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UW-Madison begins planning for pending budget cuts

February 27, 2006

The university is beginning to address how it would handle what would be the largest budget cut in university history, proposed by Gov. Jim Doyle to lawmakers Feb. 18.

"The $250 million budget cut for the UW System proposed by Gov. Doyle is obviously enormous," says Chancellor John Wiley. "It is the single largest cut to any state agency and, if approved by the Legislature, it will be the largest budget reduction ever taken by the university system."

The cut is proposed over the two years of the 2003-05 biennium, which begins July 1. The governor is proposing to cut the UW System budget by $110 million in the first year, followed by a $140 million cut in the second. He also proposes reducing the number of taxpayer-funded, full-time positions within the UW System by 650.

To soften the blow, the governor's proposal allows the UW System Board of Regents to increase resident undergraduate tuition by no more than $350 each semester at UW–Madison and UW-Milwaukee and up to $250 at all other UW System campuses.

The new tuition limits could offset budget cuts by $50 million in 2003-04 and $100 million in 2004-05. However, the additional revenue would still leave the UW System with a net $100 million budget cut.

It has not been determined how much of this cut would come from UW–Madison. Traditionally, UW–Madison receives about 40 percent of system-wide cuts. It is also unclear how many jobs UW–Madison would be asked to reduce under the plan.

"We must do what we can to take care of our students and employees during this process," Wiley says. "I have asked deans and other leaders to develop plans for how they would make cuts in their areas. I have made it clear that everything is on the table, including cuts to programs and services. Proposals to cut programs and services directly affecting students and job cuts to employees should be a last resort. To the extent that program cutbacks result in potential layoffs, every effort will be made to place existing employees in alternative positions."

Aside from the governor's proposal, UW–Madison sustained a $17 million cut to its 2001-03 biennial budget when a budget adjustment bill was signed into law last year. An additional $8.3 million will be cut from UW System's budget for the current fiscal year under a second budget adjustment bill passed by the legislature Feb. 20. If the governor signs the bill as anticipated, UW–Madison can expect to absorb about $3.2 million of that cut. Wiley says it will be difficult to find ways to absorb all three cuts.

"Although less than 3 percent of our budget currently supports administrative activities, we will continue to look for ways to become even more efficient," Wiley says. "However, the size of this budget cut, on top of the $20 million in cuts this campus will have taken during the 2001-03 biennium, means that we will be forced to eliminate some academic programs and services."

Even though higher tuition would place a bigger burden on students, the proposed increases would not make UW–Madison any more expensive than its Midwest peers, and that burden could be lessened through increased financial aid.

"The university system simply cannot absorb a quarter-billion-dollar reduction in its budget without severely impacting the quality of the education we provide and the number of students we are able to educate," Wiley says. "While no one likes to increase tuition, we have to recognize that our resident undergraduate tuition is well below the midpoint of our peer institutions in the Big Ten."

Currently, the University of Iowa is the only Big Ten school with lower resident undergraduate tuition than UW–Madison. If a $350 tuition increase were approved each semester next year, UW–Madison's resident tuition still would remain the second lowest — even if no other Big Ten schools increased their tuition.

"While our tuition remains reasonable even under the governor's proposal, it is also essential that financial aid increase sufficiently to offset the tuition increase for qualified students. It is essential that no Wisconsin resident be denied an opportunity to attend a UW campus simply because of cost," Wiley says.

The governor has proposed increasing funding for three state financial aid programs by $23.6 million to help those students least able to pay. The programs include:

  • Wisconsin Higher Education Grant, which would receive increases of $5.4 million in 2003-04 and $13.1 million in 2004-05. The governor also proposes removing the $1,800-per-student maximum on WHEG grants.
  • Lawton Minority Undergraduates Grant, which would receive increases of $761,500 in 2003-04 and $1.8 million in 2004-05.
  • Advanced Opportunity Program, which would receive increases of $825,000 in 2003-04 and $1.7 million in 2004-05.

Tuition at public Big Ten universities
Faced with declining tax revenue due to a down economy, many public universities are contemplating tuition increases. Gov. Doyle's plan would buffer the impact of tuition increases here with additional student financial aid.

Penn State  $8,585
University of Michigan  7,960
University of Illinois  6,704*
Michigan State University  6,412
University of Minnesota  6,286
Ohio State University  5,691*
Purdue University  5,580*
Indiana University  5,315
UW-Madison  4,423
University of Iowa  4,191

*Illinois, Ohio State and Purdue charge incoming students more than returning students. Using those schools' returning student tuition would not change UW–Madison's ranking.