In an effort to improve financial transparency, University of Wisconsin Chancellor Rebecca Blank released a simplified breakdown of the university’s $2.9 billion budget this week.
Last year, lawmakers and taxpayers scrutinized the UW System Board of Regents over a lack of clarity in a large pool of reserve funding. The Budget in Brief UW released was part of a system-wide effort to engage in transparent financial reporting.
Board of Regents unanimously approves report on fiscal reserves
UW receives about a third of its federal grants from federal grants or federal financial aid, according to the report. Gifts and nonfederal grants, tuition and segregated fees and state revenue each contribute 17 percent or about $500 million to the university’s budget.
In recent years, support from the state has been on a steady decline, according to the report. In 1976, state support was almost 30 percent higher than it is today.
Courtesy of UW Office of the Chancellor
The UW System recently requested a $95.2 million increase in taxpayer funding, which the Republican co-chair of the state’s budget committee called a “tough ask.”
Additionally, Gov. Scott Walker and the state Legislature approved tuition freezes for in-state, undergraduate students for back-to-back academic years, and campaigned on the promise of continuing of the tuition freeze.
A tuition freeze, of course, means that form of revenue is not going to increase, Blank said in an interview with The Badger Herald. Tuition and state dollars make a large portion of university funding and a majority of that goes into faculty and staff salaries, Blank said.
However, this limits the university’s opportunity to put targeted funds toward salary increases, she said. Faculty salaries at UW are 12 percent lower than peer universities, she added.
“Four years is a long time to freeze your main revenue source,” Blank said. “Very few schools have ever done that because of its impact on quality.”
In addition, it restrains the university’s ability expand and improve on programs that are in high demand, she said.
“Cuts to faculty and staff obviously have very real implications for students,” she said. “It’s going to mean larger class sizes and less opportunity outside of class to connect with professors for research opportunities.”
One page in the report addresses need-based support for students. It identifies a nearly $4000 gap low-income students face even after using all the grants or loans they received.
Blank said half of the financial aid given to students is provided without help of state funding. The UW System receives the lowest amount of state financial aid than any other peer school in the region, she said.
“If we’re cutting dollars, it’s going to be very hard to avoid an impact on financial aid,” Blank said.
In order to compensate for the tuition freeze and likelihood of state-level revenue cuts, the university will have to look in other areas. Blank mentioned raising out-of-state tuition is one option, in order to become competitive with other peer universities. According to the budget report, UW has one of the lowest rates for non-resident tuition in the Big Ten.
Blank also said the university is in the midst of a major fundraising campaign. However, she clarified that even when they receive large gifts of millions of dollars, these are usually dispersed using endowment plans. This means they receive only a very small percentage of the gift annually.
“You have to be careful in a fundraising campaign with what the dollar amount means,” she said.
