Republican leaders called for a tuition freeze at the University of Wisconsin System Friday after learning of a $648 million positive balance the system has, although the system has already planned for spending more than half of it on its initiatives.
Republicans said they were “outraged” to learn about the balance, which was laid out in a new Legislative Fiscal Bureau memo. The UW System has planned $441 million in spending for its $648 million balance, according to the memo.
Of the $648 million balance, $414 million comes from tuition revenues, a number that has grown from the $212.8 million tuition balance of June 2009, according to the memo. The tuition balance grew despite the UW System facing about $300 million in cuts over the past two years.
Of the $414 million in tuition balance, the UW System has already laid out $332 million it plans on spending, part of it in initiatives UW System President Kevin Reilly announced shortly before the memo’s release Friday. Those initiatives included eliminating a financial aid waiting list, increasing work study, economic development grants and increasing spending on the new flexible option degree.
Republican legislative leaders released a statement criticizing the “pattern of incompetence” at the UW System. In a separate statement, Rep. Stephen Nass, R-Whitewater, the chair of the Assembly’s Colleges and Universities Committee called for the Board of Regents to fire Reilly.
In a statement, Gov. Scott Walker joined in the criticisms of other Republicans and ensured a tuition freeze in the budget.
“It is very concerning to learn the UW System has been running a surplus balance of this size, especially at a time when students, families and lawmakers have continually heard from the UW System about the need for more money to offset ‘devastating cuts,'” Walker said. “At a minimum, on behalf of students and their families, I am asking legislative leaders to freeze tuition increases for two years.”
For the past six years, UW System students have seen 5.5 percent tuition increases, which Reilly said Friday would substantially decrease if Walker’s budget proposals go untouched. Reilly proposed a 2 percent tuition increase, the lowest tuition increase since 1974 and one that would save students $70 million over two years compared to the usual 5.5 percent increase.
With Republicans in control of the Legislature, the tuition freeze they are now calling for has high chances of going through.
UW System spokesperson David Giroux said the system has always run a balance, and it increased because of higher enrollment and state cuts to the system. As the state gives less funds to the system, he said, the system then has to rely more on program revenue sources like tuition revenues.
Giroux said the system now pays for more departments and programs with its balance, rather than with state funds. As those revenue sources can change often, the balance ensures those programs can be paid for if revenue decreases, he said.
“As we become more dependent upon these somewhat volatile program revenue streams, we need to make sure that we are hedging against that volatility to some degree,” Giroux said. “The more program revenue you bring in, the more dependent you become [on that source], the more you need to set aside some kind of safety net.”
Republicans had capped tuition to 5.5 percent in the last biennial budget, in which they cut $250 million from the UW System, and later cut an additional $66 million in a budget lapse.
Walker removed that cap in the budget he proposed earlier this year, which included a $181 million investment in the UW System. A large part of that comes from splitting the UW System payroll from the state budget to the system’s budget, although Walker’s budget would also invest in new programs.
United Council of UW Students has been pushing legislators to include a tuition cap of 3 or 4 percent. Dylan Jambrek, the group’s government relations director, said he was pleased students can now “have the comfort of a tuition freeze” but expressed concerns over the memo’s findings.
“Whatever the money was going towards, it’s concerning that they were raising tuition to stick it in the bank account,” Jambrek said.
Jambrek said he does not want legislators to overreact and do something that ends up harming students, such as cutting Walker’s proposed investments.
Rep. Cory Mason, D-Racine, is the ranking Democrat on the Legislature’s budget committee, which has 12 Republicans and 4 Democrats.
Mason called for a potential tuition reduction because he said UW System students are already graduating with $27,000 in student debt on average.
“Not only should we be freezing tuition given the news of the UW’s surplus, but the state budget deliberations should include a serious conversation about reducing student debt by lowering the cost of tuition, increasing student financial aid or both,” Mason said in a statement.
Reilly’s proposals on Friday, part of the $332 million in planned tuition balance spending from the memo, included reallocating $30 million to end the Wisconsin Higher Education Grant waiting list of more than 5,000 and making work-study more available.
They also included $20 million to match Walker’s proposed economic development grants, as well as $10 million more for the new flexible option program that Walker plans to spend $2 million on.
