Perhaps the most under-covered issue in the Milwaukee metro area is the cost of healthcare. Medical costs are killing this community in both public and private sectors.
Last week, a study by the Greater Milwaukee Business Foundation on Health Inc. found that physician fees for 13 procedures done by specialists are 30% to 40% higher in the Milwaukee area than in several other Midwestern cities. The group previously found that hospital costs in the Milwaukee area were among the nation’s highest. And past studies by others have shown that Milwaukee’s overall medical care costs were 25% higher than in other metro areas.
How often do you hear politicians and talk radio gripe about government benefits? Certainly, Milwaukee County’s pension scandal has been disastrous for this community. But the City of Milwaukee, which resisted such handouts to employees, is still being forced to cut back services. Why? A story headlined by the Milwaukee Journal Sentinel last week offers a clue: The cost of health insurance premiums rose by an incredible 87% since 2000.
How can you possibly freeze taxes and continue services when your operations, as is true of all governments, are heavily driven by personnel, by employees who get health insurance coverage? When one of your biggest costs has gone up 87%, more than four times faster than inflation, how do you avoid budget increases? Adding to the irony is that any property tax increase to help defray these costs will not be paid by hospitals because they are tax-exempt nonprofits, even though they annually report “profits” and pay their executives mega-salaries.
Meanwhile, consider the impact on the private sector. How can Milwaukee’s businesses compete with those elsewhere when they are forced to absorb a cost for health insurance premiums that is so out of control? The business lobbying group, Wisconsin Manufacturers & Commerce, jumps on every tax that impacts businesses. Meanwhile, it seems to ignore a tidal wave of annual added costs coming from medical care inflation.
Ironically, local business leaders sit on the boards of local hospitals that are helping to drive these costs ever upward. Traditionally, these volunteers help raise donations for hospitals. Today, their time might be better spent demanding an explanation of rising costs.
I don’t claim to have any solutions to this crisis. But it’s a safe bet nothing will happen until more attention is paid to the issue. And the media can help make that happen.
Is Darnell Cole Overpaid?
Over the last four years, the Journal Sentinel has done three articles on Milwaukee Area Technical College President Darnell Cole’s salary. In the tradition of the old Milwaukee Sentinel, the paper likes going after government spending. Still, it’s hard to think of any other government executive who’s received as much scrutiny as Cole.
There’s been little JS scrutiny of University of Wisconsin-Milwaukee President Carlos Santiago, for instance, who made $270,000, including $20,000 paid by the UWM Foundation, as of 2004, according to a Business Journal story. Cole’s salary was just raised to $209,815. Why is that so much more newsworthy?
In last week’s story and an earlier article, JS reporter Tom Held told us that Cole is paid more than the president at any of the 16 technical colleges in Wisconsin. But given that MATC is the biggest such system and the size of a system typically drives pay, why is that worthy of repeated mention?
Held’s story last week also told us that Cole is among the highest paid two-year school administrators in the country but offered no statistics to prove it. MATC officials argue that Cole’s salary is in the range of what administrators at big community colleges like Milwaukee’s pay. MATC has an enrollment of 53,000 and a full-time equivalent of 13,200. The head of the Madison Area Technical College earns about 90% of what Cole earns, but the Madison system is about 75% the size of Milwaukee’s system. By that standard, Cole is underpaid.
Meanwhile, Held has been very reluctant to report the salaries of MATC teachers. The average salary for a full-time MATC teacher, according to public records, is a remarkable $91,000. Helping to push the salary higher is that staff get paid more if they teach an “overload” of courses and summer school classes. The end result is that MATC’s teachers, who typically have master’s degrees, earn about $23,000 more than the average UWM professor and about $13,000 more than the average UW-Madison professor, who are typically scholars with Ph.D.s.
The head of the MATC teachers’ union, Mike Rosen, earned $118,425 last year. That’s remarkable pay for an economics instructor at a two-year college. MATC’s pay scale seems almost topsy-turvy: In 2005, MATC had 18 administrators earning more than $100,000. Meanwhile, there were 153 teachers and eight counselors at the school earning more than $100,000.
Needless to say, the salaries of teachers, who are so numerous, have a tremendous impact on the budget and our taxes, much more so than one president’s salary. So why has Held never reported Rosen’s pay and why did he disclose the average salary of MATC teachers only after it was reported in this column? He seems awfully cozy with the teachers’ union.
This is definitely not a bias coming from the editors, who are unlikely to worry about the sensitivities of a teachers’ union. But when only one reporter covers a particular beat, he or she can have a significant influence on how stories are shaped.
Short Takes
• Last week, the Journal Sentinel reported on a study by the National Association of Manufacturers that claimed the rise in corporate tax rates was the biggest factor making U.S. companies less competitive internationally. These kinds of studies, whether by business, labor or any other advocacy group, are inevitably suspect, and this was no different.
In the press release, the study said taxes in other countries studied were 7.6% lower for manufacturers, suggesting that U.S. taxes should be lowered. But if you read the entire study, you’ll find this: “Statutory tax rates reveal only one aspect of a country’s corporate tax burden because they do not take into account differences in treatment of depreciation, investment taxes and other factors.” The study’s authors measured those factors to test “the amount of income actually taxed” and found that the actual corporate tax level was only 2.3% higher in the United States than the other countries studied. The U.S. rate was higher than a low-tax country like Mexico but about the same as developed countries like Canada, Germany, Japan and France. Doesn’t sound like much of a problem.
The reporter on this story was Rick Barrett, a hard-working journalist who does a consistently solid job. He doubtless handled the story as reporters at most daily newspapers do, by relying on press releases or executive summaries. There are rare exceptions of journalists who will read an entire study, like JS columnist Greg Stanford. But most don’t, and advocacy groups like the National Association of Manufacturers, have long taken advantage of this fact, leaving newspaper readers badly served.
• As the issue of the amendment opposing gay marriage heats up, Milwaukee Magazine Senior Editor Kurt Chandler tells the fascinating story of two gay dads raising triplets who oppose the amendment. Meanwhile, their elderly neighbors, who sometimes baby-sit for the kids, may vote for the amendment. Send me a copy.
