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March 7, 2002

Contact: Erik Christianson
(608) 262-5061

Thursday Remarks to the Board of Regents
by Jay L. Smith, Board of Regents President

UW System Board of Regents President Jay L. Smith made the following remarks on the state budget situation to the full board at this morning's regents' meeting.

  • Before we begin today's presentations, I want to update you on the budget cut deliberations going on downtown.
  • First, a reminder that Governor McCallum's budget repair bill recognizes the need to invest in the future and to protect education as a "core state value." The Governor chose not to cut all state agency budgets equally across the board, but to spare the university from some of the harshest cuts.
  • In return, we agreed to manage our share of the cut without cutting enrollments. This is a very tough order for our campuses.
  • Under the Governor's plan, we are taking a $10 million cut this fiscal year and would be slated for a $41 million cut in 2002-03. President Lyall did an excellent job at our last meeting briefing us on the impact of these cuts. While bruising, the cuts would leave us with some ability to meet our economic development goals.
  • At the same time, these cuts will put the brakes on our ability to grow enrollments, help the state train new workers and create more higher paying jobs because they take away much of the funding for our economic stimulus package.
  • Since our last meeting, the Joint Finance Committee has taken action. I want to share my concerns about some of these actions, and the growing sense in some quarters that state legislators should cut state agencies and the university more deeply to be fair to local governments.
  • Let me remind you that the Governor's proposed $51 million cut is roughly the size of the budget for our UW College System. It is more than the entire budget, from all sources, for two of our comprehensive campuses. It represents GPR support for 10,000 students. This is not a trivial cut.
  • The Joint Finance Committee has increased the total cuts to all state agencies by $23 million, raising the overall percentage cut to 6%. They didn't specify how this cut would be taken, but it could mean an additional $8 to $9 million cut on top of the $51 million already on the table for the UW System.
  • Under the Governor's plan, our $51 million cut in '02-'03 would account for almost 50% of the total cut to state agencies, but we are only 37.5% of state operations.
  • A further concern is that the Joint Finance Committee's action yesterday would also cap our tuition growth at 8%. To each student, the difference between an 8 percent and a 10 percent increase is about $30 a semester; to the UW System the difference represents a potential $10 million in lost revenue or support for 2,000 students.
  • If these additional cuts and caps come to pass, the University of Wisconsin System will have only one option - to reduce enrollments. We would be forced to cut some 2,000 students for every additional $10 million cut from our GPR base.
  • Ironically, these tuition caps will not make the university more accessible - it's just the opposite. They will cause us to deny access to qualified students.
  • There may be legislators who believe that additional cuts could be made to the University of Wisconsin System without significant impact in their communities.
  • That is not the case.
  • I have watched the Board of Regents and our administrative leaders steadily cut and reallocate base budgets for the past six years. We have cut to the bone and beyond. Ninety-nine cents of every dollar that the UW dollar gets, goes straight to our campuses and is spent in their local communities around the state. Let me repeat -- ninety-nine cents of every dollar that the UW dollar gets, goes straight to our campuses and is spent in their local communities around the state.
  • Let me be clear: when we are cut, our campuses bleedÂ… And their local economies feel the pain.
  • State cutbacks and restrictions will diminish the University's ability to increase enrollments and fly in the face of the findings from our two statewide economic summits.
  • More than a thousand people from throughout the state came together on both those occasions and agreed that education is the key to a healthy Wisconsin economy.
  • Our economic stimulus package which passed the legislature about six months ago addressed this state's need to provide college opportunities for more of our citizens and to train our workers for the 21st century economy.
  • The actions by the Joint Finance Committee to cut us further and to reduce our revenues through arbitrary tuition caps is short sighted. In the long run, it will hurt the economy of Wisconsin.
  • The public senses the need. They are voting with their feet. While we are being cut, thirty-five hundred more students have applied for admission to our campuses next fall. We will have to refuse them. And competition for our remaining slots will become even tougher.
  • And if the Joint Finance Committee action stands, we will have to cut back enrollments further. This comes at a time when many people who have been laid off from their jobs are seeking to return to school or to get a graduate degree. With additional cuts or tuition caps, we will have to deny them access.
  • Rolling back our enrollment means lost local revenue. Those thousands of students have a major impact on local businesses - they rent apartments, eat out, buy books and work in their local communities.
  • Rolling back our enrollment means cutting UW jobs in communities around the state - Eau Claire, Green Bay, LaCrosse, Oshkosh, Stevens Point, Milwaukee. These are important jobs, good jobs in our local communities, and I believe they are at risk.
  • We have been the victims of our own success in some ways. Fifty-five million dollars in budget cuts have been absorbed by the UW System in this past decade without cutting enrollment.
  • The President and our Chancellors have done an excellent job of preserving the system. With fewer state dollars, they have managed to improve our quality, our retention, our credits to degree, our access. They are talented managers but they are not magicians.
  • Their ability to maintain quality and access will end here if the legislature cuts deeper than the Governor's proposal.
  • The governor proposed a 10% cap on tuition increases and we pledge to manage within that guideline, even though our tuition is one of the lowest in the country.
  • Joint Finance has lowered that cap to 8 percent. If their cap and other cuts stick through the budget process, the only recourse is to shut our doors to many deserving students. Otherwise, we may permanently jeopardize the quality education of which our citizens are so proud.
  • A much better solution on tuition is to ensure that financial aid will parallel tuition increases so that both access and affordability can be maintained.
  • Given the Joint Finance Action, I am asking the president to report to us early next week on the impact of the 8% tuition cap and the Joint Finance cuts. We want to know the impact on our campus budgets, student access and the economic stimulus plan.
  • Based on what that shows us, we will take further action. It appears to me sitting here today, with the information I have today, without further information, we may have to ask the Regents to direct our chancellors to begin immediately sending conditional letters of admission to all applicants not yet accepted to the University of Wisconsin System at this date. This would be an unprecedented measure and one that we would prefer not to take.
  • Given that the budget will next go to the Assembly and then go to the Senate, I am asking Fred Mohs, our Regent legislative coordinator, to lead a team of Regents to carry our message very clearly to friends in the legislature. The campuses and our system staff have been working hard at this but I think they need our help.
  • I have asked the UW System to draft a letter to go to every member of the state assembly, where the budget will next be discussed, outlining the university's potential, serious fiscal situation and asking for their support on our budget.
  • I continue to believe that the people of the state and their elected leaders want a great university system. Our university is known around the world and that is a point of pride to all of us.
  • Further, we need a great university if we are to get Wisconsin back on its economic feet. This is not a time to be forcing enrollment reductions; the state badly needs our graduates, 80 percent of whom stay and work in the state. The state needs our instruction, our research, our technology and our public service.
  • We need to grow Wisconsin's economy, and the university is the engine for that growth. I urge our friends in state government to keep this in mind as they deliberate on the complex budget issues that are before them.
  • Our message to the legislature and the people of Wisconsin must be clear: do not cut the university system further. Stick with the Governor's budget repair bill. We will do our part to manage in these difficult times but beyond that, we will have no capacity to help the economy of the state.