Milwaukee Biz Blog

Do you ever get the sinking feeling that America's economic infrastructure is crumbling around us?

Among other things, 2008 may go down in history as the year of the taxpayer bailout. And when it's all said and done, us taxpayers may be holding the bag for damages done to America's banking system, its housing market, its automotive sector and its airline industry.

It began in March, when the Federal Reserve Bank decided to facilitate a fire sale of Bear Stearns to rival JP Morgan Chase by agreeing to back $29 billion worth of Bear Stearns' assets that were mostly tied to mortgages.

That decision prompted U.S. Sen. Sam Brownback (R-Kan.) and others to voice concerns that the Fed's decision recklessly exposed taxpayers to bad debt and may prompt other private firms to believe the government will bail them out if their investments go south.

"I am concerned when the taxpayer's money becomes the 'skin in the game' to rescue supposedly sophisticated investment and commercial banks from their own poor decision-making," Brownback said.
This week, President George W. Bush dropped his opposition to new legislation intended to stabilize the nation's housing market.

Bush had objected to the bill's $3.9 billion provision for neighborhoods hit hardest by foreclosures.
Under the bill, the government would help struggling homeowners obtain new, cheaper loans, and the government would be allowed to offer troubled mortgage giants Fannie Mae and Freddie Mac a cash infusion.

The "American Housing Rescue and Foreclosure Prevention Act" would combine the Democrats' priorities of providing federal help for homeowners facing foreclosure and $3.9 billion for devastated neighborhoods with the Republicans' goal of reining in Fannie Mae and Freddie Mac.

The collapse of the housing market is causing severe distress for many southeastern Wisconsin companies, including MGIC Investment Corp., the nation's largest private mortgage insurer, and Marshall & Ilsley Corp., the parent company of M&I Bank that invested heavily in mortgages in the bubble-bursting Arizona and Florida housing markets.

Many Congressional Republicans objected to the housing plan, calling it a costly bailout for irresponsible homeowners and unscrupulous lenders. At a closed-door meeting Wednesday, House Republicans denounced the bailout, but the bill was passed later in the day in the House by a vote of 272-152.

U.S. Rep. Paul Ryan (R-Wis.) promptly denounced the bill.

"My top priority is to protect the taxpayers, not the shareholders. Our current policy toward Fannie and Freddie is not only dysfunctional and rife with bad incentives, but it also has potentially disastrous consequences for taxpayers. This bailout plan aggravates the fundamental problem that led us here: Fannie and Freddie remain for-profit corporations but still enjoy a Federal guarantee at the taxpayers' expense against any risk of loss," Ryan said. "To force Americans already struggling to make ends meet to take on this risk is a dangerous precedent. Congress has tuned out the voice of the taxpayer with today’s bailout bill. Since my first years in Congress, I have called for reforms in Congressional oversight of these mortgage giants, so that we could have avoided the current situation. We need to inject some commonsense into this debate, rather than set ourselves up for more taxpayer-funded bailouts in the future."

Rep. F. James Sensenbrenner (R-Wis.) joined Ryan in voting against the bill.

"Once again, the House Democratic leadership has put forth legislation that does not accomplish its stated goal: in this case, that of helping American taxpayers struggling to be responsible with their home mortgages. Probably the most egregious provision tucked in the bowels of this 700-page legislation that was rushed through Congress in order to come to the floor today, is an $800 billion increase in the public debt. Public debt is money that the government can borrow, and with this bill, our debt limit would now be taken to a new record high of $10.6 trillion," Sensenbrenner said. ""I could not in good conscience vote for a bill that takes taxpayer money to bail out scam artists and speculative lenders. Despite its title, H.R. 3221 will do nothing for housing and economic recovery."

Conversely, Congresswoman Gwen Moore (D-Milwaukee) hailed the bill.

"Fundamentally, the goal of this comprehensive plan is to help American homeowners and the nation’s housing market weather the most serious international economic crisis we have faced in nearly 20 years," Moore said. "The measures that we have already passed have been necessary but not sufficient. This housing bill is the next critical step in our efforts to address the crisis facing our communities."

Meanwhile, America's automotive and airline sectors appear to be in a race to bankruptcy court.

General Motors Corp. and Ford Motor Co., the two largest U.S. automakers, have about a 46-percent chance of default within five years, according to Edward Altman, a finance professor at New York University's Stern School of Business.

"Both are in very serious shape and the markets reflect that,'' Altman, the creator of the Z-score mathematical formula that measures bankruptcy risk, said in an interview with Bloomberg Television earlier this week.

Altman said his model shows that GM and Ford are "on the verge of bankruptcy."

He told Bloomberg, "The thing that triggers a default in almost all cases is running out of cash and not being able to refinance … You're not going to go bankrupt as long as you can refinance short-term liabilities. You will go bankrupt if you can't.''

The airline industry is trying to survive with an economic model that is doomed to fail, as long as fuel costs remain at near-record levels. In many cases, the airfares charged by the airlines do not cover the costs to fly each passenger. Something must give.

Our hometown company, Midwest Airlines, is retreating into a shell, cutting routes, eliminating jobs and demanding unrealistic concessions from its pilots and flight attendants.

So, here we are. Us taxpayers are bailing out our banks and propping up our housing market. Mortgage foreclosures are skyrocketing. Unemployment and inflation are on the rise. Retailers are closing stores. And the clock is ticking on our automakers and our airlines.

But faced with wars on two fronts, and no end in sight, how much deeper into debt can this country go? Strapped with $4 gasoline and rising food costs, how much more debt can American households incur?

 

Buckle up. We've surely got more turbulence ahead.

 

Steve Jagler is executive editor of Small Business Times.

Historically, Milwaukee County has had less than stellar results from privatization. The privatization of the Milwaukee Public Museum was supposed to offer major cost savings, but instead cost taxpayers millions. Mismanagement and lack of accountability led to the near loss of this cherished institution.

And who came in at the last minute to bail them out? Milwaukee County did.

With record numbers of passengers and nonstop flights, Mitchell Airport is one of the most successful public assets in the entire region and frequently receives praise from the travel industry. Passenger fees have remained the same since the mid 1990s.  Parking fees have increased only once in the last five years.

Travelers easily notice the quarter of a billion dollars the County has invested in the airport, which is a huge driver for economic development and minority employment. We go out of our way to be good neighbors to those who live near the airport, helping address their noise and environmental concerns. Would a private operator be as responsive?

Privatizing the airport could lead to major cost increases. Potential private operators are already salivating at the chance to operate our airport like a mall and satisfy investors by extracting the maximum amount of revenue from passengers. Although Midway Airport in Chicago, the only major U.S. airport that has applied for privatization, plans to freeze airline fees for the first six years of a private lease, Midway's chief financial officer told the Chicago Sun Times the lease will not cap parking rates and the operator will raise them "to the point where the market will either accept them or not."

Considering that approximately 90 percent of the airport workforce is already privatized, is it worth sacrificing accountability by contracting out the remaining county employees?

It's not a good trade-off.

The Milwaukee County Board has not yet been presented with a formal proposal. If one of Mitchell's major airlines goes out of business, would taxpayers be left holding the bag or would the private firm negotiate lower payments to the county? What if privatization fails? Stewart International Airport in New York was leased to a British operator in 2000, but the experiment failed and the airport was transferred back to the public.

Due to the volatility of the airline industry, leasing the airport would not provide a stable source of mass transit funding. Why would the county executive sacrifice the airport to make a quick buck? Based on the best case scenario from the county executive, an airport lease would only give Milwaukee County a maximum of $15 million per year for transit, which isn't even enough to maintain the status quo.

The county board recently approved an advisory referendum to remove the transit burden from property tax payers and shift the cost to a small increase in the sales tax. For Milwaukee County residents, the sales tax would reduce property taxes. Don't be fooled when the county executive claims property taxes won't go down. The property tax levy would still be subject to strict levy limits set by the state.

The county executive has opposed every transit funding solution adopted by the county board. Even business leaders who have historically supported the county executive are now pushing the sales tax to preserve our mass transit. Bus riders need help right now.  They should not be treated like airline passengers who have to wait years before cashing in frequent flyer awards. Even though Chicago's Midway Airport could be transferred to a private operator this year, the plan was first proposed nearly five years ago. We can't afford to wait that long. I will oppose any attempts to get this proposal off the ground.

 

Milwaukee County Supervisor Marina Dimitrijevic represents the 4th District, including Milwaukee's Bay View and near south side neighborhoods.

The Midwest Airlines pilots do not plan to even vote on the troubled company's demands that would slash their pay by up to 65 percent, according to Jay Schnedorf, a captain and chairman of the Midwest unit of the Air Line Pilots Association (ALPA).

Schnedorf told SBT, "There will be no vote on their proposal. It's unacceptable on its face. We are planning a counter-proposal to present back to the company … We've told them (company officials) their demands are unacceptable."

Midwest Airlines is demanding that pilots take pay cuts of 45 to 65 percent. Schnedorf said a junior captain's annual salary would drop from $120,000 to $31,000.

With a wife and two children, a pilot earning $31,000 would qualify for the Wisconsin BadgerCare health care program for the working poor, at taxpayers' expense, Schnedorf said.

A Midwest senior captain's salary would drop from $150,000 to $79,000 under the company's proposal, he said.

The company already has furloughed 35 of its 400 pilots and plans to cut its roster of pilots down to 200, Schnedorf said.

Schnedorf noted that the pilots took "deep concessions" to keep the Oak Creek-based company afloat in 2003.

"I made more than $35,000 flying for the company in 1995, with better benefits," Schnedorf said.
The Midwest chapter of the pilots union will meet Thursday morning to discuss their options, Schnedorf said.

Midwest also is demanding that union flight attendants take pay cuts of 34 to 56 percent.
Midwest officials have said the cuts are needed to help the company avoid filing for Chapter 11 bankruptcy.

The majority owner of Midwest's Air Group Inc., the parent company of Midwest Airlines, is TPG Capital of Fort Worth, Texas. Northwest Airlines Corp. owns a 47-percent stake in the venture.

"With the resources these owners have, TPG and Northwest, if they want to get a deal done, they clearly have the ability to buy the time that is needed to do the right things," Schnedorf said.

Meanwhile, "for sale" signs are popping up like dandelions in front of condominiums throughout Oak Creek, as pilots and flight attendants prepare to lose their jobs or take pay cuts that would prevent them from staying in their homes.

Schnedorf said he spent his Fourth of July weekend painting his house, preparing it for sale.

"Pilots are doing several things, looking at how they can cope with this. They all are going through the same things with their homes, their wives and their children," Schnedorf said. "It's a tragic situation, the human impact that's going on."

The pain inflicted by soaring fuel costs is being felt throughout the airline industry.

Discount carrier AirTran Airways told its employees Monday that the company will cut 480 jobs, or more than 5 percent of its workforce, by Sept. 6.

Last week, American Airlines' parent company, AMR Corp., announced it plans to cut nearly 7,000 full-time employees, or 8 percent of its total staff, by the end of 2008. The reductions follow the airline's report that it may cut up to 900 flight attendant jobs.

Meanwhile, Orlando, Fla.-based AirTran's leadership team is keenly watching Midwest's tactical decisions less than a year after Midwest had rebuffed AirTran's hostile takeover bid.

"We'll keep a close eye on the competitive market and take a look at what might change with the Midwest pulldown," said AirTran spokeswoman Judy Graham-Weaver.

Steve Jagler is executive editor of Small Business Times.

If you ever wondered why southeastern Wisconsin hasn't moved forward with development of a functional mass transit system, the answers were clearly apparent at the annual Community Development Summit held Wednesday at the Italian Community Center in Milwaukee.

The summit, presented by the Urban Economic Development Association of Wisconsin, featured a panel discussion that included: Milwaukee Mayor Tom Barrett; philanthropist and business executive Michael Cudahy; Milwaukee County economic development director Bob Dennik; Mequon Mayor Christine Neurenberg; Racine County Executive William McReynolds; Waukesha Mayor Larry Nelson; state Rep. Jeff Stone (R-Greendale); state Sen. Lena Taylor (D-Milwaukee); and Waukesha County Executive Dan Vrakas.

The discussion was moderated by Mike Gousha of WISN-Channel 12 and the Marquette University Law School. Talk about herding cats.

I know most of the panelists personally. Good people all. Fine public servants too. But they cannot agree upon what the top regional transit priorities should be, which transit modes are most needed and just as important, how to fund them.

Barrett and Milwaukee County Executive Scott Walker are at a standoff about how to spend $91.5 million in federal transit funds that were allocated for the region 17 years ago. Before those dollars can be spent, the mayor, the county executive and the governor all most agree upon how to use the money.

Barrett wants modern streetcars to link to local attractions and express buses to connect workers to jobs through a hub at Milwaukee's new Downtown Transit Center. Walker calls that idea a "Trojan horse" for light rail and instead wants to ramp up the county's bus system.

Until they agree, those dollars will just sit in Washington, and their potential impact will continue to dwindle (Remember, $91.5 million bought a lot more 17 years ago than it does today.)

Barrett extended an olive branch of sorts Wednesday, saying, "I'm prepared to split that money with the county right now, and let's move forward."

Dennik, representing Walker, was not impressed.

Cudahy, who has studied transit systems throughout Europe and in American cities such as Portland, Ore., said the plans of both Barrett and Walker fall short of what is needed in Milwaukee.

"What has to be done is a new and a bold transportation scheme," Cudahy said.

Cudahy is proposing a public/private partnership to form a regional transit authority with the power to impose a sales tax to help fund an integrated transit system that would include buses, streetcars and the KRM (Kenosha-Racine-Milwaukee) rail line.

To people who say such a system should be self-supporting, Cudahy notes that successful mass transit systems in other cities are not self-supporting. Heck, even our highway system isn't self-supporting. We don't have toll booths in Wisconsin.

Barrett says his plan is a "Goldilocks" idea, which Cudahy says is too small and Walker says is too big. Barrett says his plan is "just right" to at least move the region forward.

But McReynolds said any regional plan that calls for a sales tax increase is dead upon arrival in Racine.

"If you say 'sales tax' in Racine County, it's going nowhere," McReynolds said.

Nelson said the geographic boundary lines in the political discourse of the mass transit issue in the region are "foolish and outdated." Taylor and Stone agreed.

Still, Stone acknowledged, "I don't think Waukesha County trusts Milwaukee County."

Vrakas didn't disagree.

Amid the partisan and geographical posturing, there are occasional signs of political courage and even independence.

Taylor praised Stone for being the only Republican on the Joint Finance Committee to vote Tuesday against a provision that would have prevented the state from spending $100,000 to study the KRM line unless a funding mechanism was first approved by the legislature and the governor.

Stone is the Assembly's transportation expert. For his bipartisan gesture on Tuesday, Stone will no doubt receive grief from the local conservative radio talk show cabal. Neurenberg blamed the media and talk show hosts Mark Belling and Charlie Sykes for dividing the community on such important issues.

Nelson, meanwhile, said he would support a KRM line, because he believes it will be beneficial for the entire region, including Waukesha.

Cudahy, the richest guy in the room, predicted that gasoline could soon rise to $6 per gallon and even $10. If local political leaders do not overcome their differences, Milwaukee will soon become the only major American metropolitan region without a mass transit system, and the region will be at a stark competitive disadvantage economically and socially, Cudahy said.

Several key civic and business leaders throughout the region are stepping forward to support the KRM, including the Greater Milwaukee Committee, the Metropolitan Milwaukee Association of Commerce, the Spirit of Milwaukee, the Greater Milwaukee Association of Realtors and the Racine Area Manufacturers & Commerce (see the complete list key supporters at www.transitnow.org/key-endorser-list.html). The business leaders often cite the need for a mobile workforce and to connect with Chicago as reasons to move forward with the KRM.

"Everybody needs this thing," Cudahy said.

Steve Jagler is executive editor of Small Business Times.

The Urban Economic Development Association of Wisconsin (UEDA) will present its seventh annual Milwaukee Community Development Summit on Wednesday, June 25.

The title for this year's summit is "Transportation & Jobs: The Case for Regional Cooperation - Getting There From Here."

The summit is open to the general public as well as representatives from government, elected officials, private industry, nonprofits, educational institutions, foundations and others concerned about the economic future of this region.

It will include two major panel discussions as well as a series of roundtable discussions that will focus on presenting new and dynamic ideas to regional policy makers. 

More specifically, a morning reaction panel of individuals who are working daily in transportation and workforce will respond to a presentation by Robert Liberty, deputy council president for the City of Portland’s Metro Council.

Portland has one of the most extensive and advanced transit systems in the United States and has experienced great success in economic development, although not without controversy.

The discussion will be moderated by Eric Von, talk show host on WMCS Radio AM 1290. This will be followed by an afternoon town hall session, moderated by Mike Gousha, WISN-Channel 12 commentator and distinguished fellow in law and public policy at the Marquette University Law School.

The town hall will feature a panel of southeastern Wisconsin elected officials and business leaders - people who are responsible for shaping policy for the region.

Why should the general public and others attend the summit? We think that there are at least five reasons:
1. Learn about the Portland Metro Council, the only popularly elected, multi-jurisdictional regional government in the United States. What have they learned about regional cooperation that we can apply to southeastern Wisconsin?
2. Hear what area workforce development, transportation and policy leaders are doing to move southeastern Wisconsin forward in regional cooperation.
3. Participate in an exciting town hall session, moderated by Gousha, where you can hear the perspective of regional elected officials and business leaders, and respond to what they have to say.
4. Network with individuals and professionals in community and economic development, government, business, workforce development and transportation, and others who care about this region.
5. Be part of the effort to grow and strengthen southeastern Wisconsin. An informed public is the best way to help this region capitalize on its assets and form a collaborative approach to support major initiatives to grow southeastern Wisconsin.

Past Community Development Summits have attracted from 300 to 500 people and topics have included economic development, affordable housing, special needs housing, neighborhood planning and advocacy.

A large number of past summits have centered on issues addressing the city of Milwaukee and its neighborhoods. This year’s focus is regional and will include attendees from all seven counties and constituent cities of the Milwaukee metropolitan area.

Why are they attending? Because transportation and jobs are regional issues and addressing them can only be successful with regional cooperation. 

The summit will be held on Wednesday, June 25, from 8 a.m. to 4 p.m. at the Italian Conference Center in Milwaukee. To find out more information and register, visit the website of the Urban Economic Development Association of Wisconsin (UEDA) at www.uedawi.org.

William Johnson is the director of the Urban Economic Development Association of Wisconsin (UEDA).

When you are no longer an independent company, you sometimes have to put up with the trials, tribulations and drama of your corporate benefactors.

Such is life these days for Midwest Air Group, the Oak Creek-based parent company of Midwest Airlines, which is attempting to navigate through some extreme turbulence in the airline industry.

The provider of "the best care in the air" was bought out by Midwest Air Partners LLC, an affiliate of Fort Worth, Texas-based TPG Capital, on Jan. 31. Northwest Airlines Inc. of Eagan, Minn., is a minority investor in the deal, which shunned a hostile takeover bid by AirTran Holdings Inc.

Northwest has been going through a corporate soap opera of its own in recent weeks, as Atlanta, Ga.-based Delta Air Lines Inc. has agreed to buy Northwest for $3.63 billion in stock. The conglomeration would create the world's largest air carrier and may kick off another round of consolidations in the industry.

Members of the Air Line Pilots Association's chapter at Midwest Airlines are worried that the U.S. Department of Justice could require Northwest to sell off its stake in Midwest to another party as a way of appeasing concerns over antitrust issues. Such fears seem unfounded in an era in which antitrust regulations have become almost quaint memories of distant days gone by. Where have you gone, Teddy Roosevelt?

While Midwest Airlines executives keep their eyes on the fate of Northwest Airlines, they had some drama of their own this week when their No. 2 guy, chief operating officer Joseph Kolshak, resigned "to pursue another opportunity," just four months into the job. Kolshak had been hired only four days after Midwest Airlines was acquired by TPG Capital.

Then another corporate soap opera involving TPG Capital bubbled up later this week.

In addition to owning the majority of Midwest Air Group, TPG Capital and a unit of the Goldman Sachs Group had acquired Alltell Corp. in a $27.5 billion leveraged buyout seven months ago.

Verizon Wireless announced this week that it has engaged in talks to acquire Alltel for about $28.1 billion in a venture that would create the world's largest cell phone company.

Why would TPG Capital agree to turn around and sell its share of Alltel so quickly with so little return on its investment?

The answer is that TPG Capital wants to pay off the debts it acquired with Alltel as quickly as possible at a time when investment banks have been battered by big losses in credit markets, forcing many to sell their assets to raise cash and stay afloat

Under the agreement, Verizon Wireless would pay about $5.9 billion in cash for Little Rock, Ark.-based Alltel and assume $22.2 billion in debt.

Looking from afar, Joe Sweeney, managing director at CFA-LLC Investment Banking in Milwaukee, is doubtful TPG Capital's balance sheet heartburn with Alltel will have any carryover effect on its investment in Midwest Airlines.

Lined up next to Alltell, Midwest Airlines is but a blip on TPG Capital's radar.

Still, Sweeney says companies in the transportation sector are "hunkering down," trying to stay in business while absorbing skyrocketing fuel costs.

Investment banks are not eager to call in overdue notes on distressed airlines, because the banks then incur the losses, Sweeney says.

"A lot of banks are becoming partners with businesses in the transportation industry," Sweeney says.
On a smaller scale, CFA's business is booming, negotiating nine transactions at this time, Sweeney says.

What's driving that local merger and acquisition activity?

According to Sweeney, many small business owners are cashing in their chips now before the November presidential election. The next president will inherit a fiscal budgetary nightmare.

Sweeney believes Democrat Barack Obama and Republican John McCain are both likely to be in favor of raising the federal capital gains tax from its current 15-percent rate.

"That's the fastest and easiest way to gain the most money," Sweeney says.

So, business owners on the fence about selling their companies this year should consider the ramifications of waiting to 2009, Sweeney says.

For full disclosure, it should be pointed out that it would be in Sweeney's best interest to say just that.
Turbulent times, indeed.

Steve Jagler is executive editor of Small Business Times.

From Denver to Charlotte; Portland to the Twin Cities; Indianapolis to Dallas; Chicago to Little Rock, Ark.; cities across the country are reaping the vast economic benefits of rail transit.

Right now, no less than 27 major cities across the country are considering new or expanded rail systems. In fact, virtually every important American city that is growing features this technology in its transportation system.
Rail can do for Milwaukee what it has done for cities of all types and sizes in every corner of this country: spark literally billions of dollars of economic growth and development. Without it, Milwaukee is missing a critical opportunity to propel our community forward.

The question is, what is the best way to introduce rail to Milwaukee?

My transit plan splits $91.5 million in federal transit money designated for Milwaukee, investing about half in Bus Rapid Transit to help the county’s struggling bus system, and half to create a new starter streetcar system called the Downtown Circulator.

Here is why the Downtown Circulator is best way to start rail in Milwaukee:

A strong downtown is crucial to all of Milwaukee. According to Emerging Trends in Real Estate 2008, the strongest U.S. markets are those that make their urban centers "…magnets for corporate headquarters, business elites, the best and the brightest of the workforce as well as the largest share of investor dollars."

No one believes downtown is more important than other neighborhoods, but downtown development is historically a major factor in business decisions to stay, relocate, or expand in a city, as well as an important part in retaining and keeping young talent. Rail makes Milwaukee more attractive for businesses and workers alike.

And downtown development sparks economic growth in surrounding neighborhoods.

• Major economic hub. Downtown is home to many of Milwaukee’s most important businesses and more than 78,000 jobs - including 18,000 (23 percent) service and blue collar jobs. And this doesn’t include many part-time and seasonal employees who work downtown. Plus the Circulator will do for Milwaukee what rail has done in countless cities across America - develop the economy and create more jobs.
• Major destination point for area residents and visitors. Entertainment districts, concert venues, the Lakefront, arts and culture attractions, sporting events, shopping, festivals – people come downtown from across the region and around the state. Future developments at the Pabst Brewery and in the Park East will only increase the demand for rail in this area.
• Fast growing neighborhood. The Downtown population now stands at 15,000 people and rising, and more than 200,000 people live within a 3-mile radius of downtown Milwaukee.
• Multi-modal, fully integrated transit vision. My plan links the Downtown Circulator with two new Bus Rapid Transit express routes, KRM commuter rail, Amtrak service, and the County’s local bus service, and connects it all at the newly-renovated Intermodal Station. The Circulator would be accessible to everyone.
  Fiscally responsible. My plan utilizes part of $91.5 million already set aside for us – without massive new spending.
• Critical first step. Getting a rail system in the ground that will clearly demonstrate its tremendous value is the best way to introduce rail to Milwaukee. The Circulator is the perfect starter system to serve as a first phase, and we can responsibly and smartly expand the Circulator into neighborhoods across the city in the future.

Those who might oppose my plan because they want a larger, more expansive rail system have failed to explain how to pay for it, and such systems are typically very expensive. And my plan puts Milwaukee on the pathway to a greater system in the future - in a smart, planned, and responsible way.

To reject rail outright is a failure to recognize its enormous economic power, and will cause Milwaukee to lag behind virtually every other major city in America.

Splitting $91.5 million in federal funds between the Downtown Circulator and Bus Rapid Transit to help the County bus system is a real compromise and will move Milwaukee forward.

Tom Barrett is the mayor of Milwaukee.

The past few months have seen much debate over the 27th Street exit on Interstate 894 as part of the Wisconsin Department of Transportation’s reconstruction and expansion project of I-94 from the Mitchell Interchange to the state border.

The debate is an important one, impacting people's homes and businesses. With much at stake, the debate has become understandably heated. The problem with heated debates, however, is that often times facts get fried.

First and foremost, there is a belief that as a result of this plan, the 27th Street exit will be closed completely. This statement is misleading and fails to tell the whole story.

While it is true that the exit to 27th Street along westbound I-894 for traffic coming from the south will close under current WisDOT plans, all other access to South 27th Street will remain as it does today. As the Small Business Times reported in the BizTimes Real Estate Weekly bulletin, “Southbound traffic coming from the downtown area and eastbound traffic coming from the west would still be able to exit at 27th Street.” Businesses and homes along 27th Street will remain completely accessible to those exits.

This is an important point, because the access points that will remain open to 27th Street are those most heavily traveled. According to information from our city engineer, approximately 16,000 vehicles exit I-894 via S. 27th Street every day, but only 1,500 of those cars – less than 10 percent - utilize the exit that would be closed.

This means the vast majority of vehicles that currently use the 27th Street exit to reach the homes and businesses along this corridor will still be able to under the current plan.

Second, I cannot support a plan that destroys people's homes. The alternate proposal WisDOT considered in an effort to maintain full access at South 27th Street would have required the demolition of ten single-family homes and two 8-unit apartment buildings.

Forcing people from their homes and reducing the city’s property tax base are not alternatives I can support. That is why I have - from day one of this project - urged the state Department of Transportation to design a freeway that not only improves safety and the flow of traffic, but one that avoids the destruction of people's homes.

Which leads to the third and final point: the City of Milwaukee has been engaged throughout this process and has consistently urged WisDOT to produce a plan for 27th Street that is fair to business owners and residents in the area. My commissioner of public works and my city engineer made this point in a letter to WisDOT on Aug. 21, 2007, and in conversations throughout the 27th Street debate. My message has been perfectly clear: keep 27th Street fully open, AND don't destroy people's homes.

Any suggestion that the City of Milwaukee has not fought for this issue is either unfair or uninformed. I understand that when people's businesses and homes are involved, debate can become heated and facts can get fried. But cooler heads must prevail.

As mayor, I will continue to push WisDOT for a plan that keeps all of 27th Street open AND saves people's homes. Those who agree should stand with me.

Tom Barret is the mayor of Milwaukee.

Over the past several years, County Executive Scott Walker and I have worked together on bringing more businesses into Milwaukee County, particularly in economic development areas such as the former Park East Freeway land, the Milwaukee County Research Park and cultivating small and disadvantaged firms.

In addition, the Finance & Audit Committee, as well as the entire Milwaukee County Board of Supervisors, has worked with Walker to minimize tax increases. But on the issue of privatization,

Walker's ideas make no sense. I disagree with his comments regarding privatization of county assets, including our airports, golf courses and parks.

No formal proposals for the privatization of General Mitchell International Airport (GMIA) have been presented to Milwaukee County. But beyond that, I question why we would privatize an entity that requires no property taxes for its operation and provides 240 family supporting jobs. Their salaries are fully covered by fees paid by airlines and passengers. We have always worked well with the airlines that serve the airport. In fact, GMIA was ranked the fourth-best airport in the United States by Conde Nast Traveler magazine, ranking No. 1 for ease of connections.

There are cases where outside vendors provide certain services the county needs. Like most airports, private vendors contract for parking and food/retail concessions at GMIA. We also use outside vendors at Lake Park Bistro and the Botanical Gardens.

Complete privatization, however, can become a costly burden for Milwaukee County. Consider the Milwaukee Public Museum. While the county owns the building and artifacts, a private firm operates the museum. Unfortunately, that arrangement has become a financial drain on Milwaukee County, costing taxpayers more than $3.5 million per year.

The county executive has also attempted to outsource operation of the Department on Aging's Care Management Organization (CMO), which was running deficits. The county board, however, stepped in to prevent privatization, improve oversight of the program and generate enough funds to repay all of the approximately $12 million in deficits. Most likely, those funds would not have been repaid had the county outsourced it. I'm proud to report that the CMO has become a successful program in Milwaukee County.

Simply privatizing entire departments and/or major operations within the county is not the way to go, especially with assets that generate revenue. Privatizing GMIA would also have negative effects on the residents of Milwaukee County, particularly those who live near the airport. Under the current arrangement, residents living in those neighborhoods have direct representation on the County Board of Supervisors. They would likely not be afforded that level of accountability from a private firm running the airport.

The county executive mentioned the privatization of Chicago's Skyway toll road and Midway Airport. In these cases, Chicago lost family supporting jobs, negatively impacting Chicago's economy. Last year, the City of Chicago also raised property taxes by more than $83 million.

Here in Milwaukee County, mass transit can be improved by identifying a dedicated funding source that, unfortunately, has been blocked by the county executive. While he was stalling solid funding for our existing mass transit system, he went along with raising the car rental tax from $2 to $15 for the Kenosha-Racine-Milwaukee commuter rail line, a proposal that was stalled in the State Legislature.

At the county board, we're trying to be good stewards of our tax dollars. I ask the county executive, what is your motive for your desire to get rid of county functions and assets that bring in revenue while keeping those that are a financial drain? Walker's track record leads me to believe he plans to downsize and sell off pieces of Milwaukee County until it no longer exists.

 

Milwaukee County Supervisor Michael Mayo Sr. represents Milwaukee's Seventh District.

I am the vice president of the Airport Gateway Business Association (AGBA), which manages the Airport Gateway Business Improvement District #40 (AGBID).  The AGBID has over 450 commercial property owners, and there are over 15,000 employees in the AGBA area.

Also, my two brothers and I own three businesses on Milwaukee's south side, one of which has been owned by our family for over 78 years. This blog is on behalf of those organizations and our family's companies.

On Dec. 11, Milwaukee's Common Council passed a resolution to maintain the status quo of Interstate 94 having six traffic lanes from the Illinois border through the Mitchell interchange and to oppose the expansion to eight lanes as recommended by Wisconsin's Department of Transportation.

We strongly disagree with the council's resolution and view it as extremely short-sighted with a provincial view vs. the 40-year impact of the full I-94 reconstruction project. 

The Milwaukee 7 effort is focused on growing southeastern Wisconsin as an economic entity that increasingly meshes with greater Chicago. General Mitchell International Airport is forecasting the need for another runway and two terminal wings by 2021 to support increasing customer traffic.

Additional growth is already occurring along the I-94 corridor to Illinois, and more is forecast. The AGBA, which includes many transportation-related and affected businesses, is working to promote the south side of Milwaukee County area as the Gateway to Milwaukee.

For all of this growth to efficiently occur, car and truck traffic will need to flow well along I-94 and its ramps. Keeping I-94 as it has been for the last 40 years will increasingly obstruct this growth over the next 40 years.

At the same time, however, we do support the council's comments about the state and southeastern Wisconsin working together to develop a comprehensive plan regarding transportation in the area, to include the addition of the KRM (Kenosha, Racine, Milwaukee) rail line. We believe that the City of Milwaukee can and should play a leading role in facilitating the development of such a plan.

However, formally voting against expanding I-94 to eight lanes appears more of an obstruction approach vs. a leadership approach.

 

Jaime Maliszewski is vice president of the Airport Gateway Business Association (AGBA) and is the president of Reliable Plating Works Inc. and GM Elite Finishing LLC, as well as a founding member of Brilliance LLC.