Republican lawmakers grilled University of Wisconsin System President Kevin Reilly over the UW System’s $648 million surplus at a Tuesday hearing that was originally intended to focus on giving it flexibility.

The Joint Committee on Employment Relations hearing gave a chance for the state’s top lawmakers to question Reilly over why he was calling for tuition increases given the size of the surplus. Because of Friday’s reports on the surplus, the committee decided to hold off on giving the UW System and its Madison campus more authority over their payrolls.

“We’re not angry; we’re disgusted,” Senate President Mike Ellis, R-Neenah, told Reilly. 

Assembly Speaker Robin Vos, R-Rochester, told reporters after the hearing it’s “too early to tell” whether the Legislature will fully fund the $181 million for the UW System that Gov. Scott Walker proposed in his budget, although he said he has heard from many legislators that they should not.

Lawmakers on both sides have promised a tuition freeze, a contrast from the 5.5 percent increases students have seen for the past six years.

Vos said lawmakers’ trust in the UW System has been “wiped out” and said he regretted being one of the only people pushing for increased flexibility two years ago.

Ellis raised concerns about how little involvement the UW System Board of Regents had on the issue.

He asked multiple times for details on when the regents learned about and voted on having the surplus. Reilly said regents voted on a full budget with the surplus not clearly detailed, although the regents’ business committee heard about the surplus.

Reilly emphasized $441 million will go to campus initiatives, and $207 million is being saved as a safety net. He told lawmakers he would come back with a plan on what an appropriate future balance would be before he brings it to the regents.

The UW System’s surplus, Reilly pointed out, is below the levels of peer institutions and is meant to cover three months of operations. He said public universities nationwide have increasingly had to rely on such balances, rather than state funds.

The UW System has also had to plan for less high school graduates projected to attend its schools, which he said would lead to less tuition revenue and a smaller budget, harming quality for future students.

“We’re trying to [do] good strategic planning on a longer term basis so the UW System remains strong, remains accessible and remains at the quality level that people have come to expect,” Reilly said.

The surplus was outlined in a Legislative Fiscal Bureau memo Friday that stemmed from some legislators’ questioning of a recent audit that found about $33 million in benefits overpayments at the UW System.

Shortly before the memo’s release, Reilly released a statement outlining some initiatives the UW System will spend on and called for a 2 percent tuition increase. Vos criticized that statement’s timing.

When Republicans learned of the $648 million surplus Friday, $414 million of which comes from tuition revenue, they called for a tuition freeze and condemned the UW System’s mismanagement and lack of transparency.

UW Interim Chancellor David Ward gave an example of something UW is using last year’s reserves for: increasing engineering graduates. The university has to save money for next year’s initiatives a year before, he said.

Reilly said lawmakers should consider state support for the UW System has trended downward and has led to it needing to increasingly rely on more uncertain revenues from its balance. Senate Minority Leader Chris Larson, D-Milwaukee, echoed those comments.

“The only thing predictable about [the system’s budget] is that it’s been cut every single year,” Larson said, although Vos pointed to the proposed $181 million investment in this budget.

Republicans said they were angry about the UW System talking about needing to raise tuition due to “devastating cuts” from the Legislature in past years.

“It seems like you’re telling me the exact scenario we went through is one that [you were] saving the money for, but only you were smart enough to know that the money was set aside,” Vos said.