Coming debate over UW funding, structure deserves public attention
The stage is set for a state Capitol debate over the future of the University of Wisconsin System, from its smallest two-year campus to its flagship research powerhouse in Madison.
Here’s hoping the debate is an honest effort to improve the performance, accessibility, and accountability of the state’s largest higher education system, not a political exercise driven by perception rather than fact.
The details aren’t known because Gov. Scott Walker is keeping his cards close to the vest, but the UW System is bracing itself for a round of state budget cuts in the two-year cycle that begins July 1. That’s the “stick.”
The “carrot” may be enhanced management flexibility for the UW in areas such as hiring and pay decisions, certain tuition categories, construction projects, and other areas now overseen by the state.
The question is whether the budget cuts, which may total hundreds of millions of dollars, will be offset by cost savings and other efficiencies generated by looser apron strings tied to state government.
The UW System budget is roughly $6 billion per year overall for 26 campuses and central administration, with about $1.2 billion of that amount coming from state tax dollars. The rest comes from program revenues (largely tuition), federal grants and contracts, and other sources, such as private donors and foundations.
In other words, about one-fifth of the UW System budget comes from state government — along with a disproportionate amount of red tape and expectations.
Among those expectations is that the UW System do a better job of driving economic and workforce development. That includes producing the kind of undergraduate and graduate students the market wants, generating world-class research, working with major state companies, and helping to create startups. It does all of that, although results don’t always match what’s seen in other states.
Then again, the UW System doesn’t operate in a vacuum. A recent report by the Milken Institute noted that Wisconsin is already 37th in state support for higher education among the 50 states, 47th in percentage growth in higher education spending, and 31st in state spending on student aid. It’s hard to build a stay-at-home, knowledge-economy workforce without investing in young people. While most research dollars come from external sources — federal government, private foundations, and private industry — state dollars help pay for the basics that attract those outside dollars.
Reports consistently show that college graduates in Wisconsin can expect to earn less than their counterparts elsewhere, which makes it harder to keep the best and brightest home. For example, average engineer salaries for job postings in Wisconsin are 11% lower than average engineer salaries nationwide, according to January data from Indeed.com. Wisconsin companies might want to consider paying what it takes to attract and retain talent versus blaming the UW System for not launching duplicative engineering programs.
To be sure, the UW System has done its part to erode decades of bipartisan credibility. The budget reserve disclosures two years ago caused some lawmakers to question whether the university was hiding money while raising tuition. The political result was a tuition freeze. Former UW-Madison Chancellor Biddy Martin also found herself in a bind a few years back when she proposed autonomy for the UW-Madison — but not the rest of the system, which lobbied against her plan.
The budget reserve issue has been partly explained by a breakdown of how many dollars are required reserves that are tied to research and other long-term commitments, and how much money is kept as a standard operating reserve. As UW-Madison Chancellor Becky Blank told the business-led Wisconsin Technology Council board of directors last week, “If any of you were carrying the level of uncommitted balances that I am, they would fire you.” In her case, that’s 1%.
Still, there are reasons to ask why the UW System doesn’t consolidate more budget procedures, similar to what’s done in other states. Lawmakers have also raised questions related to possible program overlap between the UW System’s two-year campuses and the Wisconsin Technical College System.
With new leadership in place on the Board of Regents, in the UW System, and on many major campuses, the receptiveness to change should be high. After all, many regents are Walker appointees, and the Republican-led Legislature appears to have warmed to new System President Ray Cross.
The coming debate will test whether the Capitol wants to reform higher education in Wisconsin or punish it. The former is an ambitious goal; the latter could harm efforts to build Wisconsin’s knowledge-based economy.
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