Milwaukee Biz Blog

Editor's note: This is the response of Tim Sheehy, president of the Metropolitan Milwaukee Association of Commerce (MMAC), to a previous blog (headlined "Escape From Milwaukee") by business owner Dennis Ellmaurer.

At a time when area employers are unified behind challenging a devastating city ordinance on mandatory sick leave, we get an uninformed Monday morning quarterback column on what should have been done to defeat this ballot initiative?

As CEO of the Metropolitan Milwaukee Association of Commerce (MMAC), I am compelled to clear up some gross miss-characterizations of our role in both opposing the ballot initiative and our strategy, which we undertook with unanimous member support. (Then I will turn back to the task at hand)

1. The sick leave initiative got on the ballot via collected signatures;ever pay much attention at shopping mall? Having MMAC run around and lecture everyone signing petitions at the mall, college or community center as they pass by is not a winning strategy, but changing the state law that allows direct legislation in a state, county, and city with full time legislators would have an impact.

2. MMAC was very visible and responsible in working to hold press conferences, getting media coverage, and editorials in opposition to the sick leave referendum. We rained mail, calls, direct contacts and email on the Mayor and Common Council. Should they have been more vocal in opposition? Absolutely. But once the signatures were collected, neither the council nor the Mayor had the authority to change (or as Mr. Ellmaurer suggests, water down) the ballot language. It was either passed by the Council as is, or put on the ballot. Had our elected leadership been capable of keeping it from reaching the ballot like Gov. Strickland did in Ohio when faced with a statewide referendum - then we would be in a different place today.

3. We believe we have a strong and well-timed legal case and are in the process of seeking an injunction, while we work to have this sick leave mandate overturned. We have engaged a vast number of small business owners, contractors, and large companies in the case against the sick leave ordinance. We have taken every tool we have at our disposal in a democracy to stop this bad economic policy.

In 20 years, I have never seen such a strong and unified response to an issue, nor such deep support from our membership for our actions. We are proud of our members who opened their doors to hold press conferences, who took the time to speak out to other business leaders, who called the Mayor and Council members, who stood up and took action - none of whom I would describe as "a too cozy business community."

Mr. Ellmaurer is spot on in terms of the debilitating impact this has on the city's theme for jobs, and unfortunately there will be many jobs that move out, or just don't move in unless we are successful in court. But his insinuation that MMAC dropped the ball, or is somehow lacking in leadership is a long way from constructive criticism. Sometimes it's hard to see what's happening on the field from so far up in the stands.

To any business leader who wants to play, we extend an offer to get involved with the MMAC and help make a real difference in this community.

Tim Sheehy is president of the Metropolitan Milwaukee Association of Commerce. For additional information about the opposition to Milwaukee's sick leave mandate, visit www.bizforgrowth.com.

The Metropolitan Milwaukee Association of Commerce (MMAC) represents thousands of employers in the greater Milwaukee area. These companies provide jobs for over 300,000 of the region's citizens and face a challenging global environment in which they work to produce a product or service that can compete in that marketplace.

To be competitive, they require bright, talented, and well educated people who are life-long learners. As such, the MMAC more than anyone appreciates the role that our largest local provider of educational services, Milwaukee Public Schools (MPS), plays in providing the educational foundation critical to the success of our members, this community and our future.

However, the world is not standing still. While other regions across the globe are hard at work competing with us, we face some stark statistics:

• Today, more than 160,000 of the region's adult residents do not have a high school degree.
• Only 18 percent of the city's residents own a college degree. (By example in Seattle and San Francisco it's nearly half, Minneapolis 40 percent, Omaha 30 percent, Chicago 27 percent.)
• Only 24 percent of black males in Milwaukee graduate with their age group.
• 50 percent was the best rate at which the last 3 freshman cohorts in MPS enrolled in their senior year.
• 83 percent of MPS graduates enrolling in UWM are taking remedial courses, and after 6 years only 38 percent have graduated or are still in school.

The message is clear: We need to do better. Doing better is what motivated the MMAC to support legislation in 1994 to give low income parents a wider choice of educational options.

Reaching at-risk, low-income kids is not easy. The schools that have a fighting chance with these kids are the schools that have a really good leader, a committed team of teachers, accountability, consequences and, in addition, have more time with the kids.  Under its current structure, funding, contracts, rules, MPS cannot do this on its own, and cannot change fast enough to reach all of the kids most in need. 

Our support for giving parents the ability to choose where their children get an education is premised on our belief that this system will give more students greater access to a broader array of high performing schools; thus increasing the number of kids who graduate with the skills to be successful in the workplace. Our belief has been strengthened as the choice and charter policies we have supported have led to the growth of some outstanding schools.

For example:

• CEO Leadership Academy: 199 students, 100 percent African-American, 98 percent at or near poverty, 92 percent attendance, about 85 percent of graduates accepted to college.
• St. Marcus: 306 students, 85 percent minority, 85 percent at or near poverty, eighth grade students proficient or advanced in reading 95 percent; math 100 percent; language 82 percent.
• St. Anthony: 1,000 students, 98 percent Hispanic, 95 percent non-native speakers, 99 percent at or near poverty, new students third grade WKCE reading at proficient and advanced 20 percent, after one year 33 percent, more than one year 54 percent, eighth grade WKCE reading proficient and advanced, new 16 percent, one year 29 percent, more than a year 65 percent.
• Notre Dame Middle School: 120 students, all low-income, graduation rates substantially above average and 75 percent attend college.

Giving parents choices doesn't guarantee everyone will make a good choice, but the dramatic growth in the number parents utilizing choice and charter school options suggests that our community is better equipped to reach our goal of educating more students with these school choices than we are without them.

This is not to say that there are not high-performing schools in MPS. It is to say that our students are better served by increased access to more high-performing schools anywhere we can find them - in MPS, in choice, and through charters.

Our support for school choice does not mean opposition to MPS, though choice opponents often try to put us in that box. The MMAC has invested over $15 million in scholarships for kids who attend the poorest high schools in MPS, we helped attract over $18 million in funding from the Gates Foundation for high school reform in MPS and we supported the New Leaders for New Schools program.

However, after spending and advocating for tens of million of dollars over the past decade to support and promote MPS schools, we believe it is time for us to make a comparably modest investment in highlighting the value of educational options to Milwaukee's economic landscape. 

Giving increased school choice to parents is not a passing fad for us. It is something we view as a matter of economic life or death for our region. There is no organization or special interest group out there to promote the value of parent choice in education as an economic asset. That is why as long as there are legislators who try and destroy the program we will need to support it; and we will support it as long as we see results. 

At the MMAC, we hope our educational campaign this spring will raise awareness of this asset. I urge you to go to our web site, GetEducatedNow.com, and learn more about the array of quality education options - choice schools, charter schools and MPS schools - that make Milwaukee unique and provide our region its best hope for an economically successful future.

Tim Sheehy is president of the Metropolitan Milwaukee Association of Commerce.

Recently, to much media furor, the Metropolitan Milwaukee Association of Commerce (MMAC) announced that our board of directors had taken a position in support of the Hospital Assessment included in Gov. Jim Doyle's proposed budget repair bill. This was not an easy position for MMAC to take, but in the end we supported the proposal for the following reasons.

Wisconsin hospitals are significantly under-reimbursed for care they provide to low income, uninsured patients whose health care bills are paid by Medicaid. The portion of hospitals' costs for care not reimbursed by Medicaid is passed on to our members and other individuals who have private health insurance. This "hidden health care tax" has the twin impacts of artificially increasing health care costs in our region and negating the positive cost-saving effects of health care reforms pursued by individuals and business through wellness efforts, consumer-based health plans, and other market-based health care reforms.

The Hospital Assessment addresses this concern by leveraging additional federal funds to use for Medicaid reimbursement. These federal funds are not new tax dollars. They are existing funds sitting on the table in our nation's capitol. Sitting there unused, they are an attractive target for other states to take and thereby further reduce the return Wisconsin taxpayers get on the dollars they send to Washington.

According to the non-partisan Legislative Fiscal Bureau, here are how the numbers under the Hospital Assessment work to our advantage:

• Dollars taken in by the Hospital Assessment - $203 million.  
• State general fund skim from this assessment - ($58 million)
• Net state dollars returned to hospitals for Medicaid - $145 million.
• Additional federal dollars leveraged for Medicaid - $196 million.  
• Gross additional dollars to Wisconsin hospitals - $341 million.
• State Hospital Assessment - ($203 million)
• Net gain for Wisconsin hospitals - $138 million

The bottom line is the Hospital Assessment will generate additional revenue to reimburse hospitals for the cost of Medicaid. A higher rate of Medicaid reimbursement means hospitals - particularly in southeastern Wisconsin - have less costs to shift to those of us who do pay for health care.

We do not like the general fund skim off this assessment and would prefer that lawmakers work their way out of the current budget deficit by reducing spending, not raiding other state funds. Unfortunately, we don't always get pure choices in the legislature, and we realize this skim may be the political price we need to pay in order to generate these much-needed additional federal dollars.

In the end, with our members facing ever-increasing health care costs, we felt that it was not responsible to leave $138 million in additional Medicaid reimbursement dollars on the table. In order to ensure that health care consumers benefit from this higher Medicaid reimbursement, we are working with the hospitals to track their costs and measure those costs on an annual basis. Our goal is to hold our health care systems accountable for how they use this new revenue and drive regional hospital costs down to the Midwest average. The hospitals have indicated that they intend to be willing partners in this accountability project.

At MMAC, we realize that our position in support of the Hospital Assessment takes a bit of trust.  As you can see, however, we fully intend to verify that trust with real numbers. Please be assured we have one primary goal in mind: reducing health care costs. Part of reaching this goal is better cost transparency, part is more efficient delivery of care, part is better consumer actions and wellness, but a large part is also better Medicaid reimbursement. 

Finally, I want to assure you that despite our support for a proposal opponents have labeled as the "sick tax," the MMAC remains steadfast in our commitment to creating a tax and regulatory climate conducive to economic competitiveness. In the end, we believe that by increasing Medicaid reimbursement and thereby reducing the "hidden health care tax" currently passed on to our members, the Hospital Assessment is consistent with that overall tax climate goal.

Tim Sheehy is president of the Metropolitan Milwaukee Association of Commerce (MMAC).