Monday, June 17, 2013

Have you forgotten? UW budget cuts

One of the budget items that seems to have fallen by the wayside in our ADD media world is the continued trend in Wisconsin of taking taxpayer dollars out of the UW System. You may recall the "controversy" about the allegedly large UW surplus of Program Revenue funds (i.e. funds not paid for with tax dollars, but through self-funding methods like tuition and student fees, student union proceeds, and parking fees). I called out the GOP's complaints for the bullshit it was at the time, as it was budget cuts that many Republicans backed from 2002 through 2012 that led the UW System to be more aggressive in relying on tuition and other sources of revenue.

Now that the Joint Finance Commission decided to punish the UW System by pulling all of Governor Walker's proposed taxpayer-supported increase, and imposing a tuition freeze for the next 2 years, let's take a look at the LFB summary and identify where we currently stand with UW funding.

The bottom line is that again, taxpayers are slated to pay about $2.5 million less into the UW System than they would if they held funding at the 2012-2013 levels, but they allow the UW System to spend an additional $210 million over the next 2 years. So how does the JFC think the UW System should make up the $212.5 million difference? By spending down the "excess" Program Revenues that they complained about beforehand, which is a double-hit for that fund, since the System can't use tuition as the way to come up with that extra $212.5 million.

As a result, the System reports that they are looking at a $61 million structural deficit within the next 3 years as a result of these moves. Now, you can choose to be skeptical of the System's claim, based on prior claims of going broke, but you certainly can see why they might be low on funds if they can't get them from the state and you can't get them from students through tuition.

If you track the funding of the UW System once the major cuts began in 2002, you can see how the tuition freeze departs from prior policy. While sometimes the cuts in state funding were offset in later years, like when the 2008 spending per full-time UW student got back to 2002 levels (while still losing ground vs. inflation), there also is a clear correlation between lower state funding and higher tuition.

Here's another way of looking at it. In 2002, there was more than twice as much general taxpayer spending per full-time student than a student had to pay in tuition to UW-Madison. That number had dropped to 1-to-1 by 2008, and now student tuition is higher than state spending by a factor of 4-to-3.

This is what made the complaints of Legislative GOPs to the UW officials about the alleged surplus ring so hollow to me, because they were taking themselves off the hook for agreeing to the budget cuts that inevitably has led to the "cut-raise tuition-cut more- raise tuition more" cycle that the System has been under for the last decade. As the charts show, one goes with the other, so if the GOPs wanted to keep UW tuition low, they should have been working to try to fund the schools over the last 10 years.

Oh but "they're just trying to be accountable to tax dollars", you say. Ok, let's check to see if they're also cutting state funding and tax credits for the horribly unaccountable WEDC, an organization that 60% of Wisconsinites said they had little or no confidence in, according to a recent UWM poll. And if you take out GOP bubble-worlders, that figure was closer to 75% that had little or no confidence.

A quick check of the WEDC budget summary shows that indeed WEDC is slated to receive $30.3 million less in the next 2 years. But then you read this part, and realize they're not getting cut at all.
Transfer $35,274,700 GPR and $20,276,000 SEG in 2014-15 from WEDC to the Joint Committee on Finance's GPR and SEG supplemental appropriations. WEDC would be required submit a report to the Joint Committee on Finance that includes information indicating that the Corporation is complying with the recommendations of the LAB included in the May, 2013, audit of WEDC, and the chief executive officer of WEDC would have to appear before the Committee at the second quarterly meeting in fiscal year 2013-14 under s. 13.10 of the statutes (December, 2013). The Committee would be authorized to release the funding based on the CEO's testimony, and the information included in the report if it finds WEDC is complying with the audit recommendations.
So if the WEDC officials claim they're going along with the LAB recommendations, they could get their $35.4 million back. And given that 12 of the 16 Joint Finance members are Republicans who love the idea of unaccountable entities handing out tax breaks to their buddies, they won't ask too many tough questions, and they'll probably go along with giving them the money. This means that $30.3 million GPR cut to WEDC now becomes a $5.1 million GAIN.

That contingency fund really illustrates the double-standard GOP leggies have had between the UW System and WEDC. The GOPs in the JFC could well have told the UW System to report on their PR balances, and only release additional GPR funding to the UW if the System was proving they were paying down the alleged surplus - a similar tact to what they took with WEDC. But instead the GOPs cut out the GPR funding from the UW System, and used the "savings" to help pay for their Koo-Koo tax cuts that will blow a hole in the budget within 2 years.

Let's not forget that budgets are indeed moral documents, and what is valued and what is not shows in what ultimately gets passed. For the GOP members of the Finance Committee, those priorities are clearly giveaways to the rich and corporate like WEDC and rich-favoring tax cuts. By comparison, the great resources and talent-generator that is the UW System is thrown to the wayside in favor of these failing policies. Keep it in mind going forward, and do not forget as November 2014 approaches.

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