Initial Reaction To Budget Is Optimistic

UW–Madison officials are still sifting and winnowing through Gov. Tommy Thompson’s 2,100-page budget for 1997-99, but their initial reaction is:

Better than last time.

“Given the demands on state tax resources, the Governor’s budget has treated the university comparatively well,” says John Torphy, vice chancellor for administration. “But that doesn’t obscure the disappointment that important investments weren’t made and desirable flexibilities not granted.”

Thompson’s proposed $36.3 billion budget over the next two years includes $20 million in new state money for the UW System. That’s good news compared to the $33 million cut state universities endured in the two-year budget cycle that ends June 30.

The only new initiative recommended by the governor is a $15.6 million investment in instructional technology and distance education. The budget also gives the university system some increased flexibility and control over certain funding and staffing issues.

But several other proposals sought by the UW — new money for libraries as part of the technology investments; increased funding for student advising; and flexibilities requested for position control and revenue bonding — were not included in the governor’s budget, Torphy says.

As is always the case, the budget does not include recommendations for specific pay increases for faculty and academic staff (see related story).

Torphy and Eric Borgerding, special assistant to the chancellor for state relations, are among the many UW–Madison and UW System officials analyzing the governor’s budget. UW–Madison comprises about 53 percent of the UW System’s proposed $5.2 billion budget.

“So far so good,” says Borgerding. “But there are bound to be things in the budget pertaining to UW not mentioned in the governor’s speech that we are not yet aware of.”

Thompson presented his budget to the Legislature Feb. 12, saying the spending document “brightens the shining star of our education system — the University of Wisconsin System.”

“The recent Kiplinger Magazine report that ranked the UW–Madison the third-best value in the nation simply stated what we already know,” added the Republican governor. “This budget makes sure the UW System remains a remarkable value for the dollar.”

During his budget address, Thompson said he is proposing a two percent cut for most state agencies, except the UW System and the Department of Corrections. Nevertheless, the governor is recommending a ten percent reduction — or what he calls a “budget efficiency measure” — for UW-Extension totaling $5 million over the biennium. He says Extension’s reductions should come from Continuing Education, Extension Communications, and general educational administration and services. Torphy says UW–Madison will have to absorb a portion of the cut, although the amount is yet to be determined.

UW System officials say the impact of this proposed reduction could be lessened by Thompson’s recommendation to grant Extension the ability to raise and spend credit outreach revenue as it sees fit.

In terms of management flexibility, Thompson has proposed giving the Board of Regents the authority to raise and spend tuition above what the Legislature approves (see related story); expanding Regents’ authority to set yearly salaries for faculty and academic staff; giving campuses the ability to spend unanticipated surplus auxiliary revenue for student-related activities; and providing more flexibility in recruiting and promoting of non-professional classified staff.

At the same time, the governor also recommends that starting salaries of vice presidents, chancellors and vice chancellors — and salary adjustments for these positions above the state pay plan — must be approved by the Department of Administration.

In terms of technology, Thompson is proposing to beef up instructional technology and distance education with $9.4 million in state funds and $6.2 million from tuition. Along with that $15.6 million, UW System President Katharine Lyall says another $12 million will be reallocated from current UW funding over the biennium for technology to bring the total increase to more than $27 million.

The technology initiatives include expanding distance education and classroom technology; supporting the increased use of technology by faculty in their teaching; boosting training of K-12 teachers to utilize technology in their classrooms; and providing increased online access to the UW through the Student Information System. While UW officials have praised the additional technology funding, it is only 40 percent of the requested amount.

Financial aid is pegged to increase 5 percent over the next two years: 2 percent in 1997-98 and another 3 percent in 1998-99. But when compared to the last budget cycle, when there was no increase, this proposal means financial aid will have increased just 5 percent in the last four years.

When funding for the continuing costs and decisions made by the last Legislature and compensation questions are both factored out of the equation, the UW System will receive only about $3 million in new state tax money by 1998-99.

Compared to the total amount of $860 million in state tax revenue coming to the UW System in each of the next two years, the $3 million increase “means we held our own,” Torphy says.

From 1978-79 to 1995-96, state support for UW–Madison as a percentage of the university’s budget has dropped from 37.5 percent to 23.3 percent. Figures for 1996-97 are skewed by the privatization of the UW Hospital and Clinics. Increasingly, the university has had to rely on tuition and fees, federal funding and gifts to fund its operation.

While there was much hoopla surrounding the governor’s budget address, Borgerding emphasizes the budget process is just beginning at the Legislature. Now that the budget bill has been introduced, it will move next to the Joint Finance Committee for approval sometime in May. From there the legislation must work its way through both the Assembly and Senate before being sent back to Thompson for his signature and most likely some vetoes. When approved by legislators, the bill will look different than it does now, although Thompson possesses perhaps the broadest gubernatorial veto powers in the nation and can strike out provisions he doesn’t support.

“With control of the Legislature split, you can bet there will be changes during this process,” Borgerding says. Republicans control the Assembly, while Democrats have the majority in the Senate.

The political reality of Wisconsin politics over the last decade is that the state has chosen to make its largest investments in property tax relief, prisons and Medical Assistance – and not higher education, Torphy says.

“That’s the unfortunate reality for education in Wisconsin,” he says, “but it’s the reality nonetheless.”