Who says MPS needs more accountability?

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


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


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


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

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

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

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


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


• Timely and regularly reporting fiscal data and projections to the public in easily understood terms

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

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

NYC inspired by Milwaukee

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

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

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

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

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

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

PPF Pearls: Mayoral takeover of schools

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

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

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

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


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


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


• Turning around struggling schools--intervening in the lowest-performing schools and districts, increasing the supply of high-quality charter schools, and turning around struggling schools.

In addition, a specific draft criterion would require the state to demonstrate that education is a funding priority by not cutting K-12 aid from 2008 levels. Other factors to be considered are the support of the teachers unions and the state's progress toward closing the racial achievement gap.

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

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

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

Slow growth in property values could mean higher tax rates

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


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


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


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

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

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

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

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

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

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

MPS teachers link preschool to better performance in Kindergarten

Survey results released today by the Public Policy Forum conclude that MPS Kindergarten teachers feel high quality early childhood education can have positive impacts on school readiness and academic performance. The survey is part of the Forum's three-year research project investigating the impacts of high quality early childhood education on economic development.

Of the 77 five-year-old Kindergarten (K5) teachers surveyed, nearly all (97%) feel they can generally tell early in the school year which of their students attended preschool or four-year-old Kindergarten (K4), and a similar portion (93%) feel attending preschool or K4 better prepares students for K5. All teachers feel spending time in preschool or K4 prior to starting K5 is important.

With regard to the specific skills deemed necessary for Kindergarten, teachers report that the skills that are more difficult to impact during the K5 year are the skills that students are more likely to lack upon entering Kindergarten--skills pertaining to social/emotional development and cognition/general knowledge. However, teachers feel that high quality early childhood education can help children get ready for school in these hard-to-impact skills groups and believe the effects last through K5 and beyond.

When asked about their 2008-2009 class of K5 students, 45% of the teachers surveyed report having classrooms in which at least 80% of the students had attended preschool or K4, and 54% report that at least half of their students were adequately prepared for K5. However, teachers in schools with student poverty rates above the district average are significantly less likely than teachers in lower-poverty schools to report that the majority of their students had attended preschool or were adequately prepared for Kindergarten.

The survey’s reinforcement of the connection between the quality of early childhood education and school readiness suggests that policymakers seeking to improve academic performance in MPS may wish to consider ways to increase quality early childhood opportunities for Milwaukee children. Because there appear to be links between poverty and preschool attendance and between poverty and school readiness, another area of focus may be accessibility and affordability of high quality early childhood education specifically for low-income families, as well as the quality of programs currently available and affordable to these families.

The full report is available for download here.

PPF Pearls: Addressing Milwaukee County's transit crisis

The more things change, the more they stay the same when it comes to Milwaukee County's mass transit debate.

In the wake of Governor Doyle's veto of a Milwaukee County-only transit authority with sales tax authority, the county's struggling transit system submitted a report to the County Board last week projecting huge deficits beginning in 2011, as well as significant service cuts to bridge a smaller gap in 2010. Not coincidentally, the projected budget gaps are eerily similar to those projected by the Public Policy Forum in our May 2008 report, "Milwaukee County's Transit Crisis: How did we get here, and what do we do now?"

The updated transit budget projections cite the need for an additional $11.4 million in county property tax levy in 2011, $19.9 million in 2012 and $24 million in 2013 to maintain proposed 2010 service levels and fare structures and conduct needed bus replacement over a four-year period. Our May 2008 report projected gaps of $18 million, $24 million and $21 million in the three years following the next budget (2010-2012).

Of note is that we did not factor in the receipt of $25.6 million in federal stimulus funds for new buses nor the significant service cuts proposed for 2010, and we used a three-year bus replacement schedule. The deficits projected by transit officials would be even higher than our original projections if not for those factors.

But perhaps even more indicative of the extent to which little has changed is the following passage from our 2008 report, in which we suggest the need for a "triage" approach to stabilize the system's finances and service in the short-term:

"The underlying philosophy of this approach is that while a comprehensive, dedicated funding source appears necessary to permanently address MCTS’ structural budget problems, it is uncertain when and whether this approach will actually happen...In the meantime, the data indicate it is critical to hold the line on fare increases and service cuts for at least the next two to four years to help stabilize or even begin to grow ridership, and to take other prudent steps to reduce the magnitude of a full-fledged funding crisis when significant bus purchases are required."

In light of the significant service cuts proposed for 2010 - which include the elimination of all freeway flyer service - and the continued uncertainty of a state-authorized funding solution, policymakers may wish to re-read our discussion of the need for and components of a triage strategy that could be pursued without state legislation. There are short-term strategies that local policymakers can consider on their own, if they have the will to do so.

New Milwaukee effort avoids the pitfall of recreating suburbs

It is an uphill battle to revitalize downtown retail in this economy, but Milwaukee’s downtown Business Improvement District is responding by hiring Deanna Inniss to recruit retailers to the city.

One may question why her list of tasks, as reported by the Journal Sentinel, does not include the troubled Shops of Grand Avenue on Wisconsin Ave., and why she does not plan to recruit big box stores. A glance into Minneapolis’ experience with downtown retail indicates there may be sound reasons for such an approach.

The Minneapolis equivalent of the Shops of Grand Avenue is a $150 million development called Block E. Completed in 2002 with $39 million in city subsidies, the retail and entertainment complex was to revitalize a key downtown block and lure suburban shoppers to the city center. It has some features that many in Milwaukee would envy: the light rail line is just a few blocks away, and its complex contains a hotel, a 15-screen movie theater, restaurants, an arcade, and a bowling alley. It is within one block of popular downtown sporting events, a main music venue, and many nightclubs.

The debate over how to best draw people from the suburbs to spend their time and money in Milwaukee's downtown has included arguments for similar investments here: a light rail line, some brand new development with substantial city investment, and anchor stores like a movie theater and arcade. But despite having all of those things in Minneapolis, the 30% vacancy in Milwaukee’s downtown mall ends up being an exact match for the projected vacancy in Block E.

Recent coverage about Block E in the Minneapolis Star Tribune included “Downtown complex gets a C for challenged,” “’E’ may stand for ‘emptier’,” and a columnist whose opinion was summed up in the headline as, “Block E: Let’s put it out of its misery.” Crime outside Block E is an issue, its Borders bookstore closed, its nightclub closed, and major tenant Sega Gameworks just announced it will sublease its space due to declining revenue. In addition, few buildings in Minneapolis have produced such outspoken hatred regarding architectural choices. Block E’s new construction has been referred to by columnist James Lileks, who advocates a full tear-down, as a “faux-historical façade … the architectural version of the elephant designed by a committee.” One online commenter called it "a suburban eyesore." The end result is that many downtown convention-goers bypass Block E in favor of taking light rail to the suburban Mall of America.

By focusing on recruiting small independent street retailers that are unique to downtown, Milwaukee's Business Improvement District may avoid some of the pitfalls experienced by Minneapolis. The more difficult question is posed in a Journal Sentinel editorial board blog post: "OK, but what to do about Grand Avenue Mall?" There appear to be no easy answers for that. Trying to create a suburban mall experience in a downtown setting has been problematic here and elsewhere; perhaps capitalizing on the diverse street-level hustle and bustle of city life could hold promise for Milwaukee’s downtown.