Deep Cuts in Wisconsin

Governor Scott Walker wants to remove $300 million from university system, and offers campuses more autonomy in return. But higher ed leaders say the trade isn't nearly enough to offset the cuts.

January 28, 2015
Dusk falls near U. of Wisconsin and the state Capitol in Madison.

Wisconsin universities now face the largest budget cuts in their history, even as colleges in other states crawl out of budget holes.

Governor Scott Walker, a possible Republican candidate for president, announced Tuesday a $300 million cut to the 26-campus University of Wisconsin System. The planned cuts will come as a pair of $150 million cuts in each of the next two years.

In exchange for taking away so much money, 13 percent of the higher ed budget, Walker said he wants to give state university officials more independence from state lawmakers.

Wisconsin administrators would likely use their new power to raise prices on students, if only after a two-year tuition freeze expires. Wisconsin universities with name recognition outside of the state will perhaps also seek out more higher-paying students from other states -- and raise prices on them, too.

“The people of Wisconsin deserve a government that is more effective, more efficient and more accountable,” Walker said in a statement announcing his higher education budget, “and this plan protects the taxpayers and allows for a stronger UW System in the future.”

Under Walker’s plan, universities would have say over more of their operations, not just tuition.

Under Walker’s plan, tenure and faculty governance would be stricken from state code, although faculty leaders expect the Board of Regents to adopt similar or identical policies, resulting in few real changes. Usually, those tenure and shared-governance policies -- which faculty consider crucial protections -- are written into university regulations. In Wisconsin, they are enshrined in state code.

Universities could avoid cumbersome state purchasing requirements and give campuses more say over construction projects. Universities could set salaries and award employees with merit pay, which currently isn’t possible under state law.

The new revenue or cost savings the universities get because they have more authority is unlikely to match the cuts they face.

“The budget story in the short run is very little affected by that, because over the next two years I cannot get any budget gains,” said Rebecca Blank, chancellor of University of Wisconsin-Madison, the state’s flagship.

Walker's move echoes a deal he privately struck four years ago with former Madison chancellor Carolyn (Biddy) Martin to give the campus independence from the system. The effort blindsided the system's regents, who had been making an effort to win flexibility for all the colleges and universities in the system. The proposal died, but left unresolved underlying issues in the system. Walker's new proposal, unlike that one, gives everyone more autonomy. 

Under Walker’s new proposal, Madison is set to lose $60 million a year in each of the next two years. The university had also been using $23 million a year in reserve funds that are drying up and that the state will not repay, so the total hit will effectively be $166 million over the next two years. Madison has an operating budget ofabout a $3 billion a year. About a third of that comes from research funding and about 17 percent from the state.

In the meantime, Walker’s plan is likely to freeze tuition for in-state students for the next two years. In-state tuition in the state has been frozen for the past two years.

Blank said the cuts are the largest the system has ever faced.

Bernie Patterson, the chancellor of University of Wisconsin-Stevens Point, said the cuts were historic for his campus, too.

“Horrendous,” he called the cuts. He said he will almost certainly be forced to lay off people.

Patterson and other top officials at Stevens Point spent four hours meeting on Tuesday. He expects 19 other meetings, including some for the public, over the next several weeks. “What is really at the core of what we do?” he said. “What we can we stop doing so that we can continue to do that core mission?”

If tenure and shared governance indeed passes from a policy in state code to something controlled by the Board of Regents, campus administrators and faculty said they believe both key practices will be preserved.

Faculty are not worried that tenure will be eliminated, said Grant Petty, the head of PROFS, a Madison-based group that lobbies on behalf of faculty. Still, it means something to have tenure in state code.

“I think psychologically it will be a blow to lose that, however, we’ve already seen that statutes can be changed without any warning,” said Petty, who is also a climate scientist and member of the Madison Faculty Senate’s executive committee.

Walker has clashed with unions and backed a plan that made it harder for public employees to bargain.

Petty, who just put two daughters through college, is among the faculty and staff who worry the new flexibility will result in higher prices for students.

“I think that what we would like to see is a commitment from the state that is large enough that it makes tuition very affordable for in-state students,” he said. “We already moved very far away from that idea.”

After Texas lawmakers allowed state colleges to set their own tuition prices, prices went up, and Hispanic students may have been kept away from the state’s research universities, according to one recent study.

Kevin Stange, a University of Michigan public policy professor who is doing a deeper look at deregulation in Texas, said even though prices went up more at Texas institutions, the state did make sure that colleges set aside new money for need-based aid.

“I think that’s going to be a critical piece in Wisconsin, whether or not we see that sort of string attached to this independence,” Stange said.

Ray Cross, president of the University of Wisconsin System, made it clear tuition increases were in the cards because new flexibility for his office means that universities can now “manage pricing in a way that reflects the market and actual costs.”

State Senator Stephen Nass, a Republican on the higher education committee, predicted giant tuition increases, the Associated Press reported.

"I don't trust the unelected Board of Regents to prioritize the plight of middle-class families," Nass told the wire service. Cross replied that it was not in anyone’s interest to “simply jack up” tuition.

Blank, the chancellor at Madison, said the university would eventually look to raise tuition on out-of-state students and to enroll more out-of-state students in the near future. The university can only raise prices so much, though.

Right now, the state caps the percentage of out-of-state students Madison enrolls at 27.5 percent -- the university is just under that cap. After the steep cuts, Blank said, the university would have to look at admitting more out-of-state students -- which it could do because the caps might be gone if Walker's plan gives universities more independence.

Other universities are going to be less able to cope by turning to out-of-state students. Across the state, about 12 percent of University of Wisconsin students are from other states -- not counting Minnesota, which has a agreement with Wisconsin that effectively makes Minnesota students count as in-state Wisconsin students -- and the 13 two-year colleges in the system enroll only about 3 percent of their students from out of state.

Stevens Point enrolls about 12 percent of its students from other states.

Patterson said that while the university would certainly like to increase out-of-state enrollment, it does not take an out-of-state student if it can admit one from Wisconsin who is qualified.

Lara Couturier, who has written about state control and is now the director of postsecondary state policy at Jobs for the Future, said Wisconsin’s plan is troubling.

“The idea that the universities get in exchange the ability to increase tuition as much as they want: we have seen such a huge increase in tuition, we know it is having an impact on college affordability,” she said, “so loosening the reins for colleges to keep increasing tuition is something we really need to consider.”


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