TIF changes on the horizon in Wisconsin

In a rare showing of bipartisan accord in Madison last week, the Wisconsin Assembly unanimously passed a bill allowing local governments to create new tax incremental financing (TIF) districts jointly between two bordering municipalities. The changes included in the bill raise several questions about how TIF currently is used in metro Milwaukee, and how it could be used most effectively.

TIF is a financing tool that allows municipalities to borrow against future property tax revenue to fund current development projects. Though few people are familiar with TIF, it is the most widely utilized economic development tool in Wisconsin. In fact, a past Forum report, Too Much or Not Enough?, revealed that as of 2008, there were nearly 1,000 active TIF districts in Wisconsin with a total assessed value of over $15 billion.

IF was originally created to facilitate redevelopment efforts in blighted urban areas, but in 2003, state law was broadened to allow TIF to be used for nearly any type of development project deemed impossible to realize without public assistance. The bill approved by the Wisconsin Assembly makes TIF even more flexible. In addition to allowing TIF districts to cross municipal borders, the multi-jurisdictional districts would also be exempt from a state law restricting municipalities from creating new TIF districts if 12% of their total property value already falls within existing TIFs.

Past Forum research has revealed that the City of Milwaukee utilizes TIF at a far lower rate than many smaller cities in the metro area and many large cities in the Midwest. According to the Wisconsin Department of Revenue, the City of Milwaukee’s current TIF utilization rate is 3.9%, which falls below the state average and far below the state’s limit. Allowing the City to team up with its neighbors could help to boost Milwaukee’s TIF utilization rate and property values, provided there are promising and fiscally sound projects at the city’s edges. The same may be true for other large municipalities in the Milwaukee metro area. The Forum’s economic modeling has suggested a 10% increase in TIF utilization by Wisconsin cities with populations over 50,000 could result in a 2% increase in their total property values.

However, Too Much or Not Enough? also suggested TIF utilization rates at the municipal level have regional economic impacts. Exempting shared districts from the 12% state limit could result in over-utilization in suburban and rural communities on the metro edge. Our economic modeling indicated a 10% increase in TIF use by an average Wisconsin suburb could result in a 0.2% decrease in property values for that community and a 1.1% decrease in the property values of the central city. All of the communities in the Milwaukee metro area that currently have TIF utilization rates in excess of the state limit are smaller suburbs, so new shared TIF districts in those places should be analyzed carefully to avoid detrimental regional effects.

There are also several practical hurdles potential cross-municipal TIF districts will have to overcome. First, all of the taxing jurisdictions within which the project is located would need to sign off on the project. For example, a hypothetical new TIF district on the border between West Allis and Brookfield would have to get the approval of two cities, two counties, two school districts, and two technical college districts. In addition, under current Wisconsin law each municipality is allowed to use its own set of criteria to determine whether a project qualifies for TIF, so potential projects would have to meet the standards on both sides of the municipal border.

With TIF districts crossing borders and having regional economic impacts, it may be more useful than ever to develop uniform TIF standards for the metro area that facilitate the development of this new type of district while helping municipalities to choose new TIF districts that are beneficial not only for their own property values, but for the Milwaukee region as a whole.

Maxmizing the local economic benefits of academic research

This afternoon the Public Policy Forum takes up the topic of the economic impact of academic research at our Viewpoint luncheon. One specific way in which research leads to job creation and business development is via technology transfer – the legal process in which new discoveries are patented, marketed, and licensed to commercial manufacturers. Southeast Wisconsin is home to several academic research institutions, each of which goes about technology transfer independently, for the most part. A new Forum report to be presented at the luncheon today examines whether greater collaboration among the region’s research institutions is needed to maximize the local economic impacts of technology transfer.

Our analysis finds that there are three models that might be considered by academic leaders to enhance collaboration in technology transfer and potentially augment the effectiveness of existing efforts:

• Joint Office of Technology Transfer
  A joint office of technology transfer could potentially result in greater expertise in economic development practice for the participating institutions, as well as economies of scale. However, a joint office may stretch the resources of technology transfer officers to the point that some institutions may experience reduced levels of service. Equitably funding a joint office to serve public and private institutions also would be challenging.
• Joint Infrastructure for Informal Technology Transfer Activities
  Currently, much of the technology transfer work performed by academic institutions is of the informal variety - building awareness of academic research projects by industrial researchers and investors through networking and partnering. At the federal level, this work is performed by a permanent consortium of the federal research labs. A similar consortium of local institutions could be created and charged with raising the profile of translational research for local industry. Each participating institution would have to trust, however, that its financial contributions to the consortium would eventually result in benefits for its researchers.
  
• Joint Economic Development Entity
  We found four different types of collaborative economic development agency models aimed at increasing the local economic impact of academic research. All are aimed at encouraging and supporting the transfer of technology to local industry and start-ups, but each does so a little differently. The biggest hurdle for this model is sustainability - a previous, state-funded, southeast Wisconsin economic development effort, TechStar, proved unsustainable.

In addition to considering the creation of a new full-fledged collaborative infrastructure based on one of the three models above, the region's research institutions could consider collaborating on more targeted strategies to ensure that their research positively impacts the local economy:

1. Expand the UWM-MCW First Look Forum to other research institutions—Offer more researchers the opportunity to participate in these events designed to connect academic researchers to investors and industry.
2. Jointly offer start-up support or an entrepreneur-in-residence program—Collaborate to ensure local researchers have the opportunity to be educated about commercializing technology through company formation, mentored through the technology development and venture formation process, and connected with outside resources that can provide services, advice, funding, and management expertise.
3. Jointly raise funds for pre-seed grants—Expand the UWM Catalyst Grant program to other research institutions by working together to raise additional funds from foundations and industry.
4. Utilize a joint tech transfer advisory committee—Maximize local resources by forming a joint advisory committee of investors and industry leaders to advise on patenting decisions, particularly those arising from research projects conducted collaboratively by two or more CTSI institutions.
5. Create a local industry database—Provide researchers at all local institutions with data about industry needs and interests, as well as contacts, by jointly creating and managing a local industry database.
6. Host clinician informant panels—Increase awareness among researchers who are not also clinicians by jointly hosting opportunities for discussion of clinical problems in need of solutions.

It is clear that the region’s academic research institutions have yet to capture the full economic development potential of their research. By collaborating more closely to identify local discoveries that fill gaps in the global market, and by working together to help create or grow local players in that market, academic leaders could take better advantage of their rapidly emerging research prowess.

When the going gets tough...

"When the going gets tough" is the theme of this year's Salute to Local Government, an event held annually by the Public Policy Forum since 1992 to recognize outstanding and innovative government performance in southeast Wisconsin.

This year's theme recognizes that as bad as the historic economic downturn has been for all sectors of our economy, the local government sector has been among the hardest hit. Indeed, plunging property values and sales tax revenues, coupled with growing demand for a variety of local government services, have created severe challenges for even the most property-rich and prudently managed local governments. Those that have weathered the storm - and perhaps emerged even stronger from their innovative efforts - certainly are worthy of recognition this year.

The 2010 award winners - described in this media release - represent a diverse group of governments, programs and individuals throughout the region. Government honorees, for example, include our biggest city, two villages and a special authority, while honored programs encompass functions ranging from watershed management to a library to a zoo. The individual award winners, meanwhile, come from the region's second-smallest county, a small city and a consolidated fire department.

So what's the overall takeaway from this year's slate of winners? Perhaps it's that examples of good government permeate all levels of government in our region, as well as a wide variety of programs that ordinary citizens may not realize are linked to the public sector or even think about as being managed in creative and effective ways.

That's not to say that examples of wasteful and ineffective government don't exist, but it is to say that such examples - while constantly and justifiably in the news - cannot be allowed to overshadow the good work being performed by thousands of local government and school district professionals in our region every day.

This year's Salute will take place on June 17 at the Italian Conference Center - to find out more and sign up, click here.

A different path toward regional decisionmaking?

A recent article by Alan Ehrenhalt, editor of Governing magazine, suggests an interesting approach to bring metro areas closer to the elusive dream of regional government. The piece may be particularly provocative for those areas that have dabbled with the notion of regional government but appear to have little hope of achieving it - places like metropolitan Milwaukee.

Ehrenhalt starts his piece by discussing Buffalo, where city and county governments have failed to develop new business models despite a declining population and new and different economic challenges. He asserts that "both the city and county need a thorough bureaucratic housecleaning that would save money and make the whole region more competitive in attracting the new business it badly needs".

Ehrenhalt describes the failed effort of a former Erie County executive to solve the problem by creating "a regional government that would eliminate all the duplication and phantom agencies and place the area on a sound fiscal footing for the first time in a generation". He also cites the dozens of other metro areas that "have been engaging in the same debate for years, understanding at some level that cities and suburbs have to function together as regions, but unable or unwilling to make the sacrifices that could help bring it about".

Acknowledging that this parochialism likely will persist and preclude a shift to regional government in most metro areas, Ehrenhalt instead proposes to vest more power with the one regional governmental entity that currently exists: the metropolitan planning organization (MPO). He argues that if the federal government "figured out a better way to use these entities," metro areas could reap more of the benefits of regional planning and decision-making without having to motivate dozens of municipal governments to disband. Among other things, MPOs could directly receive and distribute transportation and economic development dollars from the feds, thus bypassing state and local governments and allocating those dollars based on regional planning and strategies.

Would such an approach be tenable and beneficial to southeastern Wisconsin? Clearly, there would be obstacles, not the least of which would be addressing the concerns that already have been voiced by City of Milwaukee officials, among others, regarding inequitable urban representation on our MPO, the Southeastern Wisconsin Regional Planning Commission (SEWRPC).

Ehrenhalt notes that the one-county, one-vote approach currently employed by SEWRPC and many other MPOs, as opposed to proportional representation by population, likely would be challenged in court if real regional decision-making power were granted to the MPO. This suggests that a change in representation might be a prerequisite to implementing such an approach in southeastern Wisconsin, which of course would engender its own political controversy.

But putting aside the legitimate issue of composition, could a SEWRPC that was the direct recipient of federal dollars and that was empowered to enforce its regional land use and transportation plans inch us closer to a regional approach to governing that would make us more cohesive and competitive? The answer largely depends on whether one believes that our existing government structure is ineffective and outdated, and that the collective needs of the region should trump the desires of existing municipal and county units of government.

That being said, perhaps we learned an important lesson recently that giving more decision-making authority to SEWRPC at least could enhance cooperation. After weeks of disagreeing over the proper allocation of $38.7 million in federal stimulus money for area road projects, a SEWRPC advisory committee (whose composition is proportionally based on population) accepted a compromise brokered by SEWRPC staff. The final vote reflected support by both Milwaukee and suburban representatives.

Yes, it was messy and time consuming, but at least a difficult regional issue eventually was resolved in a manner that neither side found objectionable. For that matter, SEWRPC has been distributing various state-allocated transportation funding streams for years with little controversy. And in today's political environment, how often does that happen?

Regional identity could help Great Lakes cities leverage their assets

We’ve all heard of the brain drain—that powerful vacuum sucking all of the college-educated young professionals out of cities like Milwaukee. More recent reporting suggests that many who leave later return to the Milwaukee area. What do these returned brain drainers like myself have to say about their beloved but struggling Midwestern cities? Detroit’s Sarah Szurpicki and Abby Wilson of Pittsburgh have the answer. After stints in New York City and South Africa, the duo returned to their hometowns to co-found GLUE (Great Lakes Urban Exchange), an organization seeking to bolster regional identity among older industrial cities.

GLUE just completed its second annual conference in Milwaukee, featuring an inspirational mix of post-boomer urbanites from rust-belt cities like Buffalo and Cleveland sharing ideas about urban renewal, the green economy, sustainability, transit, community journalism and more. Following tours of the Growing Power urban farm, Menomonee Valley’s sustainable redevelopment, and the Great Lakes Water Institute, I’m still on a high from hearing so many people call Milwaukee a beautiful and impressive city. One participant from St. Louis commented, only partially joking, that he was now deciding between Paris and Milwaukee for his honeymoon.

If that didn’t warm my Milwaukee-loving heart enough, there was also serious information about how the Midwest can leverage its assets to compete in the post-industrial economy (covered locally here and here). Conference speaker Richard Longworth, senior fellow at the Chicago Council on Global Affairs, first laid out some bad news: the Midwest has in some ways lost its embrace of change and its former knack for innovation and creativity. Moreover, independent-minded Midwesterners are not accustomed to working across borders to create regional, shared solutions. No Midwestern university teaches even one course on the Midwest. Fragmented efforts, such as the fact that each state has its own separate bioscience organization, lead to duplication and competition. Longworth didn’t mince words. “The good news is this era is so new. The bad news,” he said, “is that so much of the Midwest is already behind.”

The advantages that Great Lakes cities share include having existing infrastructure and appealing street grids, a density that can support development, an intense work ethic, access to bioscience raw materials, and, of course, plentiful fresh water. Opportunities exist if the region plays its cards right, in industries of the future such as clean water technology, bioscience, nanotechnology, green industry, and transit.

But how can the Midwest and its Great Lakes cities maximize assets? Multiple speakers at the GLUE conference stressed the need for regional planning and geographic unity (as did this recent local editorial), what Longworth characterized as a need for a Midwestern Marshall Plan. Tom Wolfe of the Northeast Midwest Institute described how sustainability should be a principle criterion for the distribution of federal dollars. Kate Rube of Smart Growth America showed how current zoning and land growth laws need to be revised because they often make “smart growth” sustainable development illegal. John Austin of the New Economy Institute highlighted affirmative, targeted immigration policies as a promising strategy for bringing innovation back to the Midwest, an especially important approach for Midwestern cities that are losing population.

The winds of change blowing off the lake appear to suggest that Great Lakes cities would do well to adopt an open attitude toward regionalism, the new green economy, and the feedback of young professionals who are reversing the brain drain in their post-industrial Midwestern cities and beginning to speak with a unified voice through organizations like Great Lakes Urban Exchange.

"Shrink gracefully, rust belt," suggests Florida

Richard Florida, that is. In this month's cover article in the Atlantic Monthly, the professor famous for his "creative class" theory of urban renewal suggests that the recession will result in growth in a few mega-regions across the country and cause other cities (read Midwest, rust-belt cities) to shrink. Florida's suggestion is for policy to allow these cities to shrink gracefully by funding a temporary cushion as they adjust to their new size.


As counter-intuitive as his idea might seem, he does have a track record of influencing urban policy based on his novel research, which means this new theory could gain traction. In addition, there is a fledgling shrinking cities movement (originally blogged about on Milwaukee Talkie in May 2007), that aims to adjust declining cities' geographic and service areas to better match their smaller populations.


But Prof. Florida has his detractors, both inside and outside the rust belt. So expect there to be real debate (also here) in many struggling cities over Florida's ideas, which he describes rather simply, leaving some room for interpetation.


Florida suggests that public policy should favor rental housing over home ownership, as home ownership is not economically healthy for today's post-industrial age, preventing workers from relocating with jobs. He also advocates for investing in the current mega-regions that have succesfully attracted a density of talent and innovation, the Silicon Valleys and Research Triangles of the world, by making them more affordable for more people and more environmentally sustainable. Finally, he posits that improving quality of life for people who remain in shrinking cities can be achieved by cultivating high-growth services and industries in those locations.


And what are the implications for Milwaukee? Florida doesn't specify, but one interpetation is that Milwaukee has a choice of how to fit in this new economic theory: to be a shrinking city or to join the Chicago mega-region.

What's Wrong With Local Competition?

Do regional economic development initiatives have plenty of gloss but little substance? That’s a question some are asking after a recent Journal Sentinel report that our own regional initiative, the M7, is shifting its strategic focus. The M7 commissioned a study to outline a strategy for recruiting some businesses that might like to relocate to the region. The study suggests that the M7 focus on recruiting from two industrial sectors: control and instruments technology and food processing.

While the report is a useful planning tool, it brings attention to the fact that M7 has yet to draw a major corporation to the area. We should commend the 5-year-old M7 for acknowledging that reality and announcing a new tactic. But, there’s a broader question here about regional cooperation as a strategy to attract new businesses. From a public policy perspective, are these sweeping regional cooperative efforts the best option?

Informal regional cooperation and governance initiatives similar to M7 became popular in the 1990s after a cycle of more formal regional governing institutions that sprang up during the 1960s and 70s, such as Unigov in Indianapolis and the federated tier system in Miami-Dade.

Unfortunately, there has been little empirical evidence linking regional cooperation initiatives or regional governing bodies with clear economic benefits. Local competition among municipalities appears to work just as well. In fact, there is much economic research, based on the “public choice” theory of Charles Tiebout, that argues that local competition is more efficient than regional cooperation.

More recent research shows that strong, tangible incentives from individual municipalities (along with state tax breaks) draw the first-class corporations, like Boeing moving to Chicago.

Regional efforts have more success in building regional infrastructure projects, which arguably have the largest economic benefits of all kinds of public spending. Regional cooperation in building specific infrastructure projects, such as public transit or intermodal freight stations, has been found consistently to raise local property values.

All this calls into question the appropriate goal for M7: should they continue to focus on business recruitment or should our regional efforts also concentrate on funneling local investments into larger regional projects?

Discussion of big picture government reforms should be accompanied by small-scale consolidation

If last week's Public Policy Forum Viewpoint Luncheon on the future of county government taught us anything, it's that far-reaching structural reform of our governmental framework will not be easy (to watch the luncheon discussion on the Wisconsin Eye website, click here).

We gathered six individuals with intimate knowledge of county government - as well as standing with diverse elements of the community - to offer their insights on the future of Milwaukee County government and our overall government structure. Only one of the six voiced support for the notion of "blowing up" the county, while several said the problem is not Milwaukee County government's structure or existence, but the inability of its leaders to get along and act decisively.

As reported by WisPolitics, while there was not a lot of support for dissolving county government, there was virtual unanimity that there is too much redundancy in government and too many layers. One panelist suggested the best approach would be to enlarge county government by eliminating municipalities and folding their functions into it, a notion that was angrily refuted by a local mayor in the audience. Others cited various examples of smaller-scale consolidation activities that could begin immediately.

Our Viewpoint demonstrated that the question of whether and how to restructure our system of governance is highly complex, highly political, and demands a great deal of additional thought and research. It showed there's a lack of consensus on what to do, though this cannot be an excuse for failing to properly acknowledge the depth of Milwaukee County's fiscal problems and the need to focus on solutions. The Forum plans to place those problems in better context in the near future with a research product that will objectively assess the county's fiscal condition using well-established criteria and benchmarks.

In the meantime, we also learned that while we thoughtfully grapple with big issues of government structure, we should not overlook pursuit of smaller consolidation efforts. The county itself just launched an impressive consolidation initiative with the city of Cudahy, under which the county will provide information technology support to the city. Cudahy gets IT support at a better price than it would from hiring its own staff or contracting with the private sector, and the county's IT operation gets some outside revenue to reduce its need for property tax support.

Consolidation efforts like this will not solve the fiscal problems facing county and municipal governments. However, they're a step in the right direction fiscally, and they will do wonders in convincing the public that government does have the ability to look past protecting its turf and toward better management of taxpayer resources.

Dreaming of Milwaukee's next big thing

My move back to Wisconsin from California in 2001 was largely fueled by my desire to live in Milwaukee - a community that simultaneously embraced the construction of the daring Calatrava addition to the Milwaukee Art Museum and the destruction of the divisive Park East freeway spur. It seemed to me that such forward thinking, risk-taking endeavors surely revealed a city on the brink of an urban renaissance. I moved to a city on its way up.

Now, in 2008, I'm left wondering what will be Milwaukee's next big thing. Of course, I'm under no illusion that it will be a quick fix to our deeply entrenched economic and social woes. But, I do harbor a hopefulness that bold new ideas can fuel a resurgence of civic pride and national attention that can only help our great city.

Bold ideas. We need more of them to sustainably grow the economies of the upper Midwest. In an age where the Midwest's cities have been left to address the gaps left by decades of federal indifference, urban economic development will require bold ideas from visionary public sector leaders at the local level.

What ideas qualify as such? One example is the idea hatched by the City of Atlanta to use tax increment financing (TIF) to fund its ambitious BeltLine project. From the Forum's recent Research Brief:

The City of Atlanta has long been known for its dynamic business environment and explosive growth. Unfortunately, it is also known for sprawl, air pollution, lack of greenspace and traffic congestion. In an effort to address these “quality of life” issues and reassert the region’s competitive position, the City of Atlanta recently approved the creation of a TIF for its “BeltLine” project. The BeltLine is currently the largest redevelopment project in the United States and will encompass 8% of the city’s total land area and generate $1.7 billion dollars in revenue. The project will transform a ring of blighted and underutilized land encircling the city to multi-use trails, parks, transit improvements, affordable workforce housing and Atlanta Public Schools projects. In what promises to be the most ambitious use of TIF in the country, after 25 years the BeltLine TIF will contain over $20 billion of increment value—larger than the sum total of all TIF districts in the state of Wisconsin. Atlanta’s Beltline TIF is not only big, it’s also innovative and is continually cited as a model for transparency and accountability.

Let's be clear, a developer didn't walk up to Atlanta's city hall one afternoon and request a $1.7 billion TIF. The BeltLine is a public sector led project at its core.

In Milwaukee, TIF has been used to fund bold public-sector driven initiatives like the construction of the downtown riverwalk, the demolition of the Park East freeway, the clean-up of the Menomonee Valley, and the revitalized 30th St. Industrial Corridor. What other opportunities might there be?

I can think of two:

• A modern transit system—Use TIF to finance station and land development costs associated with transit upgrades (express buses, KRM, high-speed rail)
• Slow employment and income growth—Use TIF to finance growth in emerging regional industry clusters (financial services, water technology, advanced manufacturing) as identified in the M7 Strategic Framework.

The partnership between TIF and bold new ideas may be the currency of 21st century Milwaukee. What are your ideas?

What if Milwuakee went to bat for Chicago?

Here's a twist. Milwaukee lobbying for investment in Chicago. A recent Sun-Times editorial, suggests that leaders in large metro areas (like Milwaukee and Chicago) should band together and lobby the federal government for more investment to spur metro economic growth.

The editorial states that Chicago's train yards would be a good place to start:

"At the heart of the nation and on the shores of Lake Michigan, Chicago's location makes it the third largest intermodal port in the world, after Hong Kong and Singapore. Almost $1 trillion of our nation's freight moves through this region annually, and freight volumes are expected to increase 80 percent or so in the next 20 years. Yet trains often must slow to a crawl through northeastern Illinois and northwestern Indiana because technological and physical updates to tracks and rail yards are long overdue. Businesses are losing money due to delayed deliveries, and drivers are experiencing more traffic jams on local roads. The federal government's response has been to spread surface transportation funding around like peanut butter, rather than investing strategically in major national rail hubs, ports and gateways, like Chicago."

What would be the rationale for politicians in Southeastern Wisconsin to go to bat for federal investment in Chicago's train yards? Simply put - the more goods that Chicago imports, the more goods that southeastern Wisconsin can distribute.

The Milwaukee region is a natural hub for distribution and logistics. In fact, the M7 has identified "distribution" as a regional export driver - with the region currently playing host to 10,386 distribution jobs paying an average wage of $50,815. Not bad.

Our region is emerging as a distribution hub because of ample land and lower costs. Just look at yesterday's news that Illinois-based Coleman Cable, will expand into a 502,000 sq. ft. building and bring with them 75 jobs for their warehousing and distribution functions. The company states:

"...the Pleasant Prairie location will allow the company to consolidate distribution facilities and reduce costs, while simultaneously...providing first-in-class logistics, delivery and customer service."

The Coleman Cable expansion news follows the announcement by Uline Inc. that it will move its headquarters, R&D and distribution functions from Illinois to Wisconsin by 2010 - adding 1000 jobs to the Milwaukee region.

Despite our market advantages and recent "wins" in the distribution game, can we really expect our region's leaders to expend their political capital south of the Wisconsin border?

It's possible. The most recent precedent for Wisconsin going to bat for Illinois is Milwaukee's recent embrace of Chicago's 2016 Olympic bid. On the state level, Wisconsin also recently joined an effort last year to win a federally funded, state-of-the-art coal gasification plant for southern Illinois.

In the end, cooperative lobbying efforts could translate a Chicago gain into Milwaukee growth.

Shotgun regionalism

Revenue-sharing agreements among local counties are usually developed to benefit both jurisdictions and are usually true agreements, one would hope.

Not in Ohio. Weighted representation on Northeast Ohio's metropolitan planning organization (the Ohio version of SEWRPC), has led to Cleveland being able to throw it's weight around, perhaps a bit too much.

A highway interchange improvement located in a suburban county would not have been approved by Cleveland's Cuyahoga County, which has more votes than any other county due to having the largest population, unless the town housing the interchange agreed to a unique revenue-sharing arrangement. The other suburban counties went along, because their votes did not have enough weight to stop the plan. The result is that the City of Avon must send half of the income tax money collected from a business with an annual payroll of $750, 000 or more that relocates to the area around the interchange back to the community the business moved from for five years. Those terms will remain in effect for 30 years after the interchange’s construction.

The heavy-handed tactics have angered all the suburban counties, including Medina, which is now planning to leave the regional planning organization. “Avon had a gun to its head,” said a Medina county commissioner. "We don't want to be in that boat."

Imagine if Ozaukee or Racine County pulled out of SEWRPC because Milwaukee County forced Oconomowoc to share revenue from the Pabst Farms development. Milwaukee, of course, doesn't have that kind of power within SEWRPC, as votes aren't proportional to population. In fact, many complain that SEWRPC over-represents the suburbs. But it isn't unheard of for a central county to be in a different planning area than its suburbs. Dane County is in just that situation, for example.

Observes an Ohio county commissioner, "This is a dead end to regionalism." The next time we complain about the lack of regional cooperation in southeastern Wisconsin, let's note that we at least have all our counties sitting at the same table when it comes to planning, which is more than they can say in Northeast Ohio or Southwest Wisconsin.

PPF Pearl: The Oil of the 21st Century

Southeastern Wisconsin’s water is in the news this fall – as a commodity coveted in the west, as a weapon in the regional conflicts over development, as a potential asset to improve our economic competitiveness, and today again as a diminishing resource in Lake Michigan. All of this makes it worthwhile to revisit the findings of the Forum’s water study that concluded last year.

Our research drew some important conclusions about water resource management. We reported the following:

“Unlike counties and villages, water knows no boundaries, making management of this asset extremely complex…We face urgent problems, such as dropping water tables and deteriorating quality. Jurisdictional overlaps, policy gaps, and lack of information hamper solutions. Leaders must think strategically and regionally about managing water resources.”

Our advisory panel called for an integrated water strategy that recognizes the relationship between surface waters and groundwater, one that addresses quality and quantity, links to other types of planning and is grounded in scientific data that might ultimately lead to a “no-net loss” concept of replenishing the water we use.

The attention our water draws will increase dramatically as we get deeper into the 21st century, and the news will continue to underscore the importance of our behaving regionally and strategically. The urgency of cooperation in Southeastern Wisconsin – and within the larger Great Lakes region -- seems to be accelerating.

Dispatch from Denver: Mayoral Leadership

One perk of attending the annual conference of the Governmental Research Association in Denver this week has been to hear a talk by Denver’s Mayor John Hickenlooper. Mayor Hickenlooper was re-elected to his second term with an incredible 87% of the vote, making him one of the most popular mayors in the history of this city…which is probably not entirely attributable to his ownership of a local brewpub.

Mayor Hickenlooper’s popularity is due, in part, to his reputation as a regional leader. His unique consensus-building style has led him to promise to Denver’s suburbs that the region’s largest city would only act on issues in the interest of the region as a whole, and would not work to benefit itself at the expense of its neighbors. So far Mayor Hickenlooper’s record has been impressive in terms of regional cooperation, and he enjoys broad support from his fellow Front Range mayors.

An anecdote he told to explain his leadership philosophy is enlightening. He once read about a professor of communications in Wyoming who taught her students that to have an impact on their audience they should always speak about both the emotion they were striving to convey, and its opposite. For example, to inspire joy one should speak about joy in the context of despair. She then asked her class, “What about woe? What’s the opposite of woe?” To which someone in the back of the Wyoming classroom shouted, “Giddy-up!”

And that has been the Denver mayor’s guiding principle for the past 5 years…when faced with woe, you have to shout, “Giddy-up!” Perhaps the frontier has something to teach us Midwesterners.

Keeping up with the Brahmins

Quick...what region does this quote refer to?

...[T]his small region with its extraordinary innovative capacity and still untapped potential can make a real difference in determining which road we go down.

Sounds like Milwaukee, but this was spoken at a recent citizen seminar at Boston College to release the latest Boston Indicators report. According to syndicated columnist and regionalism booster Neal Pierce,

[T]he Boston Indicators, spearheaded by the Boston Foundation's Charlotte Kahn, have become the gold standard for U.S. regions. They're not just boatloads of raw data; rather they're framed, topic by topic, with readable, updated analysis and available online at http://www.bostonindicators.org/. Any leader or citizen can get a clear, quick view of just where the region is progressing, where it's stalled, and potential cures.

The Milwaukee region has yet to develop a set of similar indicators, which means we may be missing out on insights such as this:

The Indicators show that spending on health care in Massachusetts soared 44 percent from 2001 to 2006, even in the face of stagnant population levels. State health outlays are crowding such other priorities as local and higher education, human services and needed public-transportation projects. Yet obesity and hypertension, risk factors for heart disease and type 2 diabetes, continued to rise.
"There's something wrong with this picture," notes Kahn: "We aren't aligning health spending with the actual determinants of health — 50 percent of which are all about lifestyles and another 20 percent the environment, including exposure to toxins — and only 10 percent access to doctors, clinics and hospitals."

The Milwaukee 7's strategic framework will help the region coalesce around common priorities, but we will also need a robust set of indicators to tell us whether we are making any progress toward achieving those priorities. Boston is serious about being competitive in the global economy, is Milwaukee?

Time for Milwaukee to emulate Madison?

The city of Madison and Dane County recently announced an agreement to pursue the creation of a regional transit authority (RTA) in an attempt to improve the Madison region's transit infrastructure. This announcement came after a rather bitter disagreement between Mayor Dave Cieslewicz and County Executive Kathleen Falk over the kind of transit needed. The Mayor opted for a city-focused trolley; the county executive wanted a county-wide commuter train.

Sound familiar? The Falk/Cieslewicz battle is similar to the disagreement between Milwaukee Mayor Tom Barrett and County Executive Scott Walker over how transit should look in Milwaukee.

The debate in Madison ended with a signed regional cooperation agreement that calls for the creation of an RTA and the implementation of a multi-phased plan to improve the regions transit infrastructure. The proposal seeks to up the sales tax in Dane county by .5% - not an insignificant figure. The funding mechanism would tie buses, trolleys, trains and roads into one integrated, multimodal transportation system.

The Madison newspaper, Wisconsin State Journal, endorsed the proposed agreement this week in an editorial, which read, in part:

"In addition to keeping alive the plan to develop a commuter rail line, the agreement:

• Merges Cieslewicz's plan for Downtown streetcars with the commuter rail proposal to create one transportation system that could be developed in phases.
• Offers a new way to finance the operation and expansion of Metro Transit bus service, relieving pressure on property taxpayers.
• Provides a new way to pay for improvements to roads in Dane County's villages and towns.

Consequently, the agreement offers aid to a variety of transportation options throughout the county.

Madison and Dane County need more information before deciding whether commuter rail, streetcars, expanded bus service or an added sales tax are the right transportation answers. But by holding the options open, Wednesday's agreement keeps Madison and Dane County on track toward regional solutions."

Is the Milwaukee area ready for such an agreement? This is a difficult question to answer, but a 2006 Public Policy Forum opinion survey did find strong support for transit improvement projects throughout the Milwaukee region, with transit options having higher approval rates then "more highway capacity." The Public Policy Forum will continue to track public opinion and monitor progress on transit planning in the Milwaukee community.

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.

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.

The slicing of Wisconsin

Click on the following link to get a quick visual history of political fragmentation in the United States. By clicking on the link you will be treated to an animated map showing state and county boundary changes from 1643 to present. Focus your gaze on Wisconsin and watch our state get sliced and diced over time. It's interesting to see the increasingly smaller county unit creep from the southeastern corner of the state until they reached lake Superior years later.

The question is simple: do these historical boundaries match today's service delivery needs?

In some communities elsewhere, there have been city/county consolidations to better align taxpayer needs with a set of more workable political boundaries. According to one report, cost savings of such consolidations have been negligible. Given the huge political barriers to governmental consolidation, the shared services (i.e. cooperation) approach to dealing with political fragmentation has won some converts in southeastern Wisconsin. A Public Policy Forum report released in April of 2006 documented 145 shared service agreements in the seven county region among the 63 municipalities and counties that responded to our survey. We were pleasantly surprised at the extent and array of such services, but there is always room for greater cooperation, of course. It's imperative for our diced-up state to find more ways to come together.