Barrett Pleads for Businesses to Support Residency Rules
It's in your self-interest to lobby against this law, Barrett tells businesses.
“I still feel very strongly about the residency requirement on many, many levels,” Mayor Tom Barrett says. This was during a recent interview with this reporter at his City Hall office.
He was particularly concerned that the proposal to prohibit municipalities from having residency requirements is part of the budget bill rather than free-standing bill by itself. The legislature refused to even permit a motion to removing this provision from the budget bill. The residency requirement was among 58 other non-fiscal policy items included in the Scott Walker budget bill identified by the Legislative Fiscal Bureau.
But none could have as deleterious effect as the change in the residency law. The mayor feels it could spell the death of the city if hordes of public safety officers leave the city. The ripple effect could challenge the city’s very ability to pay the wages and pension benefits of those employees. And, it could add untold millions of additional expenses since it would remove what the mayor feels is one of his few remaining bargaining chips, since police and fire unions were not exempted from collective bargaining, as were other city employees.
His reasoning goes like this: “[In 2011] the Governor made the decision to require [most] employees to pay into their pension accounts. The governor also decided to take away their bargaining rights. But the Governor retained those [bargaining] rights for public safety employees. … By retaining the rights to the Police Department and the Fire Department, he has endorsed the concept of collective bargaining for those individuals.”
But the concept of collective bargaining implies that each side brings something to the table, so that neither party can dominate the other. Barrett says the residency requirement is one of his negotiating tools. In fact, it is one of his biggest tools.
One reason the mayor can afford to pay his public safety workers an average of $65,649 [police] and $67,554 [fire department] is that by requiring them to reside in the city, their $177 million collective income helps support the city, though payment of local property taxes and spending at local businesses that in turn may pay taxes directly to the city or may employ people who may also pay taxes to the city.
That money has become all the more important as state shared revenue payments to Milwaukee have declined. Back in 1995, the city’s $224 million shared revenue payment was sufficient to fund the entire police and fire department budgets, with some money left over; today, it falls $114 million short. If the police and firefighters move out, where will the Mayor find the money to pay for these essential services? he wonders. Increasing the tax burden on remaining citizens and businesses would be the only option in the absence of other revenue sources, and this would only exacerbate a downward spiral.
If the police and fire department employees tend to live in a home of average value here, which the city assessor puts at $100,844, the city portion of their property tax would amount to about $3 million. The Milwaukee Public Schools allotment would be even more, say, $3,227,613. That is another $6,000,000 plus that Barrett can use to pay to hire police and fire fighters and run the schools, and another reason why the residency requirement is a key bargaining tool, he says.
“If business people are unhappy about the level of benefits and taxes they pay, then they have to be aware that in collective bargaining, one of my most effective bargaining tools is residency. Why should I give this up for nothing?” the mayor adds. “What business would allow itself to be forced into this position without some form of compensation?”
Barrett points out that 60 percent of the city’s tax revenue goes to the Police and Fire Department, which also account for 69 per cent of the city’s pension liability.
Speaking of the Republicans in general and the business establishment in particular, “How can they complain about taxes if they are taking away one of my most important tools and giving it away for nothing?” he asks.
“From virtually every angle — Democrat, Republican or policy, it is the wrong thing to do,” Barrett said, issuing a call for the city’s business leaders to join in some non-profits’ calls to retain the residency rule.
“Businesses in this city who are not speaking out are acting contrary to their self-interest,” he says.
On Tuesday, April 30th, 2013, Barrett asked citizens to link to his website to find out how to file an objection to the residency plan with their legislators.
Wisconsin Paperboard Rebrands
The Wisconsin Paperboard Factory at 1514 E. Thomas Street is an East Side anomaly. It is the only industrial property of any account on the East Side, and certainly the only one operating on the banks of the Milwaukee River, where its 18-acre site is the same size as the White House grounds. The huge building that sits on the site operates 24/7, recycling mostly scrap paperboard and turning it into mostly new paperboard.
The property has been owned and operated for years by the Newark Group, founded in 1912. Today, the company unveiled a new logo. “Our new logo communicates what Newark stands for today,” says Newark CEO and President Frank Papa. “This is not the same company it was a few short years ago; we have invested in new talent and new equipment to better serve our customers and vendors, and become a leader in this industry.”
Papa understates the changes at Newark considerably. What has happened there is nothing short of a coup, with the controlling family banished from the firm, and its history. For years, the Newark Group was headed by Edward K. Mullen, who assembled paper mills and recycling centers around the globe into his privately owned business. He was listed in corporate documents as the “principal stockholder” of the concern. Later, the reins were turned over to his son, Robert H. Mullen, who assumed the titles of CEO, President and Chairman of the Board in 2004.
Things looked very good then for young Mullen, who joined the firm in 1984, after receiving his BA in Philosophy and Physics. (While a college student, he spent one summer working at the plant in Milwaukee. He told a co-worker that he wanted to become a physicist. “Then why in the hell are you working in a paper factory?” the worker responded, knowing full well it was because dad owned the place, and the son was the heir-apparent.)
But as the company expanded, it acquired significant debt. In 2008, things began spiraling out of control when the company’s bond rating was reduced to junk status. In June, 2010, the company filed for Chapter 11 bankruptcy, from which it emerged a mere 51 days later. “We emerge from Chapter 11 a well capitalized private company with a much improved operating profile,” Mullen said.
Meanwhile, as the Milwaukee plant, a non-union concern, continued to pump profits into the company, the Newark Group closed a number of other facilities around the country. Then, on May 20th, 2011, the board of directors “accepted the resignation” of Robert Mullen as CEO, President and Chief Executive Officer of Newark Group, and the Mullen family completely disappeared from the website history of the Newark Group. Robert H. Mullen became president of TTA Marine in June 2012. In his biography on the website of the New York-based maritime services company, he makes no mention of the Newark Group by name, or that he was the son of its principal owner, and presumably its heir.
It reads, instead, quite simply: “He began his career as a trainee in an entry level manufacturing job. He worked his way through many sales and manufacturing roles ultimately becoming the CEO.”
What’s It Worth?
Thanks to a tax court ruling known as the “Newark Decision,” all real estate, buildings, improvement and equipment are exempt from taxation if waste treatment is performed on the site. This 2005 ruling vastly expanded a 1953 rule and effectively removed the Wisconsin Paperboard Company’s Thomas Avenue plant from the real estate rolls. There is only a nominal $100 value placed on the hundreds of thousands of square feet of improvements at the plant. The land, however, is not exempt from taxation, and is valued at $6,216,900, and produced 2012 tax revenue of $104,547.33, which the cash-strapped company pays on the installment plan.
Of Bars and Licenses
The Milwaukee Common Council has introduced a series of changes in the laws for Class “B” Tavern licenses. Registered agents now have a grab bag of entertainment options to select from on their applications. And there is increasing neighborhood scrutiny of tavern licenses, with particular concern on the East Side these days about “Pub Crawls.” For example, Patricia Jensen, who hopes to operate Glass Nickel pizza at 1504 E. North Ave., the site of the short-lived Clutch, promised that she would sponsor no pub crawls at her establishment. This helped gain the approval of the East Bank Neighborhood Association, represented by its president, Andrea Rowe Richards, a former Department of City Development spokesperson and wife of Rep. Jon Richards.
Ms. Richards also gave the neighborhood group’s thumbs up to Kyle Y. Johnson, who hopes to open the Irish Genie on the banks of the Milwaukee River, at 1431 E. North Ave. This site, at the foot of the North Avenue Bridge, was the longtime location of Judge’s Irish Pub. “No pub crawl,” Johnson promised the Licenses Committee, under the charge of Chairman Anthony Zielinski. (But the bar does plan to have two mini-bowling lanes — take that Koz’s Mini Bowl!) … On the other side of the river, where collegiate pub crawls are not so much of an issue, Tommy Harris plans to open Bosses Lounge at 408 E. North Ave. … Meanwhile, an extended hours license for Shubh Mobil gas station, 714 N. 27th St., was denied after police and neighborhood objections, one of the objectors being Ald. Bob Bauman, who has long been vocal in criticizing this place as a blighting influence in his district.
People: Tom Barrett
Building(s): Wisconsin Paperboard Factory
Government: City Licenses Committee
Neighborhood(s): East Side, Riverside Park