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Remarks to the Board of Regents
UW System President Katharine C. Lyall
December 5, 2002

Budget and Enrollment Update

Last month, you asked that we update the Board on how we are managing the admissions process for fall 2003, what actions were taken by the campuses to manage the $44 million cuts taken this year, and how other states are handling similar cuts to their higher education systems.

I know I don't have to remind this audience how complex it is to try to coordinate a system of 15 institutions to balance access, resources, and quality … and still keep our commitment to enhancing the long-term economic future of the state. The chancellors, deans, admissions officers, and System staff work at this every day, and we are very conscious of the need to work hard on this. We must:

  • manage our human resources so that we retain and grow the best faculty and staff to educate our students--without this human talent, a UW education will rapidly lose its value;
  • we have to manage rapidly growing applications pressures in an environment of uncertainty about our core budget base;
  • and we struggle with timing! - our education calendar does not match the state budget calendar: campuses are making admissions decisions now for next fall and hiring faculty to teach these students through the spring. By next April, we will have made commitments to both students and faculty that cannot be cancelled quickly if we take a large budget cut in July.
  • we are also maintaining focus on student success by improving retention and graduation rates, as was discussed earlier;
  • maintain our flexibility to respond to additional base budget cuts that may be required as part of the state deficit reduction.

Now you will hear from a panel of campus leaders in a moment who have shouldered this task this year, all the "easy" and obvious things have been done--hiring and travel freezes, S&E (supplies and expense) cuts, postponed maintenance of buildings, ad hoc instructional staff substituted for faculty who are retiring ... the next round of cuts will require significant choices affecting the scale and scope of our future services, and I want you to listen to what the panel has to say about these things.

  • Applications for fall 2003 are running 24% ahead of last year, about 8,400 more than this time last year. They are up at every UW institution. UW institutions have admitted 22,000 new freshman or about 42% of the next freshman class. I have instructed the campuses not to exceed their 2006 overall enrollment level (adjusted for retention improvements) and to notify me when they have reached 95% of this level; and our Bullseye funding formula will not reward enrollment above the current levels, except for improved retention.
  • We will continue to manage credits-to-degree and excess credits taken to stretch state our instructional dollars as far as possible, and we did discuss this morning.
  • Campuses will manage new hires against retirements/vacancies to maintain a margin of flexibility in personnel as able. The faculty hiring season will be largely over by April or May; final staffing will determine in effect our final enrollment capacity for the year.

The situation at each institution is slightly different, so I have asked a panel of campus leaders to talk a bit about the challenges they have faced this year in managing the $44 million cut this year and some of the options they may face with future cuts:

Chancellor Tom George -- UW-Stevens Point
Chancellor Kevin Reilly -- UW-Extension
Provost Keith Miller --UW-Oshkosh
Dean Jim Perry --UW- Fox Valley
Dean Phil Certain -- UW-Madison

Their purpose here is not to complain, but to give us all a better sense of the complexities of managing large cuts at their institution, the kinds of tradeoffs that have been made, and the impacts those are having on students and staff.

(AFTER PANEL DISCUSSION)

You have seen how our campus leaders are no strangers to making tough choices.

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You have a brief table in your folders that summarizes some of the ways that other public Midwest universities are handling significant cuts.

  • it won't surprise you that all have used a combination of tuition increases, targeted reductions, and base reallocations, which we've used.
  • seven of the eight have imposed tuition increases of 10% or more--highest at University of Iowa (19.1%) and Ohio State (19% for new students). Four institutions have combined tuition increases with additional surcharges or new fees: University of Minnesota for example doubled its "university fee" from $75 to $150 per semester in addition to a 16% tuition increase. Purdue instituted a $500/semester fee for all new students; Indiana University increased its technology fee. In several states, double-digit increases this year followed double-digit increases made the previous year to deal with midyear rescissions. These are states fighting to maintain college access rates that have historically been similar to ours.

  • Most of these other universities are using targeted reductions strategies that we have also used in Wisconsin:
    • cutting positions/holding positions vacant;
    • freezing travel, supplies and expense budgets, building maintenance, administration, financial aid and student employment, library services, and course/section offerings;
    • consolidating or eliminating academic programs;
    • filling faculty vacancies at lower rank or with ad hoc staff.
  • I note, however, that other states have employed several strategies we have not yet used in Wisconsin. I'm not saying we should do these things, but offer them as food for thought:
    • requiring faculty/staff to pay a portion of health care costs;
    • early retirement window, or program;
    • cohort tuition increases, that is, big increases for incoming classes only, and/or double-digit tuition.