On February 18, Governor Doyle unveiled his state budget proposal for 2003-’05.

We recognize the seriousness of the budget constraints facing the state of Wisconsin and we appreciate the difficult job that the Governor and his staff faced in balancing the 2003-05 budget. Furthermore, we expected to be called upon to do our fair share to help the state close the budget gap.

At the same time, the cuts presented for the University of Wisconsin System are of an unprecedented magnitude—$250 million over the two-year period—far greater than the cuts delivered to most other state entities.

The Governor proposed some tuition increases to offset a part of that cut and we especially appreciate his addition of financial aid to help offset tuition hikes for our poorest students.

But even with the full tuition increases, the university system will be left with a huge hole in its budget. And there are no easy ways to close this gap—especially given the fact that demand for our services is rising while state support is falling.

As Regents, we take very seriously our role as stewards of public higher education for this state. And we have a system that is in jeopardy of becoming less accessible, less affordable, of lower quality or all three. I’m starting to sound like a broken record, I’m afraid. Indeed, the trends of the past decade should worry all of us in terms of state commitment to public higher education.

In a moment, President Lyall will go over the proposed budget and its implications for our university system in more detail. But, first, I thought it would be helpful to look at the proposed budget cuts in context.

In the past decade, we have settled into a worrisome pattern. Our overall trend lines show enrollments rising, relative GPR support declining and related to that, tuition rising.

If we look at the UW System revenues over the past decade, you will note that state appropriations when adjusted for inflation are flat while tuition and fees and other sources have increased. (CHART 1)

At the same time, overall state spending has risen about 70% and the major areas of state spending increases are corrections and K-12 education. (CHART 2) I think, as Regents, we must continue to raise questions about the state’s priorities—given the vital role that this institution plays both in training the workforce of tomorrow and in direct economic benefit to the citizens of the state.

Our budgets in the last decade have been especially difficult to manage because while we have in some cases received increases, they have been followed, sometimes within a few months, by cuts. This chart details the cuts that we have taken in the past decade alone. (CHART 3)

Legislators will point out that the university’s GPR budget has risen during this time and that is correct. The problem is that our GPR budget has barely kept up with the rate of inflation while our cost of business has risen at least at the rate of inflation. Further, we have reallocated to meet almost all of the instructional technology costs during this time, investments in the tens of millions of dollars. Finally, many of our recent GPR increases have gone toward costs that are managed elsewhere such as debt service. Therefore, the cuts have come out of our operating budget and have manifested themselves in ways that have challenged our capacity to maintain access and excellence. As one example, the President has noted in past sessions that we have 700 fewer faculty in the UW System than we did a decade ago.

This chart shows our UW System operating budget for this year. As you can see in the far right diamond, though our state appropriation is $1.08 billion, the money that we actually have flexibility to spend—the funding that supports instruction—is about $910 million, divided among 15 institutions and in support of more than 160,000 students. (CHART 4)

Compounding this fact is that during this decade, our enrollment has grown by more than 10,000 FTE students. As GPR support has remained static and enrollments have grown, Wisconsin has lost ground to other states. Our GPR support per student is now $1000 below the national average. (CHART 5)

This provides some context for the cuts that the Governor has proposed. These funding trends in the face of unprecedented demand raise long-term issues for this board and for our Governor and legislature—issues that we need to address in the coming months. We are concerned about what public higher education in Wisconsin will look like a decade from now. We are concerned about maintaining the UW’s capacity to help the state’s economy recover. We are concerned about pricing students out of higher education. We are concerned about our capacity to maintain the high access rate of which we are so proud.

We will begin that deliberation with a series of listening sessions, the first of which will be held at UW-Eau Claire next Tuesday, March 11. We have scheduled five such sessions around the state. They include Green Bay on March 13, Stevens Point on March 25, Waukesha on March 26 and Madison on March 31. We want to hear from our constituents and community representatives about the impact of past and proposed cuts on their campuses and local economies and discuss the future of the university system with them.

Now President Lyall will review the budget proposals in more detail. Katharine…

Budget Proposal pdf