More on the Milwaukee-Madison Divide

The Journal Sentinel is running another story this morning on the economic divide between Milwaukee and Madison.

At the center of it, once again, is UW-Madison. As an example of how the Madison economy has grown since the 2001 recession, the article notes:

The local GDP data was compiled by the Bureau of Economic Analysis based on information from individual business establishments.

When they were gathered in 2001, Virent Energy Systems Inc., Madison, contributed nothing because it did not exist.

It was started in 2002 to work on making fuels and chemicals from sugars, using technology developed at the University of Wisconsin-Madison, said Eric Apfelbach, president and chief executive officer. By 2005, it had 18 employees and added half a million dollars in sales to Madison's GDP. Now, it employs 60, has sales of about $4 million and just raised $21 million in venture capital.

"All that money comes into town from out of town and pays for salaries and contractors and leases," Apfelbach said. "These high-tech start-ups that can raise venture capital are really economic multipliers."

It was essentially the same story that the JS ran last December, except that one was based on a Wisconsin Taxpayer Alliance report on the growing income disparities between Milwaukee and Madison.

According to that article:

Madison has some "built-in advantages," such as the major research center of the University of Wisconsin-Madison and that it's the state capital, said Ryan Parsons, a research associate for the Wisconsin Taxpayers Alliance.

"But I think what Milwaukee needs to do if it wants to regain some of that balance that was lost in the last 50 years is more of a focus on education and retaining good college graduates," Parsons said. "One of the reasons Madison has such an edge over Milwaukee is having people who can fill high-tech science research jobs. A lot of that work force is missing from a city like Milwaukee."

When commenting on this article back in December, I concluded that reports like this "need to be kept in mind come budget time."

So here we are with a similar report that's released in the midst of budget talks, and part of what's on the table in those talks is the UW System's Growth Agenda, which includes provisions for both expanding the number of graduates and funneling money into the development of research capacities at UW-Milwaukee and the other campuses.

In spite of all the public squawking politicians on both sides engaged in regarding the differences over K-12 education in the budget, it's really higher education where the true budget differences exist. To be sure, the biggest difference between the Dem budget and the GOP budget on K-12 education is where the money should be spent.

In terms of higher education, on the other hand, the two sides are closer to $100 million apart on how much should be funded in the first place, including around $10 million that was dedicated specifically to enhancing the research proposals focusing on engineering and biotechnology made by Chancellor Santiago for UW-Milwaukee.

Part of the problem is how the two sides are discussing the funding issue. On the GOP side, funding is discussed as if it's just aimed at an operating budget to keep the UW System afloat. The talk is about what the UW System needs.

And that fits with the Assembly budget proposal for the UW. As the Dems have rightly pointed out, the $62 million increase for the UW budget that the GOP has proposed would only leave around $6 million in truly new funding outside of what is needed to pay off bonds and increased utility bills.

But, the thing is -- and the reports outlined above support this -- the funding for the UW System doesn't stop with the UW System. Funding for the UW System isn't just paying for stuff, it's also investing in a state resource that has a proven track record of driving and, just as importantly, transforming the economy in this state.

And attacking these investments as nothing more than money grabs isn't providing any real "protection" for the taxpayers, particularly in the long run.