All the king’s horses
When local business leader and big-time philanthropist Sheldon Lubar received the Headliner Award from the Milwaukee Press Club this past spring, he made some scathing observations about the challenges facing Milwaukee to a room full of 300 of the region’s leading journalists. It’s a topic on which he is well-qualified to speak. The founder of Lubar Investments and namesake of UWM’s Sheldon B. Lubar School of Business, Lubar has spent much of the last year serving as co-chair of two committees charged with studying Milwaukee County finances, one set up by Governor Doyle and the other a standing committee of the Greater Milwaukee Committee, both of which have published their reports in the last several months to disappointingly little fanfare in the press. Lubar has spent much of the last year serving as co-chair of two committees charged with studying Milwaukee County finances, one set up by Governor Doyle and the other a standing committee of the Greater Milwaukee Committee, both of which have published their reports in the last several months to disappointingly little fanfare in the press.
“I would expect that you are all familiar with what we found: generous under-funded pensions, generous and under-funded health care, outdated management systems, elected officials that barely communicate with one another, duplication of services and, perhaps most serious, multiple non-elected boards and commissions with taxing authority,” he said in his acceptance speech.
“Sadly, I can tell you that the well-intentioned leaders I worked with [on the reports] are as frustrated as you and I, but feel powerless to change the system,” said Lubar bluntly.
Not a pretty picture, to be sure, and one that we’ve been hearing about fairly regularly recently. But Lubar’s candid description of the failure of our leaders to respond to these challenges was refreshing and his proposed solution was so radical in nature that it snapped me to attention.
Lubar believes nothing short of a dramatic restructuring of the way our public institutions are organized and operate is necessary to address what he called, during a telephone interview, the region’s “dysfunctional governance.”
According to both reports (and some would say the naked eye), the duplication of services and lack of accountability between Milwaukee County and City and 17 other municipalities, as well as MPS, MMSC, MATC, the Wisconsin Center District and other semi-autonomous, quasi-governmental entities leads to a daunting amount of waste and inefficiency.
The final report of the Greater Milwaukee Committee’s Task Force on Milwaukee County, issued last fall, point to a number of examples:
To find out how many governments it takes to mow the grass, stand on the corner of Newberry Boulevard and Oakland Avenue. The city of Milwaukee is responsible for mowing the grass on Newberry, the county mows the grass in Riverside Park just to the west and, to add insult to injury, Milwaukee Public Schools mows the grass at Riverside High School just steps away.
Ever wondered how many governments it takes to put out a fire? The city of Milwaukee has one of the best fire departments in the country, yet Milwaukee County operates a single battalion fire department, at a cost of $6 million, whose sole purpose is protecting the secured area at Mitchell Airport. If there’s a fire in a public area, the call goes to the city. That’s two fire departments, each serving separate areas of one airport.
There are more than a dozen other examples of duplicative overhead services provided by the county, ranging from policing to accounting, per the GMC report.
According to Lubar, “This is no way to run an enterprise.”
Of course the devil is in the details, but regional approaches to the coordination and delivery of government services have been working elsewhere – in the Denver and Portland regions, for example – for decades. Here, the concept of regionalism has been given a lot of lip service. But there’s little to show for it.
The Greater Milwaukee Committee and the Metropolitan Milwaukee Association of Commerce have organized the Milwaukee 7 initiative, an effort intended to develop a unified economic vision for Kenosha, Milwaukee, Ozaukee, Racine, Walworth, Washington and Waukesha counties and, more importantly, a plan to get there.
The Milwaukee 7 initiative has identified a variety of assets, including access to fresh water, location between Chicago and Madison, cultural diversity and a skilled labor force that present a unique overall opportunity for the region’s prosperity, creating an attractive environment for technology-driven, innovative manufacturers, or “Next Generation Manufacturing” businesses.
But before that vision can hope to materialize, abundant partisanship and turf issues between the state and the involved parties must be resolved. Overall, the Milwaukee 7 initiative is a worthwhile concept, according to Lubar, but it’s no substitute for what he believes is necessary.
“Metropolitan government works elsewhere,” Lubar says. “But there’s no political leadership supporting it here.”
“We need to rethink the entire tax structure in the state to bring us into the 21st century,” says Lubar. “It’s simply unacceptable that we have a county executive whose only statement about anything is ‘No tax increases’.”
In Wisconsin, city and county governments hold their authority at the pleasure of the state, so if sweeping change is to be implemented it can only come through the action of the governor and the legislature. But Lubar feels this is unlikely to happen without a direct request from local government leaders.
“My experience is that our leaders, all of them, the county supervisors, county executive, chairman of the county board of supervisors, the mayor, the aldermen – all decent, honest and hardworking – they all agree, but they throw their hands up and say, ‘What can I do?’
“They need to get some starch in their backbones and make some tough decisions,” he concluded.
Let’s hold our breath and see if that happens. VS
GMC Report Findings
Two independent groups were convened since 2005 to study the financial challenges facing Milwaukee County and propose recommendations.
The first group, established in the fall of 2005 by the Greater Milwaukee Committee, a civic group made up of local business, professional and nonprofit leaders, was chaired by Sheldon Lubar and Chris Abele. Named the Quality of Life Task Force, it was initially charged with examining the fiscal condition of the county’s key cultural assets, but expanded its focus in 2006 to include a comprehensive review of the county’s finances.
County Executive Scott Walker invited increased scrutiny to the county’s predicament in the spring of 2006 with projections of a potential $89 million spending gap in 2007, possibly growing to nearly $260 million in 2011. His prediction that the county was on “a path to financial insolvency” led Governor Doyle to establish a State Task Force on Milwaukee County in June, 2006, chaired again by Lubar with then-Secretary of Revenue Michael Morgan and issuing its final report in December.
In many ways, the two sets of recommendations overlap. What follows is a summary of the GMC task force’s recommendations, many of which also appear in the Governor’s task force report:
• Lower active employee and retiree health care costs. Milwaukee County should modify its current health insurance program to include: a) incentives for plan enrollees to select the lowest cost plan; b) a multi-tiered premium contribution, with all tiers having comparable benefits; c) a transparent Pharmacy Benefit Manager; d) a prescription drug coverage “carve out;” e) disease management and wellness programs; and f) that the Milwaukee County Transit System follow the revised Milwaukee County health care plan and cease the practice of offering lifetime health insurance benefits.
• Pay the State of Wisconsin to take over pieces of the criminal justice system.
• Replace current pension liabilities with Pension Obligation Bonds.
• Review all county-owned assets. Specifically, the task force sees the need to develop “a coherent, defensible, and widely supported policy for disposing of unneeded and under/unused non-parkland assets.”
• Coordination of services through intergovernmental agreements.
• Governance review recommendations. To address what it sees as alarming degrees of redundancy in services and non-elected boards and commissions with taxing authority, the task force recommends a study of a single elected board or committee governance structure that would bring more accountability, coordinated planning and oversight to those entities. It also recommends researching “a multi-governmental shared service delivery through intergovernmental agreements resulting in uniform quality of service at a reasonable cost to residents and taxpayers.”
The GMC report concludes:
“We found that while budget restructuring is daunting, it is doable. The greater lesson is the ineffectiveness of our current business practices in government for delivering public services to our residents.
“The other grave concern is the inability of our elected County officials to overcome the current divisiveness and distrust to actually govern and manage our County and its very critical public services. We look to our County leadership to step up to the challenge, set aside the past squabbles and attacks and focus instead on the difficult decisions needed to turn around the County’s very vulnerable fiscal position.”
To see the reports of the two task forces, go to: www.revenue.wi.gov/news/milwwco/index.html.
