UW is getting hammered by COVID-19. But the real damage might be next year

We got more of an idea about what might happen to the UW System as the effects of COVID-19 and the related recession sink in. The UW is especially susceptible to problems not only because all state funds are going to be tight going forward, but because COVID-19 and its related shutdowns have caused its other revenue streams to dry up, and now it may lead to crippling cutbacks.

UW System officials gave its Board of Regents and the public an idea about how far in the hole they are for this school year, in a presentation this week. And it is worse than we thought.

Estimates from the University of Wisconsin System Administration Office show the state's 13 universities and branch campuses are expecting more than $212 million in losses related to the COVID-19 pandemic through the summer semester. The numbers were described as "catastrophic" during a Thursday meeting of the UW Board of Regents.

Losses stem from housing and dining service refunds, lost revenues from canceled sporting events, unexpected costs to accommodate students taking classes online and a 5 percent budget reduction ordered by Gov. Tony Evers.

A presentation by Sean Nelson, UW System vice president of finance, showed UW-Madison is estimated to shoulder more than $117 million in losses, or more than half of the system-wide total. UW-Milwaukee is expected to take a more than $20 million hit, followed by UW-Eau Claire, which is expected to lose more than $10 million. Among all campuses, UW-Superior is expected to lose the least at just more than $2 million.

And you can see much of that is due to self-supporting entities on campus aren't bringing in money with students sent home from the dorms and conferences and public gatherings shut down due to the coronavirus.

Likewise, because the UW isn't doing as much while other parts of state government have more needs (such as DWD dealing with record unemployment claims and Health Services having to track and trace COVID-19 cases), they're taking roughly 65% of Governor Evers' $70 million in state-funded reductions over the next 2 months.

The Madison campus has already imposed a number of cutbacks, including furloughs and a 15% pay cut for top administration. And that extends to Badger sports, as we found out this weekend.

The University of Wisconsin athletic department is looking to save $2.8 million during the COVID-19 pandemic through voluntary pay cuts or a reduction in work hours.

The plan, announced Saturday, includes asking the department's 25 highest-earning employees to take a 15% reduction in pay over the next six months. That group includes athletic director Barry Alvarez, football coach Paul Chryst and men's basketball coach Greg Gard.

UW is seeking approval for around 350 other employees to participate in the Wisconsin Department of Workforce Development's Work-Share program. Under the plan, they'll have their hours reduced by either 20% or 50%, and they can apply for unemployment benefits.

The Work-Share program for athletics employees is scheduled to run from May 18 through July 25.

Yes, even you Barry.

The UW is slated to get some help from the recent CARES Act, although much of that money is to cover finances for students. But unfortunately, the UW cannot get some of these refunds covered, and the ironic part is that it's because the UW acted quickly once COVID broke out.

The student aid portion of the funds includes emergency grants for students, items to improve the educational experience at the universities like laptops to loan to students and refunds for room and board.

However, the CARES Act does not allow universities to pay themselves back for refunds issued to students before the CARES Act was passed using the student aid portion of the funds. This is an issue because most UW System schools have already issued refunds for room and board and most have already purchased additional IT equipment to transition to remote learning.

Outgoing UW President Ray Cross isn't going to let this fiscal crisis go to waste, as this may prompt a systemwide bloodletting of many programs.

...UW System President Ray Cross discussed a major restructuring proposal to regents that he said would ensure the survival of the system and its campuses beyond the COVID-19 pandemic.

Cross' plan calls for "streamlining" duplicate major degree programs across the state's campuses and moving human resources, IT and other administrative functions to the UW System Shared Services, which is operated by UW System Administration.

During an interview with reporters Wednesday, Cross said the consolidations would mean inevitable layoffs. Cross hasn't offered specific savings that could be realized from changes he's calling for, but he said not acting immediately isn't a viable option.

"If we're not able to make some quick adjustments a year from now, we will be considering changes that are quite different," said Cross. "I submit that the kinds of expenses facing several of our institutions will force them into the equivalent of bankruptcy, which is referred to in higher education as fiscal exigency. And I don't think that any of us want that. So if we take (those) measures, I think we can avoid that kind of thing."

So it's another version of "efficiency", much like when Cross turned the 2-year UW Colleges into smaller satellites of nearby 4-year campuses. That's resulted in significant declines in enrollment at the Colleges, rendering them near extinction.

And given the major uncertainties as to how many people might come back to campus next Fall, and where they might (or might not) live, you can see where the UW System is in significant peril. Which is why it's especially bad that Scott Walker and the rest of the ALEC/GOPs at the Capitol have not only reduced state funding to the UW, but refused to allow them to make up the difference in tuition, as that has been frozen for several years.

Now, there is less money coming in (especially if enrollments decline a lot next year), and reserves have been depleted to absurdly low levels due to a faux-trage GOPs pulled in 2013, leading the UW to spend down those reserves over the years instead of getting and using new moneys.

So looking ahead, the campuses are going to be in fiscal danger, and Ray Cross and the rest of the Walker-appointed Regents are likely to use the situation to "re-imagine" the UW System, which likely means that they will remove certain majors that certain GOP/corporate interests don't find useful (aka - the ones involving thinking and an understanding of a society beyond spreadsheets).

In other words, mission accomplished!

The only way this doesn't happen is if UW survives the 2020-21 year somewhat intact, and then we get legislators that support the UW like 3-time Badger grad Tony Evers would prefer to. If that doesn't happen, then the regional, multi-campus, multi-disciplinary UW System that we've recognized it to be will be gone forever.