discuss potential solutions.

What we find is a city government on the precipice of serious fiscal and programmatic disorder. While still maintaining outstanding bond ratings, a comparatively well-funded pension system and healthy reserves, the city's revenue streams have exhausted their capacity to support its expenditure needs. We also find that this reality is not solely the consequence of economic recession, but one that has been building for more than a decade despite the efforts of city leaders to manage it.

The city is now where Milwaukee County was six or seven years ago – on the threshold of major fiscal imbalance and in need of far-reaching solutions. Whatever actions are decided upon must involve both city and state officials and must be of the size and scope needed to truly address the city’s fiscal challenges. Otherwise, as we argue in the report, the city will be unable to avoid several successive years of deciding between police or potholes.