The alleged billion-dollar surplus found in the University of Wisconsin System’s budget last week could mean a tuition freeze and a loss in state support to the UW System and its universities.
The budget that is being scrutinized is a snapshot of the budget from June 2012. Much of the money did not come from tuition but rather from federal grants, financial aid, gifts and other sources of revenue. Roughly $414 million come directly from tuition. All of this is out of a $5.6 billion budget that UW System operates on.
“The billion dollars that is being thrown around, it’s not really a billion in reserves,” David Boardman, next year’s vice president of the Student Government Association, said. “When you are reading these news reports and seeing the larger numbers thrown out it is not really quite accurate on what can actually be touched as far as going through the budgetary process.”
The University of Wisconsin- Stevens Point was quick to produce their budget for inspection. UWSP’s target tuition is $53 million and this year they generated $57 million. Some of the extra tuition was used to fund projects for the UWSP campus, and a small portion of about 7 percent was left in reserve. The recommended reserve is 17 percent. Of the total UW reserve UWSP contributed 2 percent.
“We knew what we had here, so our numbers were not a surprise to us,” said Erin Hintz, the budget director for UWSP. “I think we were a little surprised as to the magnitude of the system as a whole. I think we do understand that a lot of it is tied up in grants and federal funds and financial aid.”
In light of the reserve, the governor is calling for a tuition freeze,which would mean no raise in tuition for at least two years. The state is questioning why the UW system has been raising tuition over the last few years instead of using the reserve.
“Right now everyone is in the process of figuring out where the money is on their campuses and where the rest of it resides in system,” Boardman said. “There are a lot of unknowns right now.”
If the freeze goes into place it could put a stop the planned differential tuition for UWSP and could also
mean a loss to other programs. “It is kind of up in the air right now,” Hintz said. “I don’t know if it would mean a reduced pay plan for faculty and staff, or no pay plan. It would mean less money on the tuition revenue side to put back into campus and to invest in the things that we need. A lot of that money is used to hire faculty to have more classes because our enrollments are
growing.” There is concern that with the discovery of the surplus, the state will not give UWSP the requested $20 to $24 million from the Wisconsin Higher Education Grant.
“We have been playing by the rules and we have been keeping a really solid budget, which is good but then the down side of that is that by playing by the rules we might get the short end of the stick,” said Seth Hoffmeister, current president of SGA.
Several members of the SGA, including Boardman and Hoffmeister, went to Madison after hearing about the surplus and lobbied 14 different legislators to make sure that UWSP does not suffer consequences from the surplus.
“I think that a lot of the legislators there recognize the value in stepping back and saying that if there are consequences for the UW System, let’s be sure that we are not hurting the UW schools individually,” Boardman said. “Our argument was, do not hurt the students in the process.”
Part of the reason the reserve was set aside was to accommodate for budget slashing. With less funding coming in from the state, UW needed something to fall back on. The argument now is how much of a reserve is acceptable for the UW System to have.
“I agree to an extent that you do need a certain amount of reserves,” Hoffmeister said. “It’s not so much that they have a reserve. The question on both sides has been framed as: what is an appropriate level for a reserve?”
It is uncertain what the outcome and ramifications of this $414 million budget will be.
“Our job is not done,” Hoffmeister said. “Our student government has been doing everything that we can to make sure that our students here are protected throughout this whole debate that is going on.