After the University of Wisconsin System called for a tuition increase despite holding over $1 billion in reserve funds, lawmakers have voiced plans for a possible budget reform for funding the system in the governor’s budget.
A number of Republican leaders in the state, including Gov. Scott Walker, have pledged their support for a UW System tuition freeze based on the recent findings from a Legislative Fiscal Bureau memo Friday. One Republican even questioned the state’s level of biennial budget funding to the system.
However, Rep. Howard Marklein, R-Spring Green, said he believes the state budget for UW should not be increased given the surplus.
“With the new knowledge of such a large surplus, I believe we need to re-assess Governor Walker’s current budget recommendation for an increase of $181 million in [general purpose revenue] for the UW System,” Marklein said.
The bureau reported Friday the system holds more than $1 billion in total appropriations, including $648 million once federal aid, grants and other costs are excluded.
Shortly before the LFB analysis was released Friday, UW System announced its plan to increase tuition for the following year by 2 percent, a significant decrease from the 5.5 percent annual increases since 2005.
Dylan Jambrek, student government relations director for the United Council of UW students, said he does not think it is appropriate to reduce funding for UW System.
“We understand the anger, but we do not want a decrease in funding, as it may hurt students,” said Jambrek.
A group of accountants discovered the hundreds of millions of extra dollars in the University of Wisconsin System’s cash reserves, which sparked backlash among lawmakers and student groups Friday after a state analysis was made public.
Four Republican representatives – Rep. Chris Kapenga, R-Delafield; Rep. John Klenke, R-Green Bay; Rep. Dale Kooyenga, R-Brookfield; and Marklein – said in a statement Monday that the Certified Public Accountant Caucus discovered the system’s $648 million in cash reserves after questioning financial discrepancies with Legislative Fiscal Bureau analysts.
Last week’s LFB report also shows a total of $400 million dollars is left unused by the UW System. The Legislative Fiscal Bureau cites the steady rise in the system’s student tuition totals, noting it was $212.8 million in 2009 compared to $414.1 million in 2012.
Noel Radomski, director and associate researcher of the Wisconsin Center for the Advancement of Postsecondary Education, said in an email to The Badger Herald no one in state government had asked UW System if it had a program revenue cash balance until there was a legislative inquiry regarding a financial report.
“The problem is that the UW System (reviewed and/or approved by state government) does not have reserve policies, goals and reporting requirements, which is awkward,” Radomski said.
A tuition freeze would force UW to dip into the surplus revenue disclosed in the Legislative Fiscal Bureau’s report.
During the past three years, tuition increases were preventable by UW System, Mike Mikalsen, spokesperson for Rep. Steve Nass, R-Whitewater, said.
“UW System President Kevin Reilly could have held down tuition increases,” Mikalsen said.
He added the UW System knew it was running on a surplus, but continued to increase tuition despite the best interest of students.
Mikalsen also dispelled the system’s argument of the surplus acting as a financial safety net because the revenue surplus UW System has accumulated over the years totals to 26 percent of educational operations, which he said any accountant would consider “very high.”
Associated Students of Madison Legislative Affairs Chair Dan Statter said he does not believe the recent surplus disclosure will affect Walker’s proposed budget for UW System. However, he affirmed ASM supports a tuition freeze.
“The surplus should go towards decreasing the financial burden on students,” Statter said.
Reilly will testify before the Joint Committee on Employment Relations today regarding UW personnel systems.
