PPF Analysis of the City of Milwaukee's 2008 Budget

Each year, the Public Policy Forum releases an analysis of the City of Milwaukee's proposed budget. This year's budget brief can be found here.

What follows is the concluding statement from our 2008 budget brief:

"In our analysis of the 2006 proposed budget, we praised the city for its three-year fiscal sustainability plan. The existence of such a plan showed the city's commitment to thinking strategically, planning for the future, and moving away from a focus on yearly budget balancing and toward long-term fiscal solvency. The city has made good progress toward all of its goals; some it has achieved. Throughout the budget, there are signs of the city's attempt to be more strategic in its thinking. A strategic plan toward capital budgeting is being crafted. The city is spending some money in the short term that will save money in the long run in the area of energy efficiency. Changes in the library system are being made as a result of a strategic plan. The fire department is planning on making cuts that may be unpopular but have been extensively studied and shown not to result in less safety. The police department is in the process of doing a number of studies to use its force more efficiently, and has shown progress toward evidence-based policing.

Nevertheless, the budget lacks a comprehensive plan for fiscal stability in the future. The budget is not only a ledger of expenditures and revenues; it is a policy document. As such, it would be stronger if the administration included a more detailed analysis of the successes and failures of its three-year fiscal sustainability plan, as well as a new plan for moving forward. Although the city did identify some issues that need to be addressed in the future to improve fiscal sustainability, a continuation of the original three-year plan would be preferable. This is particularly important because, even though the city has made substantial progress toward the goals set out in 2006, this year's budget makes it abundantly clear that even complete achievement of those goals is not enough to rid the city of its structural deficit."

The Department of Public Schools?

This summer Mayor Tom Barrett seized control of Milwaukee’s workforce development efforts from the Milwaukee County Private Industry Council. Could – or should – Milwaukee Public Schools be his next acquisition? The authors of a new study would argue that might not be a bad idea. Their research suggests mayoral control can make a difference.

The idea has been around for a long time. The Boston mayor took over the public schools in 1992. Since then, it happened in New York, Chicago, Cleveland and scores of smaller cites where mayors wanted to integrate the management of public education with the overall governing of the city.

Now Brown University education professor Kenneth Wong and his co-authors have taken a comprehensive and balanced look at mayoral control of urban school districts. Their study outlines what school governance looks like under mayoral leadership, how mayoral control affects outcomes, and how mayoral control effects practical changes in classrooms. The research findings indicate that mayoral control of schools can successfully emphasize accountability across the education system, providing more leverage for each school district to strengthen its educational infrastructure and improve student performance.

The authors emphasize a takeover by city hall may not be appropriate for every district. Is it a good idea for Milwaukee? I don’t know, but this study merits consideration by policymakers, civic leaders and politicians in Milwaukee and elsewhere in Wisconsin.

New research on school choice: Winning isn't everything

How many times have you heard of a lucky duck who wins the lottery, just to squander it all and return to his old work-a-day self? I'm sure those guys thought winning the lottery would turn their luck around forever.

Just like education reform proponents who are fond of calling school choice a "panacea" think that winning a voucher or attending a private school automatically results in a better student.

Well, there is new evidence that offering a choice isn't, by itself, going to effect education reform. A newly released study by the National Bureau of Economic Research (authored by Julie Berry Cullen of UC-San Diego and Brian Jacob of the University of Michigan) attempts to focus on the "lottery" effect of school choice by tracking, over time, students who won the ability to choose their Chicago public schools in Kindergarten or first grade. By also following students who did not win, they are able to avoid what is the biggest hurdle to good research on the effect of school choice...non-random selection.

Here in Milwaukee vouchers are not awarded randomly to families. In our city, parents first must find a school, then apply for a voucher seat at that school. Only if there are more applicants than seats will random selection kick in, and even then, the student is only competing against the other students who have chosen that school...they are not in a pool with students choosing other schools. Not a random situation at all. (Which is not to say it isn't in the students' and schools' best interests to operate the program that way, just that it is difficult to research rigorously due to this.)

In Chicago, however, the lottery operates first, randomly selecting from the entire pool of interested students those that will be able to "open enroll" in a public school of their choice. The winners then choose their schools. Cullen and Jacob find that the winning students "attend higher quality schools as measured by both the average achievement level of peers in the school as well as by value-added indicators of the school's contribution to student learning." Meaning the winners ended up in schools that had highly performing students and that improved students' scores over time. Sounds pretty good.

Unfortunately, many of these students turned out like those unlucky lotto winners of lore. The authors found no systematic educational benefits accruing to the winners:

We do not find that winning a lottery systematically confers any evident academic benefits. We explore several possible explanations for our findings, including the possibility that the typical student may be choosing schools for non-academic reasons (e.g., safety, proximity) and/or may experience benefits along dimensions we are unable to measure, but find little evidence in favor of such explanations. Moreover, we separately examine effects for a variety of demographic subgroups, and for students whose application behavior suggests a strong preference for academics, but again find no significant effects.

Because of the random selection, Cullen and Jacob can focus on the difference between schools to try to explain their results and not the difference between winners and losers. Why aren't the "good" schools improving outcomes for the lottery winners? Why isn't attending a good school enough to change your luck forever?

Obviously, because it's more complicated than that. Education reform must go beyond waving a magic wand and granting a parent's wish for a better school. Ask any principal in Milwaukee how easy it is to bring a poorly performing student up to grade level...it's hard work that isn't any easier just because the school has a good reputation or the word "private" in its name.

Now, private schools do have some ability to work with students' families in ways public schools do not. Usually this ability is what leads people to predict that private schools outperform public schools: if the parents or student aren't cooperating, the student doesn't get to stay and the school climate stays focused on high achievement.

However, another new report, this one from the Center on Education Policy, found that, controlling for family background and prior achievement, students attending private high schools performed no better than students in traditional public high schools on math, reading, science, and history achievement tests and were no more likely to attend college than public school students.

If accurate, this finding is truly disheartening. If the schools that are able to "choose" their students aren't achieving at a higher rate, and if winning the ability to choose a better school doesn't improve achievement, then how can school choice possibly be expected to be the tide that lifts all boats?

Again, it is complicated. There is too much variation in the school universe to paint all private schools, or all public schools, with the same brush. Some will be very good, some will disappoint, and some might even be damaging. The same is true for voucher winners. Some will maximize the opportunity, some will squander it, and some will try their best to no avail. It's time to acknowledge that there is no "gold standard" for education reform because schools and students cannot be standardized. Improvement will come classroom by classroom from the sweat of the brows of teachers and students working together. Reformers, and policymakers, must return focus to the work of the classroom.

PPF Viewpoint luncheon: Workforce Development

Workforce for the 21st Century
The force behind economic development

Southeastern Wisconsin’s economy will come to a standstill without trained and capable workers. How will the new Milwaukee Area Workforce Investment Board grow a workforce in the hope of attracting jobs to our region? And what role will our technical colleges play?

Speakers:
Donald Sykes, president,
Milwaukee Area Workforce Investment Board
Dr. Darnell Cole, president,
Milwaukee Area Technical College

Wednesday, October 31, 2007
11:45 – 1:30
Hilton Milwaukee City Center
Monarch Ballroom
509 West Wisconsin Avenue

Forum members: $40
Non-members: $50

Reserve your place now by clicking here

Changes or cancellations will be accepted until Monday, October 29.
No refunds will be given after that date.

Try balancing the budget yourself

If I were a Wisconsin legislator, tired from the lack of progress in passing the 2007-2009 state budget, it might be fun to direct my angry constituents to a website that would allow them to try balancing the budget themselves.

This is exactly the option for Californians. By going here, you, too, can try to balance California's state budget by making a series of key decisions on both the revenue and expenditure side of the budget equation. In their own word's...

Next Ten is inviting all Californians to take the Budget Challenge, a nonpartisan Internet tool that lets you roll up your sleeves and create your own state budget. You call the shots on how much to spend on schools, the environment, healthcare, prisons and other state programs – and how to pay for them.

I tried to balance California's state budget and...I failed.

I ended up raising taxes across the board while cutting into health care for retired workers, capping the rate of growth at state universities, and reducing parole supervision. All that got me was a projected $1.2 billion dollar deficit and, presumably, a one-way ticket out of office.

Folks, it ain't easy.

Thus far, over 40,000 people have tried to balance the State of California's budget through this unique web-based tool. I would imagine that while many have failed, all have garnered a new appreciation for how hard it is to do just the minimum - maintain services and keep taxes under control. In an era when the public and the media are blamed for lack of engagement in the budget process, it makes me think that this type of educational tool could be a beneficial exercise for everyone in Wisconsin.

The Infrastructure-Police Tug of War

Sunday’s expose in the Milwaukee Journal Sentinel on city police overtime raised questions about management choices over the past couple of years. But a bigger picture of shifting priorities emerges when the analysis spans the longer term. Over the past several decades, the police department has gobbled an ever-increasing piece of the city’s financial pie.

Mayor Barrett’s proposed 2008 budget calls for $575 million in spending on general city purposes. Most of the money will go to the police ($217 million) and fire ($97 million) departments. Compare that to 60 years ago, when police accounted for less than 20% of city spending and nearly half went to public works, largely to develop and maintain the city’s infrastructure. Put another way, public works spending was well over double police spending in 1947; today we spend twice as much on police as on public works.

Obviously many factors help explain this dramatic change. What’s constant over the years is that about three-quarters of city tax money supports just three functions of municipal government: police, fire and public works. In the long run, the police department has dominated, infrastructure gets a smaller piece of the pie, and the relentless trend raises a red flag about the city’s long-term capacity to provide for the infrastructure that underlies economic growth.

Market forces and preschool

One of the paradoxes of early childhood education (ECE) policy is that ECE doesn't seem to obey the normal economic rules of supply and demand. If high quality ECE is so valuable, why is there a proliferation of poor quality providers? Isn't high quality ECE in demand?

The answer is that high quality ECE is expensive. This is a labor-intensive industry and to attract and retain highly qualified teachers, wages and benefits must be higher than in competing industries. In addition, developmentally appropriate, safe, and sturdy equipment and supplies are expensive as well. Developmentally appropriate facilities are also costly. (My example is usually the child-sized toilets and sinks you'll find in well-designed child care centers.) And, of course, one cannot overlook the importance of fresh and nutritious food, adequate outdoor play space, or enrichment activities such as field trips.

It's no wonder that many local child care providers and preschools cannot afford to offer all these elements. And while there are some that do, most parents cannot afford to pay the resulting tuition.

So maybe the rules of supply and demand do hold true...but there just aren't enough parents here who can afford to be demanding.

An eye-popping ABC News/Forbes.com story illustrates this: In larger cities like New York and San Francisco, there are enough parents able and willing to pay preschool tuitions rivaling those of Ivy League colleges. These preschools are able to charge over $25,000 per year and have waiting lists for enrollment.

So it seems, when a critical mass of parents able to afford highest quality is present, the market will respond and offer that quality, at the highest price the market will bear.

The challenge for cities like Milwaukee, where that critical mass isn't present, is to find ways to provide high quality more cost effectively and/or to improve parents' ability to pay for higher quality. Neither of these options is easy. The most effective cut is to labor costs, but that will impact quality directly. Improving parents' ability to pay means increasing their wages, a long-term tactic, or subsidizing tuition, a short-term tactic. What we've found here in Wisconsin is that tuition subsidies have not resulted in increased quality because they can be used even at lower quality providers.

While no one wants Milwaukee parents to be put in the position of signing up for preschool while their child is still in utero, and then spending 3/4ths of the median household income on tuition, it would be nice if more parents were able to demand higher quality ECE and/or more providers were able to offer it. Early next year the Forum will release a report analyzing the ways in which other jurisdictions have tried to help their ECE markets develop.