“Liberty without learning is always in peril and
learning without liberty is always in vain” — John F. Kennedy

This morning, I’d like to give you a brief summary of the Governor’s budget reduction proposal for the UW System and suggest generally how we might handle these cuts and still move forward, although a bit more slowly, on our most important initiatives in 2002-03. The state faces a significant fiscal deficit and the UW System must be part of the solution both by participating in GPR reductions and by moving forward with as much of the Economic Stimulus Package as possible. Simultaneously, we must protect the core educational quality that is basic to all we do.

Governor’s Proposal – recognizes the need to invest in the future and to protect education as a “core state value,” even as reductions are made in these and other state functions. His proposal also envisions a fundamental change in the relationship between state and local governments. Because our institutions are citizens of their local communities, and important economic partners with county and local governments statewide, these changes will also affect our opportunities to serve statewide. As I describe the management challenge we face, please keep in mind that Wisconsin currently invests $800 less GPR (General Purpose Revenue) in each student’s education than our peers nationally; the $51 million proposed reduction would amount to another reduction of $300 per student, leaving our institutions the challenge of providing a quality educational experience at considerably less per student than our peers. The students’ budget priorities for 2003-05 you will hear about later this afternoon will describe some of the concrete challenges we face in providing that quality education.

The Governor’s proposal cuts $10 million permanently from our current 2001-02 base budget, and an additional $30 million in 2002-03 for a total biennial base reduction of $51 million (about 4.5 percent). When netted against the $41 million for the Economic Stimulus Package included in the second year of the original budget, this leaves us $11 million for Economic Stimulus Package initiatives. In addition, the proposal would enable the Board of Regents to increase resident tuition a maximum of 10 percent (from the original 7 percent at the comprehensive universities and 9.1 percent at the doctoral institutions already built into the second year budget) to generate an additional $9 million; so, a maximum of $20 million-or about half of the original Economic Stimulus Package-could be funded in 2002-03.

In addition, the proposal increases state financial aid (WHEG) by 10 percent to parallel any tuition increase.

Let me remind you what was included in the Economic Stimulus Package. The university contributes to education in two main ways: through skilled graduates for the new economy and through research and new business spin-offs and partnerships. In the Economic Stimulus Package, we committed to educating nearly 2,600 more students in high-demand fields including computer science, biotechnology, bioinformatics, genetics, and microbiology and generating patents and spin-offs based on UW research. And we agreed to do this without reducing access for other categories of students. But to accomplish this, those high-demand programs must hire additional faculty, purchase lab equipment, and provide additional course sections. If it becomes final, the Governor’s proposal would enable us to invest in the additional faculty and equipment to accomplish half of the Economic Stimulus Package in 2002-03, deferring the remainder to 2003-05, while maintaining our EM21 enrollment targets.

As you may know, there are other budget proposals under debate, including one to freeze the second year budgets. This would nearly double the University’s cut to $92 million, eliminate the Economic Stimulus Package entirely, and force enrollment reductions as faculty and staff were cut to achieve savings of this magnitude. Tuition increases above 10 percent would be required to prevent these worst-case consequences.

The Governor’s proposal is very challenging, but it lets us continue to contribute more than just budget cuts to Wisconsin’s economic future.

Timing is an issue for us – the season of admissions decisions and hiring offers is now, but legislative action may take many months. I have discussed this at some length with the chancellors and they are prepared to make this commitment, even though final budget action may not be known for some time. This requires our institutions to take the risk of admitting 1,200 more students and hiring the required faculty now on the assumption that the UW’s cut will not exceed $51 million. Institutions will also need to stick strictly to their fall 2002 EM21 targets which total 133,630 FTE (full-time equivalency students) for the System. If we take this gamble and our final budget cut exceeds the Governor’s recommendation, we will have to consider cuts in staffing and enrollments for the second semester next year. Because the state badly needs our help to secure its long-term economic future, I recommend to you that we take this risk for the sake of Wisconsin, counting on the legislature to join us in this commitment to economic growth and not exceed the $51 million reduction.

Finally, I want to share with you some of the other tough choices we have made to cut staff and needed equipment from base budgets and change/streamline our operations. We are:

  • delaying the replacement of a number of non-instructional vacancies which will slow service in administrative areas (UW-Milwaukee, System Administration);
  • freezing the current replacement cycle for desktop computers (UW-Madison, UW-Green Bay, UW-Oshkosh);
  • eliminating funding reserved for smaller spring class sizes for freshmen and sophomores (UW-Madison);
  • reducing professional development funding that helps faculty and staff remain current in their fields (UW-Madison, UW-Eau Claire);
  • closing recruitments under way for full-time faculty and using part-time lecturers instead (UW-Parkside);
  • reducing/eliminating planned intersession courses (UW-Stout);
  • delaying staffing improvements in student financial aid processing (UW Colleges).

We might also consider:

  • slowing new program approvals and focusing on those that advance the economic development, international, and security needs of the state and nation;
  • adjusting the academic calendar to create a longer winter break to save energy costs;
  • seeking additional flexibilities to manage our own purchasing and telecommunications contracts;
  • . . . and other ways to streamline our operations within state government.

None of this is easy, and I would not want the University’s willingness to pitch in to be taken as a sign that these cuts require “no pain.” Our students will feel the inconvenience of larger classes and longer delays in some services; our faculty will have higher workloads and be unable to replace some retiring colleagues and research associates; parents, legislators, and members of the public will experience slower response times on replies to questions and requests for information; and our administrative costs-already the lowest in the nation-will shrink further.

As Governor McCallum said, the state must find new ways to function and the UW will do so as well. We ask our clients across the state for their patience and understanding as we work to balance quality, access, and outreach as a public university.

Media Contact

Erik Christianson UW System 608-262-5061