Region's property taxes kept under control in 2011

The Public Policy Forum's annual analysis of property values and property taxes in the seven-county southeast Wisconsin region - released this morning - finds that the amount of gross property taxes levied by local governments, school districts, technical colleges, special districts and other entities across the region increased by just 1.5% in 2011. That's the lowest year-to-year increase since at least 2000, and well below the 10-year average of 4.3%.

The relatively small increase in total levies, however, was accompanied by a 6% increase in the aggregated gross tax rate for municipalities and school districts in the region, from $20.36 per $1,000 of property value in 2010 to $21.58 in 2011.

For those who might be confused about how levies could increase only slightly when rates increased substantially, the key is property values. A municipality’s tax levy is determined by both the total property value in the municipality and the tax rate that is applied to that value.

Because property values decreased 4.2% between 2009 and 2010, local taxing entities needed to collectively increase the tax rate by $1.22 to realize the 1.5% increase in the amount of property tax levied. Conversely, five years ago, when property values in southeast Wisconsin increased nearly 11%, the region’s local governments and school districts were able to collectively increase tax levies by 5%, while at the same time decreasing the aggregate tax rate by $1.10 per $1,000 of assessed value.

The relatively small property tax increase is good news for taxpayers, but the report points out that it also may raise questions regarding the capacity of the property tax to support desired levels of local government services. Indeed, such annual increases are likely to become the norm – even after the economy rebounds – in light of strict new property tax limits adopted by state government.

Whether the breadth and quality of local government services will suffer with lower property tax capacity remains to be seen. This is an issue that bears watching, however, and one that may produce a need for renewed debate and discussion of revenue diversification for local governments and school districts in Wisconsin, strategies to share or consolidate local government and school district services, or acceptance of lower service levels.

The full report can be accessed here, and our media release here.

Apps for Milwaukee

The open government data movement is a global effort to increase government transparency, civic participation and innovation through public access to municipal data. In the age of the ubiquitous software application (app) for use via personal computer or mobile device, governments around the world are profiting from the creativity of tech-savvy citizens by making data available for the development of useful apps. Since 2008, several U.S. cities, including Washington D.C., San Francisco, and, most notably, Chicago, have started to share government data and even sponsor competitions to encourage the creation of innovative local apps.

Could open government data improve quality of life in Milwaukee? Perhaps Chicago’s experience will help answer that question. Apps for Metro Chicago, which launched on June 24th, is currently accepting submissions for the first of three rounds of competition. The first round seeks apps aimed at improving transportation in the Chicago metro area, with subsequent rounds focusing more broadly on solving community problems and improving services. With $50,000 in prizes, the public will help to choose the winners by voting for the apps they believe are most useful.

Apps for Metro Chicago is the first competition of its kind to involve four levels of government: the City of Chicago, Cook County, the Chicago Metropolitan Agency for Planning, and the State of Illinois. Together, these governments have made more than 175 data sets available to the public in an open format. These data sets range from municipal service requests to hospital information to neighborhood demographics.

Chicago’s competition is also unique in its emphasis on rewarding civic value. The judges will grant bonuses for participants who partner with a business or nonprofit to solve a real, local problem. As the competition’s website states, “the key to winning this contest is to demonstrate that you have created something useful for our community.”

In addition to rewarding community partnerships in the judging phase of the competition, Apps for Metro Chicago is actively helping to connect community organizations looking to solve specific problems with citizens with the skills to create apps. Metro Chicago Information Center (MCIC), the research and consulting group coordinating the competition, is working to make these kinds of connections. One interesting partnership is a collaboration between a local industrial retention initiative and an app developer to write a truck routing app that takes into account weight limits, clearances, road blockages, and other factors to improve the efficiency of distribution.

The accessibility of government data in Milwaukee certainly would impact the replication of a similar competition here. The City of Milwaukee has COMPASS and Map Milwaukee, useful web-based tools that provide municipal data on local demographics, property, crime, traffic accidents and more. These applications allow Milwaukeeans to query information and create maps, but the data is not in an open format and thus cannot be easily reused and shared. The Nonprofit Center of Milwaukee also makes a limited number of data sets available for public use, including information on neighborhood demographics, crime, and geography. Their Data Center also provides technical assistance to the public to help make the data easier to understand and utilize.

One Milwaukee-specific app that has already been developed is the Milwaukee County Transit System (MCTS) bus tracker, which estimates bus arrival times. It can be downloaded for iPhone or Android mobile phones. While certainly a useful tool, the bus tracker tool bases its estimates on set route schedules and could be improved by utilizing the GPS technology already used by MCTS buses to report arrival estimates in real time. Similar real time apps have been created in many U.S. cities, including Chicago.

If the city, county, and other government bodies opened their data sets to public use, the possibilities could be endless. Judging by developments in other cities, it is possible to imagine apps that allow us to find out what’s happening in Milwaukee neighborhoods on a given day along with information on where we can park our bicycle or car nearby, report potholes on our streets and receive notification of repairs, or keep us updated on how our representatives at all levels of government vote on important issues.

With resources like COMPASS, Map Milwaukee, and the Nonprofit Center of Milwaukee’s Data Center, Milwaukee is in a good position to take the next step by making more municipal data available in an open format. Creatively using such data could be a simple and cost effective way to make government more useful to today’s tech-savvy citizenry.

Milwaukee County's alarming budget prognosis

For those who hoped the changes to collective bargaining or the arrival of a new county executive might finally solve Milwaukee County's longstanding fiscal problems, we are sorry to disappoint. The Public Policy Forum's 2012 Milwaukee County Budget Preview report - released this morning - shows the county's budget prognosis actually has worsened since last year, leaving it with "few remaining strategies outside of deep service cuts and/or sharp revenue increases."

This is our first report analyzing Milwaukee County's finances since the adoption of the state budget repair bill and 2011-13 state budget. Our analysis confirms that the county realizes substantial savings from the budget repair bill's labor provisions, likely exceeding $24 million in 2012. Unfortunately, about $17 million of those savings already were built into the county’s base budget in 2010 and 2011. Thus, while the net savings of $7 million for 2012 are significant, they do not come close to offsetting the nearly $29 million in state aid reductions contained in the latest state budget.

Additional key findings and observations from the report:

• Our modeling of several approaches for bridging an estimated $38 million 2012 gap shows potentially stark impacts for county employees, services, programs, and/or taxpayers. Those include deep cuts in mass transit and community-based mental health and disabilities services; severe reductions in parks and cultural amenities and exhibits; and additional reductions in health care benefits that could greatly exceed those imposed on other public sector workers in Wisconsin.


• Because the county may have a one-time opportunity to boost its property tax levy by nearly $10 million in 2012, there is a limited timeframe to include significantly enhanced local revenues as part of the county's deficit-reduction strategy. The only other local broad-based tax or fee available to the county is the vehicle registration fee, which could be used to generate additional revenue for transit or other transportation needs, but which has generated considerable political opposition.


• A five-year fiscal outlook prepared by the county before adoption of the 2011-13 state budget showed a noticeable improvement over the five-year forecast from a year ago. Once the impacts of state aid reductions from the state budget were plugged into the model, however, the county’s five-year outlook became even worse than that forecasted in 2010, despite the budget repair bill’s provisions giving the county unilateral control over many labor and benefit costs.

The report concludes by noting that because the county now has greater certainty and flexibility with regard to its employee compensation framework, its ability to engage in strategic planning has been greatly enhanced. While that won't make the tough decisions any easier, it does allow county officials to reliably size up their fiscal situation and, ideally, finally reach consensus on a realistic scope of county services going forward.

The full report can be accessed here, and our media release here.

People Speak poll: High rates of satisfaction with municipal services

The latest edition of the People Speak poll, released today, finds that residents of southeast Wisconsin are mostly satisfied with the services they receieve from their city, town, or village government. The poll, conducted in late June and early July, surveys 391 adult residents of Milwaukee, Ozaukee, Washington, and Waukesha Counties.

The majority of survey respondents also report feeling their municipal government is a good value. The overall perception of local government's value is mostly unchanged from 2001, the last time we polled on this issue.

Other highlights:

• High rates of satisfaction with municipal service quality (89% are satisfied), types of municipal services (85%), and access to municipal services (87%). Lower rates of satisfaction with the cost of municipal services (67%).


• When asked to name the most important municipal service, 34% of respondents named a public safety service such as police or fire. About half (51%) of these respondents feel public safety services are best provided by individual municipalities, 17% feel they are best provided collaboratively by two or more municipalities, and 23% feel they are best provided by county government.


• The sharing of municipal services across municipal boundaries is seen by a majority respondents as a likely way to cut costs. The percent of respondents saying service sharing is likely to save taxpayers money varies by the type of service.


• When asked whether they would support state policy to require or provide incentives for greater collaboration or consolidation among municipalities or school districts, a majority of respondents indicate they would oppose such legislation. Fifty-four percent would oppose state fiscal incentives to encourage municipal service sharing and 55% would oppose requiring consolidation of small school districts.

The People Speak is conducted by the Forum in partnership with the Center for Urban Initiatives and Research at UWM and The Business Journal Serving Greater Milwaukee. The latest poll was funded by UWM.

For complete poll results, see the People Speak website.

The tools in Milwaukee's revenue toolbox

As the Public Policy Forum’s 2010-2011 Norman N. Gill Civic Engagement Fellow, I have completed my year-long project that analyzed how local governments raise revenue. The report, The tools in Milwaukee's revenue toolbox, stems from a 2009 Forum report that assessed the fiscal health of the City of Milwaukee. That report found that the city is over-reliant on state shared revenue as its main revenue source, and handcuffed by rising fringe benefit costs for city employees and growing expenditure pressures associated with police and fire services (which account for more than one half of all city operating expenditures).

Under the recently adopted state budget repair bill, the city has been granted cost-saving “tools” that will allow it to impose greater fringe benefit cost-sharing for non-public safety city employees. Yet, some city officials and policymakers are unsure if these tools, because they exempt public safety employees and are coupled with a cut in state shared revenue, will be enough to alter the city’s fiscal predicament. Consequently, my project explores the other side of the debate – the revenue toolbox. It asks what alternative revenue structures exist in other cities, and whether they are suitable for Milwaukee.

To answer these questions, we researched 15 cities that are comparable to Milwaukee, analyzed each city’s budget, and compared how each city generates revenue. Our key finding was that Milwaukee relies heavily on intergovernmental revenue (i.e. state shared revenue) to fund its budget (46% of general budget revenue), while the comparison cities raise the bulk of their revenues via the use of broad-based sales, property, and/or income taxes. In fact, no other city relies on intergovernmental revenue for even a third of its budget, and the vast majority has a dependence of less than 10%. Meanwhile, Milwaukee’s use of broad-based taxation for only 20% of its general budget pales in comparison to the other cities, the vast majority of whom use broad-based taxes for more than half of their general budgets.

Given these findings, we next examined the sales, income and property tax and their potential application in Milwaukee if city leaders were authorized to use them to reduce reliance on state shared revenue. Some of the insights we gleaned are as follows:

• Because Wisconsin has a relatively low sales tax compared to other states, implementing a city sales tax of .01% to 1% would not put Milwaukee out of line with comparable cities nationally, and could benefit the city by requiring non-residents to contribute toward the cost of city services. Milwaukee does not have the ideal sales tax base, however, because of the comparably low amount of retail sales that take place in the city, and because of Milwaukee’s high poverty rate.


• A city tax on individual income would allow for the possibility of shielding the poor from tax liability through specific tax rates for different income groups, or the ability to utilize deductions and credits. Also, such a tax potentially could be applied to non-residents who work in the city as well as residents, thus providing a mechanism to collect revenue from non-residents who use city services. On the other hand, even without a local income tax, residents in Milwaukee already have a relatively high state income tax burden, and adding an additional layer of income taxation could be harmful to the attraction of residents and businesses.


• Using a property tax to fund a greater proportion of the city budget could allow for a more predictable revenue stream because local governments would have some ability to change the tax rate to meet expenditure needs or to accommodate a decline in property values. Yet, because Milwaukee has comparably low assessed property values, funding a larger portion of the general budget with property taxes would require Milwaukee to add substantially to its already high property tax rates.


• An option in which city leaders were allowed to pursue a better balance of revenue sources by implementing a 1.0% city sales tax would allow for a sizeable decrease in property tax rates and reduced reliance on state shared revenue.

In the end, the report demonstrates that there are no easy answers to the City of Milwaukee’s revenue dilemma. In the event that the cost-saving tools contained in the budget repair bill are not enough to address Milwaukee’s longstanding fiscal problems, however, it also shows that it may be helpful to consider a balanced revenue structure that is more comparable to the other cities we studied.

Special thanks to the Gill family for their generous support of this project through the Norman N. Gill Fellowship, and the Public Policy Forum for their assistance and guidance throughout the year.

A misplaced trust in leadership

There is a common presumption that when it comes to improving public school performance, constructive changes, whether originating at the top or the bottom, cannot take hold unless they are championed by the superintendent. The superintendent of the Atlanta Public School District is often cited as an example of the type of leadership that brings about dramatic improvement. Dr. Beverly Hall had one of the longest tenures of any large urban district superintendent, having led APS over 12 years. She won many national awards and accolades over those years and the Atlanta schools were on a steep trajectory of improvement.

Now, the Atlanta Journal-Constitution reports that trajectory was launched not by the vision of a strong leader, but was systematically manufactured by a superintendent who tolerated, and possibly encouraged, outright cheating by school staff on state standardized tests. The evidence, gathered by a governor's task force, is overwhelming, alarming, and shocking. The task force report names 178 educators, including 38 principals, as participants in cheating. More than 80 educators confessed to actions such as erasing students' wrong answers and changing them to correct answers. Cheating was confirmed in 44 of the 56 schools examined.

The consequences are yet unknown—Will Dr. Hall have to pay back performance bonuses earned by improved test scores? Will colleges stand behind acceptance decisions for which good test scores were a factor? Will the federal government hold the district accountable under the No Child Left Behind Act? Will criminal charges be brought? One clear result: Students who never learned their real scores lost opportunities to improve their weaknesses and build on their strengths.

Like the recently-exposed problems with the New York state exams, this cheating scandal raises questions about the wisdom of building education reforms around standardized tests. Some will use these developments as a reason to oppose merit pay for teachers, strengthening No Child Left Behind, or requiring private schools accepting voucher students to participate in the tests. Others will argue that a few bad actors cannot be allowed to spoil the best, albeit imperfect, method of monitoring school performance.

These opposing views each have a foothold in Wisconsin, which is currently in the process of developing a new standardized testing scheme. The public debate over the ways in which the new test is to be used for policymaking and accountability purposes is sure to be long and hard. But this debate gives rise to an opportunity to make Badgerland lemonade from other states’ lemons. Wisconsin could anticipate the potential for organized cheating on standardized tests and explicitly spell out the ways in which the Department of Public Instruction will monitor test security and integrity, and the penalties for cheating. For example, DPI might rule that any school turning in score sheets with wrong-to-right answer erasures numbering more than three standard deviations above the norm (statistically unlikely to have happened coincidentally) would trigger an automatic investigation.

Currently, according to DPI's policy and procedure manual, penalties for school staff found to be complicit in cheating are not regulated by the state; it is left to a district to administer any penalties according to local policy. The New York Times reports that in Atlanta, the school board was loath to criticize Dr. Hall, whom the directors felt had done much to improve the perception of their schools and city. Perhaps the lesson of Atlanta is that districts cannot be allowed to self-police as long as their test results are used to determine more than just student performance.

Time to consider a countywide comptroller in Milwaukee?

The announcement earlier this week by longtime City of Milwaukee Comptroller Wally Morics that he will not run for re-election in 2012 creates a vacancy in one of our region's most important, but least understood, elected public offices.

The comptroller essentially functions as the chief financial officer for city government, exercising fiscal control, per the city Web site, "over the activities of approximately 40 city departments and agencies." Perhaps most important, the comptroller's office sets the tone for fiscal responsibility and accountability in city government. It does so by establishing accounting policies and procedures for all city departments; overseeing the city's debt portfolio (which exceeds $750 million); administering all federal and state grants; reviewing all proposed development projects involving city economic development tools; conducting audits of internal city functions; and certifying all revenue figures used in the annual city budget.

In an August 2009 report, the Public Policy Forum found that despite serious fiscal challenges, the city "by most any standard...is financially well run." In many respects, that is attributable to a chief financial officer position that not only is specifically charged with ensuring that the city's finances are responsibly, accurately, and transparently managed, but also one that, because of its independently elected status, can do so without fear of recrimination from other city leaders.

The Forum also has opined, in several of its recent reports on the finances of Milwaukee County government, that the absence of a similarly charged independent controller's office in that government has contributed to its financial difficulties. Consequently, in light of Mr. Morics' impending retirement, is it worth considering whether the elected city comptroller should be transformed into an elected countywide position that would fulfill the same fiscal oversight functions for both city and county government?

Admittedly, questions of home rule, statutory and logistical issues, and turf concerns would make such a proposition difficult to implement, particularly in time for the April 2012 election cycle. But among the potential benefits of such a move - in addition to giving the county the type of independent fiscal oversight it has long needed - would be the following:

• Combining certain city and county accounting and internal audit functions within one office could promote greater quality and efficiency, and perhaps save money by allowing for staff reductions and/or merged financial management and payroll systems.


• An independent office overseeing the financial affairs of both governments would be able to provide greater perspective on regional infrastructure needs and priorities, and how they should be funded. This is counter to the existing state of affairs, in which each government issues long-term debt for capital projects without knowledge or concern about the other's borrowing decisions.


• This could be a significant initial step toward far greater city-county cooperation, as having common fiscal policies and procedures and a unified set of accountants could make it much easier to consolidate other services down the road. The professionals working in a consolidated comptroller's office also could be a source for new ideas on how to consolidate other "back office" functions, such as information technology, human resources, health care administration, procurement, etc.


• A joint city-county comptroller's office might even be able to provide accounting, audit, payroll or financial management services to other Milwaukee County municipalities at a price that would save money for the municipalities.

Again, while this idea would require substantial additional research and deliberation, doing so would be consistent with the shared services and consolidation discussions that are occurring with increasing frequency among the new county executive and local municipal leaders. If ever there were a time when such an idea should be considered, it would appear to be now.