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Biennial Budget Analysis: Spotlight on UW

Comments | Posted in News | By MI President Brett Healy | Posted March 20, 2017 4:15 AM

**April 10, 2017: Update **
The Joint Finance Committee has scrapped all non-fiscal policy items from the Governor's budget proposal, including many items described in this piece. Read more about the latest move out of the budget committee here. In the below piece, any policy items with an asterisk beside them are now struck from the budget and may be introduced as separate bills.


Before the budget debate gets going, a look into the major provisions for the University of Wisconsin System

March 20, 2017

By Ola Lisowski
MacIver Institute Research Associate

[Madison, Wis...] In February, Gov. Scott Walker introduced his biennial budget for 2017-2019, officially launching this year's budget season. With the news that the Joint Finance Committee has finalized its dates for the forthcoming public hearings around the state, it's a good time to review what's in the queue for the University of Wisconsin System in this budget.

Overall, I summarize the goal for the System in one word: efficiency. As someone who hates the phrase "common sense" to describe policy, I found myself using it a lot in reviewing this portion of the budget. Many provisions had me shaking my head, asking, "this isn't already law? Crazy!"

Out of concern for you, the taxpayer, let's start with a basic overview of the scope and numbers of this proposal.

Total state spending (GPR): $2,191,070,500, a 3.65% increase
Total full time positions, all funds: 35,560.08, an increase of 159.22 positions
Total full time positions, general purpose revenue: 18,035.88
Total proposed spending, all funds: $12,431,997,800
Percent difference from the last budget: 1.94% funding increase
Portion of overall state spending: 6%

What's the Takeaway?
The Governor's budget grows the size of the University of Wisconsin System. Unlike prior budgets, Gov. Walker comes right out of the gate with $77 million moreUW Budget BytheNumbers.png in state funding compared to 2017. That's an increase of over 3 percent from last year, and to no one's surprise, it's been warmly welcomed by System officials.

The biggest string on that funding increase? Performance. The Governor's budget provides $42.5 million to be distributed to institutions that perform well on the following state priorities:

  • affordability and attainability (30%)
  • work readiness (15%)
  • student success in state workforce (30%)
  • efficiency (10%)
  • service (5%)
  • additional criteria specified by the Board of Regents and approved by the Secretary of the Department of Administration (10%)

By tying funding to performance, the Governor makes it clear that there's no such thing as a free lunch. Kudos. This $42.5 million is split evenly across the biennium and will be distributed based on the listed state priorities. The Board of Regents would have to rank each institution's performance based on five sets of criteria for each fiscal year and would weigh each criteria accordingly, with affordability, attainability, and student success in the state workforce ranked by the Governor's office as the most important criteria.
GPR UW System.png

Now that the overall numbers are out of the way, it's time to cover the most important UW-related provisions in this budget, starting with the one that has caused the most ruckus...

Frozen Tuition in Year One, Tuition Cut in Year Two
Gov. Scott Walker revealed his hope to cut resident undergraduate tuition at the UW System early this year during his State of the State Address to immediate outcry. Legislators on the left and the right immediately leapt at this provision, saying it would either drain the system's resources or be far too expensive for the state.

Under the Governor's proposal, resident undergraduates would enjoy a fifth year of the tuition freeze, setting the cost of a year of tuition at UW-Madison at $9,273. In the 2018-19 school year, tuition would be lowered by 5 percent, down to $8,809. The Governor's budget specifically allocates $35 million to the System to offset the lower amount of tuition dollars flowing in - just as System officials asked.

As a free marketer, I don't believe that a freeze is a sustainable long-term solution, but given the student debt crisis we're in now, it's the best option out there. Ever since the government began offering guaranteed loans for prospective students, the cost of higher education has skyrocketed. Rather than growing government at the latter end by creating new loan and grant programs, it's best to control costs to begin with and keep the cost of tuition from growing.

From the second Gov. Walker uttered the words "cut tuition" in his State of the State address, it was clear that some legislators wouldn't bite. It's a bit ironic that many legislators - who I will bet have boasted about the tuition freeze and how much money they've saved young Wisconsinites on nearly many pieces of lit that they've produced in the last four years - are balking at the cost.Tuition Freeze PullQuote.png

Under the proposed reforms, students who began as freshmen at UW-Madison in 2015 would save $12,105 for a degree compared to the pre-freeze trend. How do you go after a growing student debt crisis? Cut the cost of a four-year degree by a full fourth.

Pathways to Three-Year Degrees*
Under another proposal, the UW System would be charged with to creating pathways to three-year degrees for 10 percent of programs by 2018, and 60 percent of programs by 2020. The System will also have to report on the number of three-year graduates and the percentage of programs for which a three-year pathway exists in an annual accountability report.

This proposal doesn't add additional burdens on students or ask the System or universities to create completely new programs. Rather, universities will have an opportunity to examine bloated degree requirements while shedding light on meaningful options for students. If passed, this proposal would save students valuable dollars - the benefits of which need not be explained here.

For purposes of transparency, the additional reporting requirement is a nice touch. Now let's work on that full audit.

Credit Transferability
One new requirement would have the UW System and Wisconsin Technical College System Board (WTCSB) ensure that for each course of study, no fewer than 60 core general education credits are transferable within and between each system institution. The System will also be required to submit a report to the Legislature describing any barriers to credit transferability by 2018. Under current law, only 30 credits are fully transferable within and between institutions.

Perhaps more than any other provision on higher education in this budget, this one is a no-brainer. Wisconsin's set of universities and tech colleges exist to serve our residents and get them prepared for the future, and any provision that helps them get there and streamlines the bureaucracy between institutions should be a welcome one.

Wisconsin's state institutions should be as flexible as possible for our residents and students while maintaining the high quality of education that the public expects. In this vein, the institutions should strive to complement one another and to maximize the ways in which students can benefit from them and complete their degrees. It's tough to tell how many students, exactly, will benefit from this provision, but the number is undoubtedly not zero. Besides, this should have been the rule from the beginning.

By requiring that a substantial number of credits transfer between each institution, each school's bureaucracy steps out of the way - just the slightest bit - in the favor of students.

Report Cards*
Similar to report cards for K-12 schools, each System institution will be required to publish single-page report cards beginning in 2018. The report cards will summarize each institution's performance during the prior year, based on the performance funding criteria and with metrics determined by the Board of Regents.

Any provision that increases transparency for the public is a good thing. Let parents and students have easier comparisons for and between each state institute. Another no-brainer.

Academic Freedom
The Governor's budget allocates $10,000 for the UW System to review and revise policies related to academic freedom. The Board of Regents will be charged with producing new language that codifies its commitment to students' right to free speech.

In an age of "free speech zones" on campuses - where every inch should be considered a free speech zone, not just a small corner - this provision is relevant and timely, as we've written here before. After all, college is a time for young people to open their eyes to new experiences and perspectives. No, it's not always comfortable. It's not supposed to be.

It's important to note that the UW Board of Regents already adopted written free speech principles known as the Chicago Principles in 2015, and reaffirmed them in 2016. However, such commitments to free speech haven't played out.

In November, protestors physically blocked conservative pundit Ben Shapiro from speaking on UW-Madison's campus. Shapiro eventually spoke, but protesters shouted down him and his supporters, including Vicki McKenna, who was repeatedly shoved and harassed but nevertheless kept filming.

The continual sifting and winnowing of ideas in the pursuit of truth can only occur if dissent in speech is continually protected. On, Wisconsin, indeed.

AcademicFreedom Pull Quote.pngFreedom of Expression
In a similar vein to the academic freedom provision, the Board of Regents and each institution and UW College campus is charged with committing to free and open inquiry for the UW community as a whole. This provision for the UW System specifies that all members of the UW community share the responsibility to maintain a climate of mutual respect, and that concerns about civility can not be used as a justification for closing off the free and open discussion of ideas.*

This provision goes on to specify that while the UW's commitment to free speech and debate is crucial to its mission, the Board and institutions may restrict any expression that breaks the law, falsely defames a specific individual, constitutes a genuine threat or harassment, or that unjustifiably and substantially invades privacy. The Board and each institution are expressly given permission to "reasonably regulate" such speech as long as the fundamental commitment to the principle of discussion of ideas is not harmed. The bill language specifically writes that UW community members may not obstruct or interfere with the freedom of others to express their views on campus, even while they may reject or loathe such views. Rather, they are free to criticize and contest views with which they disagree, and the Board and each institution is charged with protecting the freedom of debate and deliberation.

I'll be curious to see what such "reasonable regulation" actually looks like, but I maintain heartened by the fact that this provision, and the one before it, make clear the System's commitment to free speech.

Faculty Workloads*
The System will be charged with creating a new system to monitor faculty and adjunct workloads, and rewarding those who teach more than the standard workload. By 2018, the System will have to devise policies for faculty members to regularly report their teaching hours on an accountability dashboard.

As a proud alumna of UW-Madison, I value my alma mater's reputation as a research institution. I also valued my professors having time to help me understand their classes and more than anything, I valued those classes that were engaging, thought-out, and comprehensive.

Ask any student if they can tell which professors showed up to class unprepared. They'll be honest with you. By tracking and reporting faculty workloads, professors will have the ability to be honest, too.

Opting Out of Seg Fees*
One provision would allow students to opt out of allocable segregated fees (known as seg fees) starting in the 2018-19 school year. Students would be able to decide whether or not they want to fund student organizations such as Sex Out Loud, the Tenant Resource Center, and Associated Students of Madison (ASM) bus passes.

One essential distinction - which is described in detail by ASM here - is that between allocable and non-allocable fees. This provision would not affect the non-allocable fees, which remain 83 percent of overall seg fees. Non-allocable fees fund things such as University Health Services, Recreational Sports, the Union, as well as all debt services and ongoing payments for building projects.

I'd be curious to see a breakdown of how many students would actually opt out of paying seg fees. My gut instinct tells me the majority of students would continue paying the fee because they enjoy the presence of such services on campus. But if they don't? That's their prerogative, and that's the way it should be.

Increased Flexible Options
The budget proposal requires the Board of Regents to expand the number of degrees offered through the UW Flexible Option program by at least 50 percent by December of 2019. At least one of the new programs created must be geared towards helping certified nursing assistants in becoming registered nurses, and another must help prepare nonteacher school district employees successfully complete standardized exams as a condition of becoming certified teachers. The proposal also offers $700,000 in financial aid for students who are enrolled in programs through the UW Flexible Option platform.

Currently, the Flex Option offers five degree programs and three certificates. The program is "made for busy adults" and catered towards individuals who want to get their degrees but who may already be working full time, supporting a family, or otherwise unable to attend traditional college courses.

Only UW-Milwaukee, UW-Parkside, and UW Colleges offer the Flex Option.

Wisconsin Tech College System
It's not just the UW System - WTCS is also affected by the Governor's budget. The biggest provision is one which would freeze tech college tuition for two years, providing $5 million to offset lost program revenues. According to the Governor's office, revenue per full-time enrollee at tech colleges has risen over 20 percent over the last five years and is at its highest level ever. Clearly, the system won't be bled dry by letting students save more of their hard-earned dollars.

Local tech college districts will be allowed the flexibility to drop tuition lower* than the statewide frozen amount. I won't hold my breath and wait for any districts to jump at the opportunity to make less tuition money, but it's nice that they'll be allowed the option.

WTCS will also be required to submit an annual accountability report* to the Governor and Legislature, just as the UW System already does. Such transparency is necessary and welcome.

Required Work Experience*
I've written on this issue here, leaning heavily on my experience as a young graduate who has never had to be told that getting a job is important. Maybe that's just me, though. ¯\_(ツ)_/¯

Other Odds and Ends
I could wax poetic on all the provisions in this budget for thousands of words, but in the interest of keeping my readers awake, I'll go through the last of the provisions here:

  • $11.6 million for a general wage adjustment for UW employees. This will fund both the expected inflation increases in fringe benefit costs as well as two 2 percent bumps in general wages, slated for September 2018 and again in May 2019.
  • $168 million in additional program revenue and 159.22 additional positions to reflect increases in tuition revenues and positions funded by that revenue.
  • $200,000 for the System's rural physician residency assistance program, spread evenly across the biennium.
  • Tuition fee remission for the children and spouses of deceased or disabled veterans: this provision expands tuition fee remission to the children and spouses of veterans who lived in the state prior to serving, rather than just those individuals who lived in the state after service.
  • *Student Housing Leases: the Board of Regents would be responsible for all student housing leases, rather than exempting the Board's lease authority for leases of real property as student housing, as is current law.

That's about it, folks. In your opinion, what's the most important provision related to higher education in this budget? As always, follow us at @MacIverWisc to stay up-to-date on all the latest state budget issues.

* indicates that the item has been removed from the budget, as of April 10, 2017.