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April 10, 2003

University of Wisconsin System Board of Regents
April 2003 Meeting
Day One News Summary

Budget cuts prompt UW System to evaluate its long-range future

MADISON - The University of Wisconsin System must carefully examine how budget cuts may affect the UW's mission and long-term capacity to maintain quality and excellence, members of the Board of Regents recommended Thursday (April 10).

In suggesting such an analysis, members of the board urged a system-wide comprehensive study to consider how the face of the university should look in 2005 and beyond.

"If these cuts should grow or if tuition should increase even more, the effects on our campuses and on our students will be devastating," said Regent President Guy Gottschalk of Wisconsin Rapids. "The spirit of the Wisconsin Idea is alive and well, and ordinary people who care about Wisconsin are depending on us to be here when the dust settles to work on a rebuilding process."

The suggestion to re-evaluate the university's long-term future first arose during a series of listening sessions about the state budget during March, Gottschalk said in a report summarizing the sessions for the full board.

Approximately 150 people attended the five listening sessions, including UW students, faculty and staff; alumni, parents, community leaders, K-12 administrators, business owners and local government officials. All offered valuable insight and constructive suggestions about how the UW System should manage cuts to its budget, Gottschalk said.

Gov. Jim Doyle's 2003-05 budget proposal includes plans to cut $250 million in state support for the UW System. Doyle has proposed tuition increases to offset some of the reduction, which if approved by the Legislature, would still leave the university with a $100 million cut.

Gottschalk said the listening sessions proved that there is an overwhelming amount of public support for the university. Attendees testified that UW campuses are vitally important to the quality of life and economies of local communities, and many held out higher education as the best way to secure the state's financial future, he said.

Gottschalk said several themes recurred across the five sessions: quality, access, tuition, financial aid, the impact of the cuts, economic development, K-12 education and the UW's impact on quality of life.

Students, faculty and community partners all urged the board to maintain the quality of a UW education, he said.

"We should not compromise on that point, even at the expense of access, because a poor quality education is not worth the price," Gottschalk said. "Excellence is something that can erode quickly but can take years to rebuild once lost."

Attendees also asked the regents to maintain high access rates to the UW System. Gottschalk said it was painful when the UW Colleges had to turn away students last year for the first time in their history. "Many question why we must reduce access at a time when demand on all of our campuses is so great," he said.

Gottschalk said attendees had mixed feelings on the governor's proposal to increase tuition. Some students testified that increased tuition would cause personal hardships, but others said they would pay more tuition to maintain quality. Many parents, he said, described UW tuition as a "flat-out bargain."

People across the state strongly support increasing financial aid for the most disadvantaged students, Gottschalk told the board. However, parents and students agreed with the regents' position that it is unfair to fund financial aid increases using student fees set aside in reserve for important building projects and urged legislators to find another, permanent funding source, he said.

Many attendees praised campuses for engaging university communities while making plans to manage budget cuts, Gottschalk said. Campuses have followed UW System President Katharine C. Lyall's guidance to protect instruction as much as possible by first cutting administrative expenses and eliminating duplications. But some institutions are still reeling from cuts for this fiscal year, such as the UW Colleges campuses, which have very few faculty members and may have to eliminate entire departments, he said.

Other participants in the listening sessions, including mayors and elected officials, business owners and economic development directors, questioned the state's push to cut the UW. Gottschalk said they credited UW graduates, research spin-offs and programs for business owners and entrepreneurs for providing tangible returns on the state's investment and opportunities for regional and economic growth.

Gottschalk said he was also struck by the close partnerships between UW campuses and local school districts. Many listening session attendees reminded the board that K-12 schools are also grappling with budget cuts and stressed that UW education graduates are desperately needed to teach in Wisconsin schools, he said.

On a more emotional level, others extolled the UW as a great contribution to the quality of their lives. Gottschalk said this was a sound reminder that the UW is not only important to the future of the state, but also holds a special place in the hearts of Wisconsin citizens, from those who enjoy dance recitals in Stevens Point to those who volunteer for public service in Milwaukee.

"In many cases, our institutions have lifted the quality of life for generations within families," Gottschalk said.

Participants also suggested that the UW System should contribute its intellectual capital toward assisting the state in redesigning its fiscal base to ease the transition from manufacturing to a service-based economy, he said.

"We must work with the President, the Chancellors, state leaders and our constituents to chart the best course possible for the university's future," Gottschalk said. "A lot of people are depending on us. We are obliged to carry on our predecessors' traditions of access, excellence and affordability in this era."

Regent Patrick G. Boyle of Madison agreed with the proposal to carefully examine the future mission of the UW System, and suggested that a comprehensive study of the university's commitments and programs should begin as early as this summer.

"I sincerely believe the students are right when they say they are going to pay more and get less," Boyle said. "We need to develop a vision and direction which would reflect what we want for this system in three to five years."

Regent Jay L. Smith of Middleton suggested that campuses should also develop a small set of indicators to measure how the quality of campus offerings changes over time.

"This is a system that evolved over many, many years," Smith said. "But we're going to be a different institution after these cuts. We have to protect this university. We were put on this board to do that."

Student Regent Tommie L. Jones, Jr. of Oshkosh said the listening sessions were a rewarding chance to hear how the UW System affects the lives of so many. Jones urged the board to especially consider the future impacts of changes in tuition and financial aid in a long-term plan.

Regent Jonathan Barry of Mount Horeb reminded the board that overall enrollment has increased over the last decade without matching funding to cover the costs of instruction. If state funding continues to decrease, he said, the board should consider adjusting future enrollment.

The recent growth of the overall size, enrollment and mission of the university is largely due to demand from legislators and citizens, according to Regent Fred Mohs of Madison. He recommended that campuses maintain their competitive edge for top faculty and outside grants when making budget decisions.

"We have to keep in mind the greatness that is going to be our future," Mohs said.

Regent Danae Davis of Milwaukee said she fully agreed with the urgent need to invite stakeholders for a frank discussion of the university's future.

"This goes beyond funding," she said. "We need to find a way to come to common ground with all stakeholders and then build off of that common ground. We need not just dialogue, but actual planning."

Remarks by Regent President Gottschalk
UW System Budget Update website

Lyall updates board on Building Commission approval of UW projects

The state Building Commission has approved $51 million in state bonding for UW maintenance and renovation projects in the next budget biennium, offering a bright spot in an otherwise dim budget outlook, UW System President Katharine C. Lyall told the board on Thursday.

"The fact that our projects are withstanding this scrutiny is evidence of effective priority setting," she said.

The approval will allow the UW to avoid a large maintenance backlog in coming years, she said. The commission also approved necessary funding to continue phased construction projects already in progress, including upgrades in equipment, technology and campus utilities, she said.

Lyall said the UW System also hopes to persuade the Building Commission to allow projects funded entirely with gifts, grants and program revenue to proceed, as these projects require no additional funding commitment from the state.

UW System studies show college graduates report increased financial, social well-being

Two ongoing UW System studies show that college graduates enjoy more immediate and long-term financial, social and health benefits than average high school graduates, according to presentations before the board on Thursday.

The first study, produced by the UW System's Office of Policy Analysis and Research, shows that average earnings of 1979 UW System alumni 20 years after graduation was $53,000, slightly more than a 100-percent increase over starting salaries of recent graduates.

The greatest growth was in the average salaries of business and engineering graduates, with less growth in the average wages of nursing and education graduates, according to Frank Goldberg, associate vice president for policy analysis and research.

"These preliminary results dispel myths and confirm realities at a time when the Legislature is debating how much to support higher education," Goldberg said. "Clearly there is the potential for tremendous growth in earnings when someone completes a college degree."

The OPAR study was conducted in cooperation with the Wisconsin Department of Workforce Development and corroborates a 2000 analysis of where UW alumni live and work. According to the most recent findings, 82 percent of UW System graduates from Wisconsin either work or live in the state immediately after graduation, including more than 90 percent of education, nursing and liberal studies majors and 70 percent of engineers.

"These are very positive figures, which show once again that the UW System is contributing to a 'brain gain' for the state," Goldberg said.

The board also heard a report on the long-run effects of postsecondary education from Robert M. Hauser, the Vilas Research and Samuel A. Stouffer Professor of Sociology at UW-Madison and director of the Center for Demography of Health and Aging.

Hauser reported on the impact of a college education as discovered through the Wisconsin Longitudinal Study, which has been examining the education, careers, family and health of Wisconsin high school graduates from the so-called "Happy Days" class of 1957.

The study involves more than 50 researchers in a variety of academic disciplines who track and survey the class of graduates, most of whom are now reaching the retirement age of 65, he said.

Among the findings presented to the Board of Regents, Hauser said that college graduates in his study, as compared to high school graduates, showed greater average salaries and growth in earnings; had obtained more net financial assets; more often reported their health as excellent; were less likely to smoke cigarettes; and were more likely to volunteer and make financial contributions of more than $500 to charities.

"College pays - it really pays," Hauser said. "There are big public and private benefits."

Hauser told the board that, thanks to renewed funding from the National Institute on Aging, future plans for the Wisconsin Longitudinal Study will include new surveys of graduates, siblings, spouses and widows and will focus on family, health and retirement.

"This study is very much alive," he said.

News Release
UW System Research Bulletin [PDF]
Goldberg's PowerPoint presentation [PPT]
   PDF Version
Hauser's PowerPoint presentation [PDF]

Regents approve Medical School plan

The Board of Regents on Thursday unanimously approved a plan from the UW Medical School to improve public health statewide and conduct medical education and research with proceeds from the conversion of Blue Cross and Blue Shield of Wisconsin to a for-profit organization.

Board approval was required for the five-year plan, which did not include an earlier proposal to set aside some of the proceeds in an endowment to help construct the Interdisciplinary Research Complex at the Medical School.

Phillip M. Farrell, dean of the Medical School, said the school's Oversight and Advisory Committee decided to drop the building from the plan.

"The building was confusing to some folks and was distracting people from the overall positive benefits of the plan," Farrell told the regents. "We recognized that we had other options that are possible to help fund the building."

UW-Madison Chancellor John Wiley said the IRC facility is critical to the Medical School's future plans, but the university has struggled to raise private funding for construction. "The building remains important and presents a great challenge, but we will do it," he said.

Regent Peggy Rosenzweig of Wauwatosa called the five-year plan a "win-win" proposal, because the IRC facility will still be constructed and the overall plan can keep moving forward.

The five-year plan now goes to the Wisconsin United for Health Foundation for approval. The public-health foundation was created by the state insurance commissioner to manage the expected $185 million in proceeds from the for-profit conversion of Blue Cross and Blue Shield of Wisconsin.

The UW Medical School and the Medical College of Wisconsin will each receive half of the proceeds. Of the proceeds, 35 percent is designated for public health initiatives, and 65 percent is slated for strengthening medical education and research.

Farrell said the goal of the plan is to make Wisconsin the nation's healthiest state.

Read the Medical School's plan
Dean Farrell's presentation [PDF]

Professor discusses campus climate issues with Regents

Students' perception of campus climate can affect how well they learn and if they continue on in college, the Board of Regents learned Thursday.

Alberto Cabrera, professor of education at UW-Madison, briefed the board on the latest research concerning how students view the issue of campus climate, especially female and minority students.

Cabrera said the topic is an important one, because research shows that African-American and Hispanic students are more likely to drop out of college than white students. In addition, one-third of female students in science, technology, engineering and math surveyed in a major national study said they transferred into other fields because of "chilly climate" and poor teaching methods, he said.

"Campus contexts or climates can affect the cognitive and affective development of the student," Cabrera told the board.

Cabrera said campus climate can improve through improved faculty classroom practices, such as not singling out minority students in class, and studying differences in learning styles among different ethnicities. He also said campuses can reinforce campus practices that enhance openness to diversity.

Chancellor John Wiley of UW-Madison said his campus is perceived as unwelcoming by many minority students, and "we need to work on it," he said.

Regent Fred Mohs of Madison said he believes some of the research related to campus climate is "dubious" and influenced by certain philosophical and political beliefs. "We know where we want to get, but it's complex," he said.

Wiley said he was concerned that credible research in the social sciences is not taken as seriously as it once was. As an example, he cited the economics research at UW-Madison in the early to mid-1900s that led to the nation's first worker's compensation, unemployment insurance and Social Security provisions.

Regent Jonathan Barry of Mount Horeb said that the issue of climate at the Madison campus is not just a university issue, but an issue that is a problem throughout Madison. He mentioned he has had trouble recruiting minority employees for businesses with which he has been involved because Madison has a reputation for being unfriendly to minorities. He encouraged city leaders, university officials, business owners, Chamber of Commerce officials and local clergy to work together to improve the situation.

Regent Jay Smith of Middleton reminded the board that improving campus climate and curriculum is one of the main tenets of Plan 2008, the UW System's 10-year plan to increase diversity.

Professor Cabrera's PowerPoint presentation {PPT]
  PDF Version

Education Committee reviews minority student enrollment

The Regents' Education Committee Thursday accepted the 2002 Minority and Disadvantaged Student Annual Report with "concern about the progress being made." Although new enrollments of students of color were down for the first time in seven years (1.5%), the overall numbers in the UW System were up slightly (2.9%).

Regent Jay Smith of Middleton shared concerns raised by Proctor and Gamble about not being able to recruit a diverse workforce when interviewing on the UW-Madison campus. Every other Big Ten university has double-digit percentages of minority students, whereas UW-Madison has less than 9 percent, Smith said.

Regent JoAnne Brandes of Sturtevant expressed concern that no one is listening to businesses that say a diverse student population is a necessity.

The committee also approved a report on sexual assault and harassment on UW campuses. The summary noted that reporting of assaults increased from 151 in 2000 to 190 in 2002.

The committee learned that to complete this report, institutions adopted consistent definitions and agreed to disseminate information to reduce the incidence of sexual assault. Regent Roger Axtell of Janesville suggested that the specific numbers also be shared with legislators and the Wisconsin Department of Justice.

The committee also authorized new programs at UW-Stevens Point in web and digital media development and a Ph.D. in health sciences at UW-Milwaukee. Regent Axtell reminded members that these two programs were meeting specific needs of society and were being forwarded frugally with no new GPR spending.

Business and Finance Committee reviews board's role in administering budget cuts

Members of the Business and Finance Committee Thursday discussed the regents' role in approving or overseeing any cuts to campus operating budgets necessitated by the governor's proposed GPR reduction to the UW System's 2003-05 budget.

It was reported that campuses are drawing up budget plans, due to UW System by the end of April. The Offices of Budget and Academic Affairs will then review the plans with an eye toward the principles developed by UW System President Katharine C. Lyall to manage the cuts (administrative reductions, eliminate program duplication, seek tuition increases and consider enrollment cuts as a last resort).

Regent Tommie L. Jones, Jr., of Oshkosh noted that the campuses have had well-delineated processes to achieve the necessary reductions and have gone through the shared governance process in these determinations, cautioning the regents not to micromanage the process at the UW System level.

Regent Jose Olivieri of Milwaukee noted that campuses do seem to be following the guidelines laid out by the president. But, he said, the regents would like to receive campus plans as soon as possible so they can be adequately informed and raise relevant questions prior to the June meeting, when the annual budget likely will be passed. It was noted that changes may come as a result of Joint Finance Committee action on the university budget, so the campus cuts will represent a "moving target."

The committee reviewed and approved the preliminary 2003-04 budget allocation decision rules. It was noted that the formula for cut allocations was developed a decade ago and in the course of the regents' long-range planning, the board should work with the UW System to re-examine the formulas to see whether they truly reflect the current situation vis-à-vis enrollment, GPR funding and mission.

In other committee business, Trust Funds Manager Doug Hoerr presented a report on the comparison of UW Trust Fund growth using data from the National Association of College and University Business Officers (NACUBO). The study included 447 private and 207 public institutions.

With assets of $284 million, the UW System Trust Fund ranks 154th in size. Hoerr reported that the UW's trust funds are allocated between equities and fixed income, with a tenth of a percent allocated to private capital. This is roughly in line with peer data, as is the UW trust fund's one-year loss of 6.3 percent and 10-year gain of 9.6 percent.

In addition, Vice President for Finance Deborah A. Durcan presented an update on trends in federal and nonfederal gifts, grants and contracts for UW System institutions. She noted that there has been strong progress, especially in federal awards, which have increased by $46.1 million over a five-year period (not including growth at UW-Madison). Campuses with especially strong growth in federal funding, outside of UW-Madison, were UW-Milwaukee, UW-Oshkosh and UW-Stevens Point.

Durcan also reported on private fund raising and discussed whether more specific fund-raising goals should be set for the campuses. Regents agreed that a better stance would be to encourage continued growth and to look at private fund raising as a necessary component of the regents' long-range planning effort.

Durcan also reported that the Joint Finance Committee held a hearing on Wednesday (April 9) and modified the university's proposal to meet an $8.3 million lapse in spending for this fiscal year. The JFC removed cuts to instructional budgets at four campuses and added the amount-$361,000-to the UW System's $177,000 lapse amount.

Durcan said there was no plan yet on how the UW System would meet this cut. She also noted that the UW System is $10.7 million short in this year's utility budget, marking the fourth year that allocated state funding has been insufficient to meet the university's rising utility costs.

Physical Planning and Funding Committee learns UW building projects can proceed

Nancy Ives, UW System assistant vice president for capital planning and budget, reported to members of the Physical Planning and Funding Committee Thursday that the State Building Commission approved approximately $385,000 for various UW projects at its March meeting.

In a follow-up to February's committee meeting, Ives reported that the majority of UW System building projects put on hold earlier in the year have been approved to proceed. Ives explained at the February meeting that the Wisconsin Department of Administration put the building projects on hold as part of a statewide review process. Ives said an appeals process will begin for projects that were not approved but still have available funding.

In other business, the committee heard a panel discussion from four campuses on residence hall planning activities. Representatives from UW-Eau Claire, UW-Green Bay, UW-Madison and UW-Stout discussed various aspects of residence hall facilities, including remodeling, replacing, apartment-style design and financing.

The committee also approved the following resolutions:

  • $4,891,000 program revenue supported borrowing to construct fire sprinkler systems for UW-Oshkosh's Scott Residence Hall and Gruenhagen Conference Center.
  • $1,462,000 program revenue supported borrowing to construct an elevator renovation project for UW-Oshkosh's Scott Residence Hall and Gruenhagen Conference Center.
  • Authority to exchange two university-owned parcels of land at UW-Oshkosh plus $115,850 program revenue cash for one parcel of land adjacent to campus owned by the city of Oshkosh.
  • Authority to increase the project budget for UW-Madison's Mechanical Engineering Power Equipment Cooling System replacement project by $70,000 of non-GPR institutional funds for a revised total project cost of $303,800.

Friday meeting

The Board of Regents will resume its April meeting on Friday (April 11), starting at 9 a.m. in Room 1820 Van Hise Hall on the UW-Madison campus.

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