Jay O. Rothman, president of the University of Wisconsin System, speaks during the UW Board of Regents meeting hosted at Union South at the University of Wisconsin–Madison on Feb. 9, 2023. (Photo by Althea Dotzour / UW–Madison)
The Universities of Wisconsin Administration released a third-party report on its finances Monday, announcing plans for how it can better and more efficiently support the state’s public universities as the system faces declining enrollment and increased scrutiny from Republican lawmakers.
The report’s release comes after Assembly Speaker Robin Vos said that the system’s $855 million budget request was a nonstarter — even though system President Jay Rothman agreed to Republican demands for changes to the system’s diversity, equity and inclusion policies.
“Right now, the Universities of Wisconsin are 43rd out of 50 states in the nation in terms of public support for our universities,” Rothman said on WISN’s UpFront on Sunday. “The $855 million gets us up to average, gets us up to the median. That, to me, in the context of a long period of time where the universities have not been invested in, is a reasonable ask.”
The release of the report, from the consulting firm Deloitte, on the system administration’s finances comes after similar reviews of the finances of the 12 University of Wisconsin schools outside of UW-Madison. Ten of those schools have been operating at a deficit as budget support from the state government has decreased and enrollment numbers have declined. Only the Madison, La Crosse and Stout campuses have been projected to create enough revenues to cover their expenses.
A strategic plan implemented by the UW Board of Regents in 2022 calls for structural deficits to be resolved by 2028. A decade-long tuition freeze implemented by Republican lawmakers was ended in 2022 and earlier this year, the Regents approved the second tuition increase in two years.
“The independent third-party review that has now concluded complements our strategic plan, adopted by the Board of Regents two years ago,” Rothman said in a statement. “It provides us insight on how better to provide unparalleled educational opportunities for Wisconsin students, improve Wisconsin communities, and help Wisconsin win the War for Talent.”
The report notes that each campus is run independently and that system administration needs to do a better job clearly stating what its goals are so campus leaders can plan effectively.
There is a need to improve systemwide accountability, while leaving space for the unique identity and culture of each campus, as the Universities of Wisconsin is the sum of its parts, ultimately rolling up to singular financial statements.
“Without a clear tactical vision and roadmap for the future of UW operations, it is difficult for university leaders to make informed decisions about investing in operations and/or strategic priorities,” the report states. “UW universities would benefit from a strategic roadmap across administrative, operations, technology, programmatic, and enrollment initiatives.”
Efforts to solve the system’s financial woes have already been underway, with a number of branch campuses across the state being shuttered and faculty and staff at several universities facing layoffs.
The release of the individual campus financial reports in April drew concerns from faculty and students that the system would lean on austerity measures to balance the budget, harming their jobs and educational opportunities when the true cause of the struggles is the lack of financial support the system has gotten in the state budget.
Monday’s report recommends that the system administration do more oversight of academic program creation and management, noting that the number of programs at the 12 non-Madison campuses has grown by nearly 7% while the number of bachelor’s degrees conferred has declined by more than 9%. The report states that system administration should set clear markers for what it means for a program to be successful and better determine if a program should be tweaked, invested in, combined between campuses or closed.
“While creating and curating academic programs should fall within the purview of faculty governance at each university, UW Admin should be accountable for creating transparent policies and processes to provide the data necessary for the Board of Regents to fulfill its role in approving and monitoring programs,” the report states.
With the release of the report, Rothman announced a number of plans to follow its recommendations, including being more active in enrollment management, creating a work group for evaluating low-enrollment programs, increased standards for financial accountability and providing “more effective, customer-focused shared services.”
“These reviews have helped us refine steps to eliminate structural deficits at a number of our universities and embark on a path of long-term financial stability,” Rothman said. “We will continue to make necessary changes across our universities to ensure faithful stewardship of resources and to better serve students and parents, employers, and communities across Wisconsin.”
Bascom Hall, University of Wisconsin-Madison. (Ron Cogswell | used by permission of the photographer)
A study committee on the future of the University of Wisconsin System considered a lengthy list of potential recommendations Thursday that might go to the state Legislature, including separating UW-Madison from the UW System and putting more oversight and limits in place.
The committee, which is made up of 14 members, was tasked with creating legislative proposals to help address ongoing concerns, including financial issues and enrollment, throughout the UW System. It’s been meeting since July.
The current state of funding for the UW System framed Thursday’s discussion. Committee co-chair Rep. Amanda Nedweski (R-Pleasant Prairie) called the UW’s biennial budget request that the state provide an additional $855 million in the next state budget an “unrealistic” increase from the current $1.3 billion in general purpose revenue.
The budget request, according to UW System leaders, would bring the UW campuses to the middle of the pack in terms of state support for public universities across the nation. The additional funding would support an array of priorities, including 8% wage increases for UW staff over the biennium; general operations to help universities meet rising costs through state support rather than additional tuition dollars; mental health services, academic and career advising and civil dialogue training; and investments in innovations.
According to an analysis by the State Higher Education Executive Officers Association (SHEEO), Wisconsin currently ranks 43rd out of 50 states in public funding to support its four-year universities.
Nedweski said pointing to this information is “intentionally misleading” because it doesn’t consider the funding that the state puts into technical colleges. While Wisconsin lags when it comes to funding its four-year schools, the Wisconsin Technical College System (WTCS), where students can earn two-year associate degrees, one- and two-year technical diplomas, short-term technical diplomas and certificates, receives higher than usual funding per student compared to other public two-year colleges across the country.
Nedweski said it was unfair to blame taxpayers for the System’s financial shortcomings.
Sen. Chris Larson said that Nedweski was trying to make the reality of Wisconsin’s funding look better by including the technical colleges. He compared the move to trying to average a runner’s 5k pace with a marathon pace to qualify for a race.
“You can’t throw in the technical college, just for the sake of trying to bump up your average,” Larson said.
Larson noted that technical colleges also operate differently from the state’s four-year schools in that they report differently, have different levels of accountability, and local boards and can count on property taxes in part for their funding.
The committee then turned to the proposed recommendations. Nedweski said recommendations by the committee would signal that the Legislature should explore the ideas further, not that the committee believes the Legislature pass the proposal.
Separate UW-Madison from other schools
The first proposed recommendation was separating UW-Madison from the twelve UW System campuses.
The proposal would create a new Board of Regents to oversee UW-Madison, while maintaining the separate Board of Regents to oversee the other comprehensive universities. Two separate state appropriations to provide general purpose revenue (GPR) funding specific to UW-Madison and for the other comprehensive universities in the UW System are also included in the proposal.
Robert Venable, President and CEO of Miami Corporation Management, said that a Board of Regents that could “focus just on the comprehensive is actually more important in helping deal with those existential issues. Madison is not facing existential issues.”
During an earlier committee meeting last month, other committee members expressed support for the idea because it would help focus on declining enrollment and financial deficits of UW System schools.
This is not the first time that the idea has been discussed. Former Republican Gov. Scott Walker made the proposal in 2011, but the idea never gained the traction needed to become law.
UW President Jay Rothman and UW-Madison Chancellor Jennifer Mnookin expressed opposition to the proposal following a committee meeting last month.
“Our universities are better together, in that they provide Wisconsin students unprecedented educational opportunities in every corner of our state,” Rothman said in a statement. “At a time when we need to address all the challenges in higher education comprehensively, adding more governance, complications and inefficiencies would not serve Wisconsin families and taxpayers well.”
Some ideas focused on requiring more oversight of the UW System, including through requiring more approval from the Joint Finance Committee.
One would instruct the creation of a Wisconsin Higher Education Coordinating Council, which would be appointed by the Governor and subject to Senate confirmation, to advise the UW System and the Wisconsin Technical College System. It would be responsible for establishing statewide higher education goals, making recommendations in furtherance of those goals, reporting data, studying areas for potential collaboration and providing required pre-approval before closure of any campus.
Two recommendations focused on how the UW System distributes its state general purpose revenue.
One of those would require the Board of Regents to publish the formula it uses to allocate state funding to each UW campus and to review it every two to five years. It also included potentially having the Joint Finance Committee approve the allocations.
Former Vice President for Administration at the UW System James Langdon described the allocation formulas system as a “black box.”
“There’s been a stunning lack of transparency when it comes to the GPR allocation… The campuses have suffered from it over the years,” Langdon said, adding that the formula doesn’t get reviewed with the rigor that it should.
The other proposal suggested funding be distributed proportionally based on a per-capita or per-FTE basis. It comes as some, including the UW-Green Bay Council of Trustees, have said the current way of allocating funding isn’t clear and transparent.
Shauna Froelich, an associate professor at UW-Green Bay, said the current way of allocating funds has created an inequity in the system.
“There can be solidarity in stating we want to understand the formula but we also want equality per students, who are taxpayers,” Froelich said. “Just because you live in one region of our state, should you receive double the amount of funding? I think that is clearly inequitable. I understand that research institutions will need a higher cost and that can come through tuition, that can come through a special amount granted possibly by the president.”
Another proposal includes requiring the UW System to provide the Legislature’s Joint Finance Committee with detailed information on the System’s expenses during the budget cycle and an annual report to the Legislature identifying all current employment positions and salaries.
Another proposal suggests limiting the UW System’s position authority for positions and other non-academic positions that receive compensation of more than 200% of the state median income, and requiring approval from the Joint Finance Committee for each position description and salary prior to posting
Venable said that the final proposal is too close to micromanaging.
“This gets too tactical, too much into the camp of micromanagement,” Venable said. “We got to rebuild trust but I don’t think this is the right way to get at it.”
Several of the proposed recommendations were raised by Nedweski. She said some of those were suggestions made by other people to her legislative office.
One of those proposed recommendations would create a “College of Applied Arts and Science” that would be meant to grant students a bachelor’s degree in three years.
“What if we had a single college that didn’t have every single offering, that had offerings that are in high demand and that are offerings that can fill gaps in our workforce skills, and there were no extras,” Nedweski said. “There’s no athletics. There’s no student services. There’s no instructional support.”
Nedweski said the proposal would get at the “bare bones” of the cost of education, and suggested it could be a 10-year pilot program.
UW La Crosse Provost Besty Morgan said she doesn’t see how the proposal would add value.
“I’m not 100% sure. We’re not already doing this,” Morgan said. “A student who wanted to complete an online degree at the UW can easily do so and it’s much cheaper than doing Phoenix.”
Morgan also said that the services offered at universities are like taxes.
“We don’t often get to choose that we only want it to go to support this, not that. That’s a little bit what universities are like. I might not want to support athletics, but I sure want that mental health counseling center,” Morgan said.
Another proposed recommendation by Nedweski would require the UW System and technical colleges to have universal course numbering to ensure credit transfer and require UW System schools to accept technical college liberal arts graduates and waive bachelor’s degree general education requirements.
Froelich, an associate professor at UW-Green Bay, brought up an issue that wasn’t included on the list of proposed recommendations. She said staff pay needs to come up to the median pay, and that the issue needs to come up in the next budget.
Other proposed recommendations included:
Increasing tuition
Giving the UW System and/or UW-Madison limited bonding authority
Creating a formalized process for completing exit interviews with non-completing students
Tasking the Board of Regents with reviewing and evaluating program offerings within the UW System on a regular basis
Creating a Blue Ribbon Commission on Public Higher Education in Wisconsin
Creating an Office of the Student Loan Ombudsman in the Department of Financial Institutions and requiring the office to license student loan servicers
Centralizing UW-Madison and UW System Administration
Creating a regional governance model for UW System
Members of the committee will vote on the proposed recommendations. Those that receive a majority vote by committee members will be included in a final report, which will be submitted to the Joint Legislative Council.
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