UW budget merely disastrous for 2016-17, more difficulties likely ahead

A few reactions to the finally-released UW budget, which was approved by the Board of Regents yesterday.

First of all, I didn't see anything that was worth hiding from the public, unless the GOP hacks on the Board of Regents didn't want to see Gov Walker's claim of a "tuition freeze" for in-state undergraduates get blown up by this reality.

For students at a four-year institution, the average increase for 2016-17 is 1.1% for tuition and segregated fees and 1.7% for room and board.

That comes out to an average increase around $90 for tuition and fees and $117 for room and board, not really the end of the world when you figure that's still lower than what inflation is likely to be over the next year. But the problem is that it's a direct result of state support continuing to fall, and other parts of the UW funding stream being forced to make up the difference. UW-Madison professor Dave Vanness is the president of the campus's chapter of the American Association of University Professionals (AAUP), and he tweeted out the following graph to show not only how state funding has failed to keep up for inflation over the last 20 years, but also hasn't been adjusted enough to account for higher enrollments.

This cannot continue if we care about #UWQuality. It's time to #fundthefreeze. #UWBudget pic.twitter.com/aQUTHp1EMy

— Dave Vanness (@djvanness) June 9, 2016

And that chart also shows state funding isn't going to be any more available on July 1 than it was for 2015-16. The UW budget document notes this, and while their base amount may be higher for a starting point in the 2017-19, there is an accounting trick in this fiscal year that keeps funding down at last year's lower levels.

The biennial budget includes the return of $25 million of the $125 million budget cut that was in place in 2015-16. However, the state budget requires the UW System to lapse the same amount back to the state, which will effectively have no impact on the institutional budgets of the Colleges, universities, and UW-Extension during this year. The budget reflects the higher GPR amount as a change to ongoing funding, but operating budgets have been decreased to reflect the fact that there are no expected expenditures on these funds.

There also was a provision to add $5.46 million into next year's budget to help pay for higher benefit and salary costs, but that was counteracted by $11.4 million in savings due to lower debt costs, which got kicked back to the state's General Fund. The result- the UW will be getting $5.95 million less from the state than it did this year. Ugh.

Interestingly, UW System President Ray Cross must be feeling the heat from several campuses passing resolutions of no confidence, because he went out of his way to say that this budget is the lowest amount of state funding for the UW System since the System was created in the early 1970s. Cross also noted that reserve monies are also being bled dry at the UW to try to fill in the gaps due to the reduced funding from the state, and the budget document bears this out.

... UW System plans to decrease unrestricted funds balances by $160.2 million (20.5%), from $782.6 million in 2015-16 to $622.4 million in 2016-17. The greatest change is expected in the GPR/Tuition balance, which is estimated to decrease 30.8% from $287.8 million to $180.2 million. This is down $371.3 million from the high level of $551.5 million in 2012-13 (a 67% decrease).

That 622.4 million is a reserve amount of less than 10% of the total UW bud1get. With that in mind, riddle me this, all you GOPpers who spout "The UW should be run like a business!" Name me a business that would run that close to the edge, where they barely have enough money left over to pay for a month's worth of expenses? This is especially tricky for the university system, given that most tuition isn't paid for Fall semester until 2 months into the Fiscal Year, so one of your main revenue sources isn't even available.

And now that reserves are empty, and the state seems likely to face another Walker-caused budget deficit in the next fiscal year, where is the money going to come from to take care of the needs that will have to be met in the 2017-19 budget? The obvious answer is through higher tuition, which was the unspoken part about Walker's plan to spin off the UW System into a private authority,

The governor also proposes creating a University of Wisconsin System Authority and giving the System greater flexibility to manage tuition, building projects, human resources, compensation and procurement. The new public authority would be created on July 1, 2016, and tuition authority would be granted beginning in the 2017-18 school year.

That plan was defeated during deliberations for the 2015-17 budget, but keep this segment of UW-Madison's rundown of the Authority plan in mind, because huge tuition increases for in-state students seem to be on the table for next year (yet another reason I think Walker is trying to high-tail it out of here ASAP).

So while the Walker-stacked Board of Regents may have acted in an overly secretive and suspicious manner in relation to the UW budget, there were no radical restructurings for next year, as some of us feared. But what we have left is a university system that has been badly damaged in functionality and competitiveness for the future, and if the Legislature is not changed in these November elections, these ALEC slimeballs will likely be back to deform the UW System for good next time. So keep that from happening, will ya?