Board of Regents

Study of the UW in the 21st Century


STUDY OF THE UW SYSTEM IN THE 21ST CENTURY


FROM REGENT PRESIDENT MICHAEL W. GREBE

In August 1995, the Board of Regents of the University of Wisconsin System initiated a 10-month study to examine and address the key challenges facing public higher education in Wisconsin during a time of competing demands for state resources.

With participation by faculty, staff, students, elected officials, and the public, a series of draft recommendations were prepared by the Board for discussion with the UW System's stakeholders. Five regional public hearings were conducted by the Board. These were followed by a statewide "town hall" discussion sponsored by a consortium of commercial and public media outlets.

More than 1,200 individuals commented on the draft recommendations and related issues, reaffirming a broad interest in the UW System by the people of Wisconsin. In consideration of their thoughtful observations and suggestions, the final report of Study of the UW System in the 21st Century was prepared.

I would like to take this opportunity to thank those individuals who, by their participation in this process, have joined the Board of Regents in affirming the vital role the UW System has to play in Wisconsin's future.

Although the UW System is affected by trends in the external environment, the Board of Regents, UW System Administration, and our institutions have been working to achieve strategically important goals and objectives for the University, and thus, for Wisconsin's future. This report is a testimony to those efforts.



PREFACE

In undertaking a Study of the UW System in the 21st Century, we know we run the risk of being overtaken by events. If the University of Wisconsin Board of Regents had produced a Study of the UW in the 20th Century in 1896, it could hardly have foreseen a time when:
  • Every third Wisconsin high school senior would go on to attend one of our 26 UW System campuses;
  • More women than men would be enrolled as students;
  • The federal role in funding higher education would be as significant, in some respects, as the state's;
  • Widely scattered institutions, with diverse missions, would join with campuses not yet founded to become the nation's eighth largest university system; and
  • the state would expect its university system to be a leading partner in economic development, matching public and private investment with its own intellectual capital.
What has been constant throughout the nearly 150 years of public higher education in Wisconsin has been the persistent financial and moral support of the people of this state. Through wars, depressions, boom times and everything in between, the UW System institutions have been nurtured to maturity by an unflinching faith that education is the best investment the state can make in itself.

That investment now includes one of the world's premier research universities (UW-Madison), a strong urban-focused university (UW-Milwaukee), strategically located comprehensive campuses and two-year centers, and statewide UW-Extension. The state that built such a system can take pride in what it has accomplished.

Crossing the threshold into a new century is a largely symbolic passage. What is real is the need for continuous "future study," not once a decade but ongoing, so that the UW System can continue to be one of society's most farsighted and adaptable institutions.

Our painstaking study of the future of the UW System will not provide us with a perfect blueprint of everything that lies ahead. It does provide the best-informed opinion we have of the likely directions, the likely choices and the likely consequences for public higher education in the coming decade.

With the continuing support of those who believe strongly in the UW System, and with good plans to guide us, we are confident that we will be fully prepared for whatever an uncertain future holds.



INTRODUCTION


For almost 150 years, our state has relied on the institutions of the University of Wisconsin System to teach its children, find innovative solutions for its problems, and strengthen this great democracy. Today, Wisconsin still expects public higher education to do all of this and more. The UW System remains committed to exceeding the highest expectations.

Dramatic changes taking place around the world are echoed in every Wisconsin home, factory, farm, and city. The transformation of our nation culturally, demographically and economically, is reflected in the challenges confronting the UW System as we approach the 21st century, including:
  • Keeping college affordable for students of all ages and circumstances;
  • Preserving and enhancing the quality of educational programs;
  • Adapting computers and new technology for instructional use;
  • Accommodating a rising tide of new freshman enrollment and the growing educational needs of the adult population;
  • Using limited state funding more effectively and efficiently;
  • Maintaining a leadership position in research and technology transfer; and
  • Joining with K-12 schools, technical colleges and others in partnerships that serve society.

To address these and other challenges, the Board of Regents undertook a Study of the University of Wisconsin System in the 21st Century in the fall of 1995. It concluded in April 1996 with public hearings at five locations throughout the state, as well as at nine other sites through the use of two-way compressed video. Approximately 1,200 individuals made suggestions as part of the public commentary process. In addition, a consortium of state news media held a number of "We, The People" forums throughout the state to provide further public commentary on the preliminary study recommendations.

Study members included all Regents, all university Chancellors, UW System vice presidents, and representatives from the public, the faculty, the academic staff, and the student body. The Study Group met as a committee of the whole for the first two months to consider presentations by consultants on the environment facing the University System as it approaches the millennium. The Study then broke into five working groups to examine major areas of interest and develop recommendations for addressing four major goals:

  • Preserve and enhance access to quality;
  • Keep college affordable;
  • Create new knowledge and foster professional and career development; and
  • Continue to restructure and improve the efficiency of the UW System.

PURPOSE

In August 1995, Regent President Michael W. Grebe articulated the purpose of the Study --- to focus on policy and practice which need to be changed or fine-tuned to facilitate the performance of the UW System in the 21st Century. He noted that, 10 years earlier, the Board of Regents undertook a more comprehensive strategic planning effort, Planning the Future, and that the 21st Century Study should be a very "focused" exercise that "parallels" but does not replicate or replace Planning the Future.Public testimony regarding the Study made it clear that this final report should reiterate the UW System's strong commitment to the many important policies which this planning effort did not change and which will continue to guide our progress into the 21st century. Four policies which received public comment were:
  • Design for Diversity. The UW System remains strongly committed to its longstanding policies for diversity. The UW System must educate graduates to live and work in a dynamic and diverse society.
  • Research and public service missions. The strong record of this university system in basic and applied research, and in outreach to local communities, businesses, and individuals, will continue. The "Wisconsin Idea" is, if anything, expanded in this report through the commitment to the use of instructional technology and distance education to enhance university presence and the access to the university through the Internet and other delivery modes.
  • The commitment to quality. Quality and access are top priorities of this university system. We remain committed to both but, where fiscal limitations require a choice, quality remains the first priority.
  • Economic development. The UW System has long been a major stimulus to the Wisconsin economy through the approximately $440 million it brings into the state each year in federal support (including federal student aid), the impact of its research and technology transfer activities, and the overall quality of life it helps create. In addition, the "multiplier" effects of these expenditures boost incomes and earnings statewide. This emphasis will remain and continue to grow in the next century.

These policies are only a sampling of many which remain in place for the future. They are mentioned specifically because of explicit discussion and concerns about whether these policies remain a priority for the UW System. In April 1996, Regent President Grebe noted specifically in response to the public testimony that: "I suggest that we include in the final report ... a statement that recognizes our continuing commitment to all current policies not specifically modified by this study. Our silence doesn't mean we regard these topics as unimportant. In fact, they are very important." As Regent Grebe also noted [in his August 1995 charge to the Study], this exercise was not undertaken because the System is flawed, but to sustain its extraordinary leadership in maintaining quality, access, and affordability into a decade of change.



ENVIRONMENT

In September, Dr. Roger Benjamin of RAND Corporation outlined the changing context in which public higher education finds itself. Demographically, he noted, white males were nearly 100% of the student body at the turn of the century, but now comprise about 30% nationally (in the University of Wisconsin System, white males comprise about 40% of the student body.)

Nationally, Dr. Benjamin noted, base budget cuts occurred for higher education in many states in the early 1990's, while in Wisconsin the first such reduction in the history of the UW System occurred in 1995-96. Assuming continuation of present trends, he predicted that Wisconsin spending on K-12 education will grow somewhat faster than revenues, that corrections spending will grow much faster, and that spending on the UW System will decrease from 10% of the general fund (and over 14% at merger in 1973) to 8% by the year 2005.

He predicted that the number of qualified students seeking admission to the UW System will increase and the result will be a need to face squarely how much access can be provided from dwindling state funding and who will pay for access beyond that level.

Meanwhile, demand for research and public service will increase, but increasing even basic research must address pressing social problems and stimulate economic growth. The demand for continuing education and consulting and technical assistance to all levels of government will increase, but universities will have to rely more on non-government sources of revenue to fund all sectors of operations.

As public expectations of the universities grow while public funding decreases, universities must "get the questions right" and make use of technology, productivity improvement strategies, and incentive systems.

Wisconsin State Budget Director Richard Chandler followed with a presentation on the state fiscal future. He noted that Wisconsin's revenue growth has been better than many other states, and that cost controls would limit growth in K-12 funding (at about 4.25% annually). Mr. Chandler nonetheless echoed the direction of the trends projected by Dr. Benjamin for corrections spending increases (at perhaps 10% annually) and medical assistance spending (perhaps 7% annually) while the state revenue growth assumption is 5.7% annually.

Todd Berry, President of the Wisconsin Taxpayers Alliance concurred with Dr. Benjamin, and projected growth in K-12 funding, from 42% of the state budget general fund expenditures in 1996-97 (based on the state's new commitment to assume two-thirds of school costs) to 46% of the General Fund by 2004. He noted that the school funding change could be summed up in the words "sum sufficient," and will be a "first-draw" on the treasury. This decision "changes everything" about state budgeting and budget priorities. Mr. Berry expects real growth in support of the university from state funds will be very limited as a result. He invited the UW System to think creatively about: whether it should let the private colleges absorb a greater percentage of projected growth in high school graduates; whether remediation should be ceded to the technical colleges or back to the high schools; whether there are profit centers within the university which can be used to generate revenues; whether the relationship between the State and the UW System (now a state agency) should be reconceptualized to decentralize administrative controls from the state to the university system.

In response to Regent questions, Mr. Berry recommended decentralized decision-making, organization structures that were flat and lean, and changes in incentive systems from a research emphasis to more rewarding of instruction.

In October, Dr. Paul Voss of the UW-Madison Applied Population Laboratory affirmed the projections of UW System for an upswing in the number of high school graduates over the next several years, due to the "baby boom echo". He noted that Wisconsin population growth is not uniform within the state, with 13 counties growing at faster than 6% for 1990-95 and seventeen growing at less than 6%. Agriculturally-dependent counties are among the hardest hit, such as Richland county (a decline of 0.3%). He notes that restructuring of the workforce may lead to a higher demand for continuing education as workers seek new skills and expertise.

Addressing diversity, Dr. Voss noted that Wisconsin is experiencing the changing face of the nation , but at a slower rate than in many other states. The non-white population is increasing at relatively rapid rates, but the bases from which the increases are occurring are relatively small, so that the numerical growth is less than elsewhere. From 1980-90, while Wisconsin's overall population grew at 4%, Whites increased 1.5%, African Americans 33%, Native Americans 28%, Hispanics 48%, and Asian-Pacific Islanders 143%.

Dennis Jones, President of the National Center for Higher Education Management Systems, spoke to the need for systemwide planning that addresses the changes in demographics and the economic environment. However, he noted, this statewide planning also is urgently needed because the world of policy and planning has changed for universities. Students have become the majority shareholders in these institutions, as government shrinks as a funding source.

Mr. Jones noted that the role of the Board is to set the expectations (policy) and the planning agenda, and that governance and decision authority should be reallocated from the top and decentralized to the institutions. Regulation at the state level and Board level should shift from deterrent to incentive-based, and accountability should be recognized as becoming increasingly diverse as students and employers have more say in the services offered by public universities. Heavier emphasis should be placed on issues of affordability as financial aid falls short of covering costs. The Board of Regents will have to become more active in the creation and maintenance of the assets of the system, including facilities, people and equipment. Professional development of faculty and staff will be increasingly essential investments. Boards should also ask the universities to reach out to K-12 education in partnership.

In November, the Working Group on Access and Affordability met with a group of twelve state legislators at the Capitol for a roundtable discussion focusing on access, tuition, and management flexibility. Legislators indicated that they have heard relatively few complaints regarding access to the UW System. In response to the question of whether access should be limited, they noted it was important to taxpayers that the UW System provide reasonable access. There was some concern about eliminating programs to cut costs as this reduces access, especially for place-bound students. There was clear legislative concern that program reductions send the message that students have to leave the local community to obtain an education (it also drives up the student's educational costs). Some legislators saw technology as a way to partially fill in this gap. There was also a view that some UW Centers are underutilized and better promotion of this resource may be needed.

Legislators indicated they were not interested in providing new buildings to accommodate growth. Rather they supported increased renovation and remodeling of existing facilities and the incorporation of new technologies into those structures.

Legislators supported increasing nonresident tuition, especially at UW-Madison, while keeping resident tuition low. There was no legislative sentiment for increasing state taxes to support the UW System.

Finally, on the issue of management flexibility, it was pointed out that the UW System received some gains in this area, but full charter status was unlikely. In response to a question regarding increasing UW System flexibility to generate nontraditional revenue resources, some legislators indicated that these efforts would most likely mean equivalent GPR reductions.

The Working Group on Future Funding and Revenue Sources identified the need for additional state GPR funding in the future to cover modest compensation and operating cost increases as well as in meeting additional student demand above that which the UW System has committed to absorb through productivity enhancements. In the absence of such investment by the state, the working group projected up to a $150 million revenue gap in meeting projected needs.

The UW System already has been proactive in meeting public concerns regarding access and affordability and in addressing the changing fiscal environment for higher education:

  • We rank fourth nationally among all states in terms of the level of access to public higher education provided to high school graduates.
  • We use a substantially lower proportion of its budget for administrative costs than peer university systems - 6.3% vs. 10.8% - and our overall expenditure per student is about 20 percent below that of our peers.
  • Since merger, there have been 290 degree program eliminations systemwide compared with 263 program additions. In addition, the UW System is virtually unique nationally in the practice of requiring that all new degree programs be funded from institutional base budgets.
  • Tuition for resident undergraduates ranks near the bottom when compared with peers.
  • The total cost of attendance for students in the UW System is 75% of the national average for all public universities and 25% of the national average for private universities (see chart below.) In addition, it has grown at a slower rate than the national average since 1990-91.Total Undergraduate Cost of Attendance: UW System vs. National Averages(Tuition & Fees + Room & Board)

 
  UW System * Public University Private University
1990-91 $4,364 $5,584 $16,503
1991-92 $4,489 $6,051 $17,779
1992-93 $4,728 $6,442 $18,898
1993-94 $5,008 $6,709 $20,027
1994-95 $5,262 $7,035 $21,152
% Change:      
90-91 to 94-95 20.6% 26.0% 28.2%
 

* Excludes UW Centers. Source of national data: The College Board, September 1995.
  • We annually produce one of the most comprehensive systemwide accountability reports in the nation.


As the following page indicates, the final recommendations of the study closely parallel the advice of the external consultants who assisted with the environmental scan.


PART II

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