Katharine C. Lyall, President
University of Wisconsin System

I’d like to start by giving you a brief update on the state’s current fiscal condition and how it may impact the UW System. On February 20 the Legislative Fiscal Bureau released its revenue and expenditure estimates for the remainder of the current biennium (through June 2005). The Fiscal Bureau projects that the balance at the end of the biennium will be -$72 million (comprised of a $32 million budget imbalance and a $40 million required cushion). After several years of deficits reaching towards $1 billion, this looks manageable.

However, these projections do not include funding shortfalls projected for four areas, the largest of which is Medicaid assistance. The Legislative Fiscal Bureau report notes that if the state is unable to secure additional matching federal funds, $401 million in additional state funding would be needed to support projected Medicaid assistance benefits through June 2005.

As we know, when the state budget gets a cold, the UW budget catches pneumonia. So we were alarmed when, the week after the Legislative Fiscal Bureau report, DOA asked us for the amount of program revenue funds remaining in several of our PR accounts, including auxiliaries and tuition.

However, last week, the Legislature passed a bill that restructures the state’s debt, yielding one-time savings sufficient to eliminate the projected state deficit for one year. The Governor and Legislature have agreed to work on a long-term solution now that the platform has been set.

In addition to the savings from debt restructuring, the bill reduces the amount of public debt that the Building Commission can issue by $18 million affecting the All Agency fund for maintenance, of which we generally get about half.

We hope that these actions have solved the state deficit for the rest of this biennium and that our base budget will “hold” for the coming year. As you are aware, institutions are already admitting next fall’s freshman class. We will keep you informed of any future lapses that might affect our fall enrollments.

2005-07 budget discussion

Last month, we began our work on developing the Board’s 2005-07 biennial budget request by reviewing the timetable and some of the issues to be presented over the next few months for your consideration. You will recall that our goal is to have your major decisions about the items to include in the 2005-07 request by June and that the Board is required by statute to submit its request in September.

I think we all understand that the economic recovery is not yet robust and that the state must focus scarce resources on those investments that will contribute the most to Wisconsin’s economic revitalization. Our campuses have made an extraordinary effort to maintain access for students while cutting $250 million in GPR from our base budget. Our students, also, have made an exceptional contribution in the form of $500-$700 tuition increases and reduced courses and support services. But these are short term solutions.

In 2005-07, we will have 650 fewer faculty and staff to serve students and the source of financial aid, our auxiliary reserves, which has tied them over a large tuition increase this biennium will be gone. If we are to continue to provide 29,000 graduates for Wisconsin annually, we must focus on future “affordability” of a UW education, especially for low-income families.

Indeed, students must be the centerpiece of our upcoming budget request. As General Electric would say, they bring good things to life—and to the economic future of Wisconsin.

This morning, I’ve asked Associate Vice President Freda Harris to outline a multi-step approach to bolstering financial aid for our students. It recognizes that we must find a way to continue the aid that is being financed this biennium from the one time reserves, that we must also increase aid to parallel tuition increases of next year, and that we must find a way to protect students from low income families as tuition rises in the future.

Wisconsin is moving from a low-tuition/low aid philosophy to an average tuition posture–we must ensure that this transition is matched with increased financial aid for the neediest students.

Good News…

Woman of Distinction

Last week, Dean Janet Philipps, UW-Rock County, was selected as this year’s “Woman of Distinction (Education)” for the Janesville area.

Four- year engineering program

Both the Assembly and Senate approved Representative Debi Town’s proposal to create a four-year engineering program at UW-Rock-County, provided by UW-Platteville. The bill now awaits the Governor’s signature.

UW-Madison professor elected to National Academy of Engineering

UW-Madison Engineering Physics Professor John Perepezko has been elected to the National Academy of Engineering for his innovations in processes to produce nanostructured and amorphous materials. The NAE is one of the most prestigious professional associations with 2,174 members worldwide. Professor Perepezko is one of 76 U.S. members elected this year.

Legislature helps UW save costs

I’d like to express publicly my appreciation to Representative Jeskewitz and Senator Harsdorf and their staff for help in shepherding through Senate Bill 247 which will enable us to save administrative costs by providing certain freshman orientation material to students electronically rather than through print materials. This information (14 pages) on sexual assault is required by statute to be provided to all new students, so this action helps us meet a mandate in the most cost-effective manner.

UW-Oshkosh business students score

UW-Oshkosh business students are getting a better education in business than most of their counterparts nationally according to 2003 results of the ETS (Educational Testing Service) major field test in business. UW-Oshkosh students scored in the top five percent of students among nearly 80 other schools whose students took the same test. The ETS major field test in business measures basic knowledge and understanding gained by students in the core undergraduate curriculum.

UW-Madison gets $10 million grant

UW-Madison psychologist Rich Davidson has received a $10.7 million five-year grant from National Institute of Mental Health to explore what makes a particular individual more emotionally resilient to adversity. Using brain imagining technology, researchers will investigate the mechanisms underlying how our brains regulate both positive and negative emotions. This work builds upon the interdisciplinary strengths of Madison faculty in several fields which has captured national attention.

UW-Extension helps with agricultural management

UW-Extension’s Conservation Technology Transfer Program is helping Wisconsin producers address agricultural management challenges and conservation planning that supports USDA’s Agriculture Farm Bill. The program matches $750,000 of federal funding with $2.25 million of state and local funding to support educational programming in the statewide network of River Basin Education and UW Discovery Farms as well as UW-Madison College of Agricultural and Life Sciences and UW-Platteville’s College of Business, Industry, Life Science and Agriculture. Since 1999, when the program began, 437 Wisconsin farmers have participated–300 more will participate in 2004.

Dr. Seuss at 100!

Finally, I can’t let the opportunity pass to recognize that this past Tuesday marked Dr. Seuss’s 100th birthday. It was also Read Across America Day. Theodore Geisel (alias Dr. Seuss) attended the Springfield, Massachusetts public schools, then Dartmouth College and Oxford University. He was expelled from the Dartmouth student newspaper for drinking on campus but managed to sneak back using his mother’s maiden name: Seuss. During his long career, he has been an ad man, part of an Army propaganda unit making films with Frank Capra, an editorial cartoonist for a New York daily, and a best-selling author of The Cat in the Hat, Green Eggs and Ham, How the Grinch Stole Christmas, and my personal favorite Horton Hears a Heil! (a compendium of his antifascist cartoons).

New Voters Project

A last reminder to UW chancellors: Campus Compact, United Council, and the New Voters Project will be meeting this afternoon at 1:30 at the Risser Justice Center down on the Square, to establish plans for a student voter mobilization drive on campuses statewide. This is an important effort to equip UW students to vote and make a difference in the upcoming elections. I support this drive and hope that all UW chancellors will do so, as well.