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April 3, 2003

President Lyall discusses budget with student journalists

University of Wisconsin System President Katharine C. Lyall spoke with student journalists from across Wisconsin Monday (March 31) about the state budget, financial aid, student tuition and the priorities of the UW System.

During a teleconference with reporters and editors from UW student newspapers, Lyall primarily fielded questions about the 2003-05 budget Gov. Jim Doyle presented to the Legislature in February. Doyle proposes cuts of $250 million to the UW System and the elimination of 650 positions. At the same time, the governor has included a provision to allow the Board of Regents to raise tuition to close the budget gap and reduce the UW cuts to $100 million over the biennium.

The governor's budget also calls for an increase of nearly $24 million in financial aid. The funding would come from UW auxiliary reserves—fees that students have already paid for necessary building projects, such as residence halls and student unions.

The following is a summary of Lyall's conversation with student journalists.

Q: How will budget cuts to the UW System affect students?

Lyall: There are impacts for students throughout this budget—no matter how we take it. We will make every effort to preserve the services that are most essential to helping students graduate on time.

Our ground rules are to first cut administrative expenses most removed from serving students. However, students should be prepared for slower service times and to wait longer to see advisers. Starting in fall, there may also be a smaller selection of available courses. The budget may force us to eliminate some of the faculty and staff who now provide sections, and this could result in a loss of as many as 1,000 course sections across the UW System.

The governor's budget puts most of the cuts to the UW in the first year. Students would feel the pain right away, and people who would lose their jobs would do so in the fall.

After administrative expenses are reduced, we will look to eliminate or merge academic programs and personnel in areas with low enrollment. In addition, we do support tuition increases that would place UW close to the average of our peers. Lastly, we may be forced to downsize enrollments in future years.

Q: Do you favor equal, across-the-board cuts to UW System campuses?

Lyall: We have proportionally distributed the cuts to campuses based on size. However, we leave it up to each individual campus to decide how to manage those cuts. Campuses can decide what they think will have the least impact.

Everything is on the table, but we need to make sure the same programs are not cut at every campus. Campuses need to make the first round of judgments, then we will make sure it makes sense across the state.

Q: How would students—both resident and non-resident—be affected by tuition increases?

Lyall: Non-resident students actually pay more than the cost of their education, which subsidizes the costs of 5,000 resident students—that is not a small number. However, we do not want to lose or penalize out-of-state students by raising tuition too drastically.

Non-resident students also bring important diversity to campus—an important goal of the UW System's Plan 2008. We will continue to work hard to make sure out-of-state students know that there is financial aid available. We do not want tuition levels to rise above the average of our peers. It really depends on what states around us are doing.

The Board of Regents hopes to approve tuition levels for the next academic year by the first week of July. This will be easiest if lawmakers have approved a budget on time. If not, the board may have to again set tuition without knowing where the state budget will end up. I do not think we can let students and parents drift past July without knowing what tuition will be.

Q: What's being done to help low-income students, who could feel the effects of tuition increases the most?

Lyall: The governor has proposed nearly $24 million in financial aid to help mitigate any increases for the students most in need. At the federal level, Congress has begun debate about increasing the level of the Pell Grant. Students can help get the message to Washington by contacting U.S. Sen. Russ Feingold, U.S. Rep. Tammy Baldwin of Madison and U.S. Rep. Ron Kind of La Crosse, who are on congressional budget committees, and urging them to increase the Pell Grant to $4,500.

Q: Last time the Board of Regents was faced with drastic budget cuts, it froze admissions until the budget was settled. Why has the reaction been so different this time?

Lyall: The last time the Legislature proposed dramatic budget cuts, it did so under a different set of circumstances. First, at that time, tuition increases would have been capped at 8 percent. That would have left the UW System with decidedly fewer resources to serve students. Also, the last budget proposals surprised us and left the board and campuses little time to make decisions.

We have had much more time to discuss and debate the options and what they might mean this time around. Also, if tuition in this budget was capped at 8 percent, the difference would have to come out of reductions in enrollment in future years without GPR funding to replace it. If the Legislature approves the tuition increases included the governor's budget, we will be able to preserve access to the UW.

Q: Can the UW System raise funds from other sources to make up the difference in state cuts?

Lyall: Not in the amounts we are talking about. UW institutions are among the top colleges and universities when it comes to winning outside grants, but those funds are earmarked for specific projects. We cannot just take money that donors give us for one project and instead use it to reduce cuts to our budget. The state really needs to do its part to support the UW System. Right now, we are being asked to make a huge sacrifice to close this deficit. The state must invest in people and research that will pay off in long-term dividends.

Q: How will the state freeze on building projects affect development on campuses?

Lyall: We are appreciative that the Building Commission agreed to approve UW projects already in progress, most of which are necessary maintenance projects for campus facilities. They are still holding new projects, but I hope we can persuade them to release those that do not use state funding. These projects would not cost the state money, and the hold on them hurts economic development.

Q: Have legislators shared with you their thoughts about the governor's budget?

Lyall: Legislators have not indicated that they want to reduce the governor's cuts to the university, but we are working very hard to make sure that the cuts do not go any deeper. The cuts cannot get any bigger or they will have a dramatic impact on access.

Some legislators have also said they are uncomfortable using auxiliary funds to pay for financial aid and are encouraging the use of GPR funds instead. I think that is only fair to the students. Eventually, those auxiliary funds would need to be replaced, whether through GPR dollars, by further postponing or canceling necessary maintenance projects, or by increasing segregated fees.

There is a little bit of a dispute about using student fees for the aid increases, but I do not think there is any dispute about the need for those financial aid dollars.

Q: How much influence will the Legislature's Joint Finance Committee have in the final outcome of the state budget?

Lyall: The budget process changed a bit this year, and the Joint Finance Committee will likely have a lot more influence over these decisions than it has in the past. It is important for the committee members to hear that we have taken more than our fair share of budget cuts.

Q: Will the UW System ask faculty members to take pay cuts?

Lyall: Faculty members in all likelihood will not be receiving pay raises, but at the same time, I hope we are not forced to decrease their pay to manage budget cuts. I am afraid that if we enact pay cuts, we will lose our best faculty. We are going to try to hold the line. It takes 20 years to replace the best faculty once they are gone. Across-the-board pay cuts would not be appropriate at this time—it would be like using a meat axe when we need a scalpel to solve the problem.

Q: Will the UW System close any of the freshman-sophomore UW Colleges campuses?

Lyall: All of our campuses have growing demand. I do not see us closing campuses unless we have to make significant reductions in enrollment. The real issue is not which campuses would be closed, as some legislators have suggested. The question is whether the state wants us to continue to serve 160,000 students. If so, the notion that closing campuses will save a lot of money is false. Campus closings have arisen as a possibility several times over the last decade. When lawmakers put pencil to paper, they will see that it is not the way to go.

Q: What have you and the Board of Regents learned from listening sessions over the last month?

Lyall: We have heard a varied and useful set of viewpoints. We have heard good input from community members about how budget cuts would impact local businesses and cultural programs. We have heard from school principals who stressed the importance of the teacher training the university provides, and we have heard from hospitals that need the university to continue training nurses for their communities. It is important for us to hear how the larger quality of life in Wisconsin is affected by cuts to UW campuses.