MPS must wake up to this reality: Parents are making a choice
Not too long-ago, Kmart was one of the top department store chains in the U.S., operating close to 2,500 stores at its peak. But its market dominance didn’t ensure customer loyalty, nor did it ensure Kmart’s survival.
New competitors offering customers a better product overtook Kmart. Then, rather than adapt to a new landscape, Kmart resisted change — and through a combination of poor management and an inferior product and service experience, drove customers away, leading to deteriorating financials, bankruptcy, and irrelevance. Retail customers abandoned Kmart for better alternatives.
The Milwaukee Public Schools system is following in the footsteps of Kmart.
Once the dominant provider of quality education to kids in the city of Milwaukee, MPS is shrinking in relevance. The governing board’s refusal to transform the district is leading to results that are worse than inferior. Nearly half of MPS students are in low-quality schools. Using the State of Wisconsin Report Card data, 49% (30,000) MPS students are in low-quality schools (rated by the state as “meeting few expectations” or “failing to meet expectations”).
At the same time, parents have chosen different and better options — causing enrollment in MPS’s traditional schools to drop from about 87,000 students in 2007 to 61,431 today. Enrollment dropped by 3,000 students last year — and instead of recovering those “pandemic” departures, MPS dropped another 4,000 students this year.
This is happening because families in Milwaukee have a choice — much like retail shoppers choosing Walmart over Kmart — giving them the opportunity to choose where their children go to school with the support of public funding. This is especially empowering for low-income families who otherwise would not have this choice.
A seismic shift in Milwaukee's educational landscape
Over the past 25 years, because parents in the city have used their ability to choose a school that best meets the needs of their children, there has been a seismic shift in which schools students attend for K-12 education. For students supported by public funding, MPS now educates only 55% of the K-12 population, whereas 25 years ago it was almost 100%. The rest attend schools in the Milwaukee Parental Choice Program (26%), independent public charters schools (14%), and public schools outside the city (5%).
Just as Kmart shoppers fled Kmart for better retailers, parents and students in Milwaukee are fleeing MPS for better run schools that meet their children’s needs.
While parents have found some good schools in MPS, charter and private schools in the Milwaukee Parental Choice Program demonstrate an overall higher level of quality as measured by the state Department of Public Instruction. Looking at DPI’s top two ratings for schools (“significantly exceeding” or “exceeding expectations”), we see that this covers schools serving 77% of students who attend a public charter school and 59% of students attending an MPCP school.
Among MPS students, only 21% are in a highly rated school. This is despite MPCP and independent charter schools receiving between $4,000 and $7,500 less in per-pupil public funding. All signs point to a continuation of declining enrollment and a stagnation of quality schools within MPS.
What does this mean for MPS?
Fewer families choosing to send their children to MPS reduces the per pupil funding (based on enrollment) allocated to MPS in the form of state and federal aid. This means that MPS’ tax levy authority, the portion of funding that comes from local property taxes which is less sensitive to student enrollment, must increase. In real dollars, MPS levied $3,502 per student in 2007, and if enrollment does not decline further, MPS will levy $4,303 per student in 2021.
In addition, MPS’s recent referendum to add a permanent $87 million increase to local property taxes is an effort to counter this decline from fewer students. This property tax increase is not tied to enrollment. Worse, MPS went so far as to note that none of the $87 million would be spent on MPS charter school students. So, if you’re a parent with a child in an MPS charter school, you must pay the property tax increase, knowing the funding will not benefit your child.
This fiscal maneuvering is a short-term stopgap to the long-term reality that fewer parents are choosing MPS schools as the place to educate their children. City of Milwaukee residents are paying more taxes to educate fewer students and getting poor outcomes. A financial disaster is looming.
To this point, MPS is projecting a $52 million budget deficit by 2024. Factors include rising payroll, legacy costs, and the reinstitution of funding for retiree health care. Declining enrollment has also highlighted the district’s failure to execute on a facilities plan. Fewer students should reduce the need for physical space and seats, but instead, MPS has failed to right-size its space, which has led to carrying the cost of excess capacity.
According to an MPS facilities study, the district had capacity for 12,000 more students than it currently enrolled in 2018 and that excess capacity was projected to grow to 23% by 2027. And these gaps are amplified because many students who start high school in MPS don’t make it to their senior year. The enrollment for MPS seniors as a percentage of their freshman cohort, had not risen above 55% through 2015, and the latest data show that the 2018 freshman class of 6,414 declined to a senior cohort 4,066.
Without change, MPS is doomed to fail
Short term, MPS is playing a shell game with facilities by moving students around to fill underutilized school buildings. Long term, the district is making sub-optimal decisions about how to put school buildings to their best use to serve students and taxpayers — further draining resources that could otherwise be spent on educating students.
If it keeps operating this way, MPS is doomed to fail just like Kmart.
The status quo — doing the same things over and over and expecting different results — will not only doom MPS but subject another generation of students to below average education in our community.
However, unlike the retail industry where Kmart shoppers could choose to go somewhere else as the experience worsened, too many students and families in Milwaukee have no choice — they are stuck at MPS. There are simply not enough quality seats because of limits on the growth of choice and charter schools.
Now the defenders of the status quo will claim that if we look at other urban school districts in other cities, MPS isn’t that bad. But that’s like Kmart claiming that it was better than Sears. Both went bankrupt.
Or defenders will say that if they only had more money, MPS would have results as good as charter and private schools. That’s akin to Kmart raising its prices to compete with Walmart. It’s also important to note that giving parents a choice about where to send their child didn’t cause poor performance at MPS — the academic gaps have been a problem for decades.
It’s simple — too little has changed at MPS. Northwestern Mutual, like many companies in this city, remains frustrated with the lack of progress perpetuated by MPS and its leaders. Our company needs and wants employees who grew up here — and we’re the single largest property taxpayer in the city. We have also chosen to put significant support behind education in our community, giving $50 million over 25 years, including support to schools in MPS and the families who send their children there.
Turning our backs on MPS is not the answer, nor is sitting quietly on the sidelines and hoping for a better outcome. Preparing all students to reach their potential is an indelible mark of a successful community. This city and region will continue to fall short of this mark, if MPS continues to ignore the permanence of parent choice and the growth of quality school options outside of the district while it perpetuates a status quo response. If the status quo continues, no one should be surprised when MPS goes off the fiscal cliff it is speeding toward.
In my view, the ONLY thing that will save MPS and these children is a complete transformation of the system starting with board governance, running through each school, and extending into every leadership position.
We now have a competitive mayoral campaign on the horizon. This election gives us an opportunity to select a leader committed to the kind of disruptive transformation that is the only path forward for both MPS and tens of thousands of children, most of whom are persons of color.
I am knocking on this door publicly because time is running out for our kids. A conclusion from a report Commissioned by then Gov. Jim Doyle, and Milwaukee Mayor Tom Barrett in 2009, titled "Toward a Stronger MPS," could just as easily stand today:
“The unfortunate reality, academic outcomes throughout MPS remain unacceptably low.”
Let’s not waste another 12 years. Our kids deserve something better, not another Kmart.
John E. Schlifske is chairman, president, and CEO of Northwestern Mutual and former chair of Milwaukee Succeeds.