Government Relations

Testimony on Pending Legislation: Assembly Bill 239

Before Colleges and Universities Committee
May 3, 2005
Testimony of Peter Spear
Provost and Vice Chancellor for Academic Affairs
University of Wisconsin-Madison

Thank you Chairman Kreibich and members of the committee for the opportunity to speak with you today. My name is Peter Spear, and I am the Provost and Vice Chancellor for Academic Affairs at the UW-Madison campus. I am here today to testify in strong opposition to Assembly Bill 239. Although I oppose the bill, it does direct the spotlight on the critical question of the relative roles of state and student-tuition financing of public higher education, and that is an important discussion to have.

Let me begin by describing the impact this bill would have on the UW-Madison campus budget. As you have just heard, capping tuition increases at 3 percent per year would result in a System-wide loss of over $70 million over the biennium unless there is additional GPR to offset the lost revenues. The UW-Madison portion of that funding loss is approximately 37 percent, or $26 million over the biennium. This cut would come on top of the $23 million and $15.5 million cut in the first and second years of the current biennium, during which we also lost 250 positions. In the 2005-07 budget proposed by the Governor, UW-Madison would be required to make additional cuts to reallocate $20.3 million, and we would lose an additional 80-100 positions, of which only 35-40 would be replaced with new faculty lines in 2006-07. The proposed tuition cap would further reduce the resources available to carry out our mission, and this would have serious negative impacts on our students and the state.

I’ll describe some of these consequences in a minute, but first allow me to provide some context for the tuition discussion. Currently, UW-Madison’s resident undergraduate tuition is second lowest in the Big Ten; only Iowa is lower. Our tuition is nearly $1,700 per year below the median of the public Big Ten universities. It would take a tuition increase of 28.6 percent just to get us to the midpoint of our peers, assuming they do not raise their rates. At the same time that resident tuition is among the lowest of our neighboring states, so is the funding provided by the State of Wisconsin. According to the National Conference of State Legislatures, Wisconsin is dead last among its neighboring states in terms of its general fund appropriations as a percentage of total state funding. Wisconsin spends 7.1 percent of its state budget on higher education, while the other Big Ten states invest between 9.1 percent and 21.7 percent of their state budgets. In fact, nationally, Wisconsin is tied for 45th lowest among all states. Thus, we have a double whammy: We are lowest among our neighboring states and peers in state support and next to lowest in student-tuition support. Cutting our resources even further will result in great harm.

We already can see the negative impacts of the budget cuts of the current biennium (2003-05). For example, we have had to eliminate some class sections, increase class size, and reduce summer programs. This has serious consequences for the state as well as for students. While the market demand for graduates in nursing, pharmacy, biotechnology, and other fields is calling for more graduates, our schools and colleges cannot accommodate enough students, and the quality of education they receive is hurt. In addition, innovative and much-needed programs like ESL and professional certificates are being shelved so we can support core classes.

In addition to these effects on our educational mission, the cuts have made it more difficult to maintain our leadership in federal and private funding. We have had to significantly reduce resources available for grant writing, documentation, and compliance. In addition, our information technology support has been reduced. As a result, we face serious challenges in our ability to apply for grants and to fulfill state and federal requirements for servicing grants.

Perhaps our most urgent concern is the impact that limited resources have on our ability to recruit and retain high quality faculty. The quality of our university depends on the quality of the faculty. Last year, on the heels of the last budget cut and two years of poor pay plans, outside offers to our faculty nearly doubled (from 52 to 98). At the same time, our ability to retain faculty who received outside offers declined from about 75 percent to about 55 percent. When we lose our best faculty to outside offers, the quality of the education we provide our students declines and the quality of UW-Madison’s research and creative work declines. This reduces our ability to bring federal research funding to Wisconsin, and it reduces the strength of the powerful economic engine that is driven by the faculty of the University. These are the people who generate $800 million per year in research dollars and over a hundred new high-tech businesses and 4000 high-paying jobs at the research park. These are the people who educate our students to achieve the baccalaureate degrees and the skills to fuel the economic recovery and future growth of the state.

Two years ago, our salaries were 2.5 percent behind the median of our peers. Last year they were 3.9 percent behind. This year they are 7.3 percent behind. With the state offering 2 percent increases to our faculty this upcoming year while our peers are projecting increases of 2-4 percent, we will fall even further behind. As a result, our ability to retain and recruit high-quality faculty will be further weakened. If we continue to lose our best faculty, there is a very real possibility that UW-Madison will go from being a world-class university to a mediocre one. This would be a tragedy.

Let me conclude by answering an obvious question: Why can’t tuition increases be held to the level of inflation? Part of the answer is that with below-inflation increases in state funding, above-inflation tuition increases are required if we are to bridge the gap. Another part of the answer is that our cost-to-continue expenses have been increasing faster than inflation. We have little or no control over these costs, which include health-care, utilities, information technology, and libraries. For example, the subscription prices for our journals are increasing 11 percent next year. Further, as I just discussed, our salary market is highly competitive and national in scope, and we must meet that market if we are to hire and retain high-quality faculty.

We cannot meet these increased costs if tuition is capped at 3 percent unless the lost revenue is replaced by increases in state funding. The alternative is to have higher tuition increases but to protect access for low-income families with a commensurate increase in financial aid. This is the “hold harmless” proposal made by the UW Board of Regents.

Again, I appreciate the opportunity to discuss these issues with you today. The public does need to talk about this important policy question of higher-ed funding. I hope my testimony today has helped provide understanding of the challenges we face. I urge you to oppose this bill, but to continue this dialogue.