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December 4, 2003

University of Wisconsin System Board of Regents
December 2003 Meeting
Day One News Summary

Financial aid reallocations are hurting campuses

University of Wisconsin System campuses are being forced to make difficult cuts to meet a state budget directive for additional financial aid dollars, members of a Board of Regents committee learned Thursday.

In the most recent budget, state lawmakers required the UW System to use $26 million in auxiliary funds to supplement state financial aid-a one-time source that will not meet the ongoing demand for such funding, said UW System Vice President for Finance Deborah Durcan.

"Campuses are deep into determining where to cut to generate the $26 million," Durcan told the Regents' Business and Finance Committee as part of the December board meeting. "This biennium was a crisis. There were a lot of holes to fill."

Darrell Bazzell, UW-Madison vice chancellor for administration, said these cuts are not really about financial aid but instead how the university is funded.

Bazzell said while the campus appreciates that the Legislature and Governor Jim Doyle understand the need for additional financial aid to offset tuition increases, the campus hopes the auxiliary funds model is not used in the future.

Bazzell said UW-Madison is making cuts to generate $8.6 million—its share of the funds. The cuts have left the School of Nursing and the Veterinary Medicine teaching hospital without the ability to replace necessary equipment; have meant $172,000 less for scholarships provided through licensing contracts; have reduced reserves that serve students studying abroad; and have forced cutbacks in a student-run, educational printing service, Bazzell said.

The largest UW-Madison cut of $3.3 million has come from an account designated for construction of a new parking facility to serve the west side of campus, he said.

"This has caused us to go back and ask questions about how we ought to budget," Bazzell said. "I don't think we solve this financial aid problem until we solve the larger issue of what the state commitment will be."

Greg Diemer, vice chancellor of administration at UW-Stevens Point, said the loss of $1.7 million in auxiliary funds at UWSP is affecting more than 800 different campus operations.

Examples include the campus transportation service, which is now in a deficit because the cuts required use of account balances that were already committed for construction contracts. In addition, services have been reduced at the campus dissolved gas laboratory, which provides analysis for industry and education for students, as well as at the hands-on environmental field station near campus.

Diemer said that in addition to the effects of reduced services, faculty have called the cuts "demoralizing" as they offer no incentive to grow quality programs.

Rachel Marlett, a UWSP senior and residence hall president, spoke on behalf of students, who asked the committee to help ease the effects of the cuts. Specifically, Marlett said the cuts to residence hall budgets affect student safety and security.

"I still live in a safe, clean, comfortable environment because of what people were doing 40 years ago," she said. "That's what I'd like to do for those who are in kindergarten today."

While students do understand the need for additional financial aid, Marlett encouraged the committee to share the students' desire for a sunset on the use of auxiliary funds.

Tom Sonnleitner, vice president for administration at UW-Oshkosh, said his campus "plans for the worst, and hopes for the best," but these cuts are beyond the worst-case scenario.

"We're essentially being punished for good management," he said.

Sonnleitner said the campus had been saving $300,000 to add sprinklers to high-rise buildings on campus as mandated by law. The savings have now been reallocated to cover these cuts, and the campus has been forced to bond for the project, increasing the cost by $150,000, he said.

Regent Mark Bradley of Wausau asked if the business officers had talked with their legislators about the impact of these cuts. All said they had conversations about the issue, but the complexities are difficult to convey.

"This can't be a long-term solution," Durcan said. "It can't sustain itself."

Lack of financial aid limiting access for needy students

Wisconsin must modernize its financial aid policies to ensure that more low-income students can attend college, the UW System Board of Regents was told Thursday.

During a discussion Thursday morning about state and national financial aid policies, several regents and university officials expressed concern about the declining number of needy Wisconsin students attending UW campuses and lack of financial aid to support them.

Figures compiled by the UW System Office of Policy Analysis and Research show that students from families with less than $30,000 annual income comprised only 11.2 percent of new UW freshmen in 2002, down from 14.7 percent a decade ago.

Meantime, students from families with high family incomes—more than $83,000 a year—made up 23.8 percent of new UW System freshman in 2002, up from 18.1 percent in 1992, according to the research presented by OPAR Director Sharon Wilhelm.

"My view is that this is one of our most fundamental problems," said Regent Vice President David Walsh of Madison. "Low-income people are losing access to the one thing in the state that can really help them."

Speakers told the regents that increases in state and federal financial aid are not keeping up with increases in tuition, and that students now rely more on loans than grants to pay for their education. Cuts in state funding for public higher education exacerbate the situation, they said.

Joni Finney of the National Center for Public Policy and Higher Education told the regents that Wisconsin's college participation rate for low-income students has dropped by 15 percent in the past five years, the fourth-largest loss in the nation.

Finney said her organization advocates tuition and financial aid policies that favor financial-aid distribution based on need and not merit; promote a low-cost alternative for higher education, such as two-year public colleges; and call for limiting tuition and student fee costs to no more than 20 percent of average family income.

UW System President Katharine C. Lyall told the board that the average cost of UW System tuition and student fees comprises about 15 percent of family income, well below the national average of 22 percent. But the trends are shifting, she said.

"We are moving as a system and a state from a low-tuition/low financial aid model to a state with average or moderate tuition and low aid," Lyall said. "Is there a way to get our financial aid policy more in sync with this new tuition policy?"

Lyall said Wisconsin's tradition of low tuition has resulted in subsidies for students and families who can afford to pay more for college.

"The move to moderate tuition is requiring those students who can pay more to pay," Lyall added. "The missing piece is how do we ensure that low-income students are not disadvantaged?"

UW-Eau Claire Chancellor Don Mash encouraged the regents and the system to consider undertaking a public awareness campaign to help low- and moderate-income students and their families understand that college is not as expensive as they might think.

David Olien, UW System senior vice president for administration, added that other institutions of higher education have undertaking marketing and advertising efforts with success in this area. The UW System is limited with these approaches, however, because of targeted cuts to marketing and advertising budgets by state lawmakers.

"Advertising is not a luxury but a necessary approach to reach non-traditional and low-income students and convince them that college is affordable and desirable," Olien said.

Regents review issues related to access to the bachelor's degree

Wisconsin can do more to increase access to bachelor's degrees, the Board of Regents learned Thursday afternoon.

Frank Goldberg, UW System associate vice president for policy analysis and research, told the board that Wisconsin lags behind its Midwestern neighbors and trails the national average in the percentage of residents over the age of 25 with a four-year degree.

In 2002, 23.2 percent of Wisconsinites had earned four-year degrees, compared to 29.8 percent in Minnesota, 28.1 percent in Illinois and the national average of 25.9 percent, Goldberg said.

Goldberg explained that Wisconsin compares fairly well with its neighbors in providing a college education for its residents. But it trails Minnesota and Illinois and other states in attracting college-educated young people to the state, Goldberg said.

Goldberg stressed that the university system can provide more access for non-traditional students and other underserved populations. He emphasized that need-based financial aid plays an important role in providing access to a bachelor's degree.

Other approaches to increasing access include enhanced credit transfer opportunities; expanding associate's degrees on four-year campuses; further collaboration between two- and four-year UW campuses and also between UW institutions and the Wisconsin Technical College System; and more distance education courses.

Other changes to increase access, such as boosting state-funded need-based financial aid, would require legislative approval, Goldberg said.

Education Committee adopts final credit transfer initiatives

The Board of Regents' Education Committee on Thursday endorsed the final two items of a six-part plan to increase credit transfer opportunities between the UW System and the Wisconsin Technical College System.

The final two items were referred back to the Education Committee by the full board in November for minor modifications.

One item approved Thursday would allow WTCS students in college-parallel programs at the Madison, Milwaukee and Nicolet campuses to transfer up to 72 credits and satisfy general education requirements at any UW campus, subject to UW faculty approval on those campuses.

The second item would create a broad-based committee to explore options for expanding the number of Wisconsin residents with bachelor's degrees "in collaborative and cost-effective ways."

Regent Fred Mohs of Madison said he appreciated the specific language of the item that calls for faculty approval of WTCS courses that transfer to meet general education requirements.

"We share governance, and we share it gladly and with gratitude," Mohs said.

Regent Roger Axtell praised the changes in the final two items as well, especially the directive to seek options for expanding access to bachelor's degrees in cost-effective ways.

He said that was especially important in his hometown of Janesville, which houses both a technical college and a two-year UW College campus. In addition, there is a private college nearby in Beloit, and the four-year UW campus in Whitewater is just down the road, he said.

"The last thing we want is costly duplication," Axtell said.

The full board will vote on the credit transfer items at its Friday meeting.

The committee on Thursday also reviewed the UW System faculty sabbatical reassignments for 2004-05. Several regents praised the program for its ability to enhance learning and teaching at no additional cost.

The committee heard from David Kindig, an emeritus professor of population health sciences at UW-Madison, who described how his one-year sabbatical in 1995-96 "changed my professional life."

"Everything I have done since that time has accrued from that experience," he told the committee.

Kindig researched and wrote a new book on purchasing population health that has greatly influenced his field of study. In addition, research Kindig conducted during his sabbatical led to the development a new course now required for master's and doctoral students in the department; caused the department to broaden its academic mission and change its name; and helped land a five-year, $5 million grant from the Robert Wood Johnson Foundation to create a health and society scholars program.

In the jacket to his book, Kindig not only thanked his parents for their support but also Wisconsin taxpayers, "for making my sabbatical possible through generous support of their great state university," the book jacket says.

UW System Senior Vice President for Academic Affairs Cora Marrett stressed that faculty sabbaticals are extremely competitive and not all are approved. The number of sabbaticals is stable compared to past years and calculates to about 3 percent of total faculty.

UW System President Katharine C. Lyall said that private businesses generally use the benchmark of spending 5 percent of their budgets on professional development. The UW System comes in under that figure, she noted.

"Any cutting-edge business realizes that you need to keep your talent on the cutting-edge, and we expect that, too," she said.

Regent Fred Mohs of Madison said faculty sabbaticals are critical to maintaining quality and recruiting new professors.

"I totally stand behind this program," he said.

In other action Thursday, the committee approved a proposal to create a new bachelor's degree in engineering physics at UW-Madison. The full board will vote on the new program Friday.

Business and Finance Committee hears about EdVest changes

The Regents' Business and Finance Committee Thursday learned about changes in EdVest, Wisconsin's college savings program, in reaction to questions raised about fund mismanagement by Strong Investments.

UW System Vice President for Finance Deborah Durcan told the committee that the College Savings Board has approved four new mutual fund alternatives for investors with lower fees in time for end-of-year investments and tax reporting.

Durcan also told the committee Thursday that the university expects a draft of the Legislative Audit Bureau's review of UW System administrative costs in time for the Board's February meeting.

In other business, the committee forwarded resolutions for consideration by the full board that would:

  • Authorize further actions on establishing the Wisconsin Partnership Fund for a Healthy Future;
  • Approve a report on state imposed costs;
  • Approve a report on continuing appropriations; and
  • Approve a new Academic Support Services Agreement with Bit Seven Inc., related to the IceCube project at UW-Madison.

The committee did not forward a resolution that would have allowed UW-Madison to expend the full amount of a $100,000 bequest, which under regent policy became a quasi-endowment, for lack of a second.

In a joint session with the Physical Planning and Funding Committee, the Business and Finance Committee heard a first reading on a proposal for a differential tuition program at UW-Platteville.

The program would provide a tuition discount for students from Illinois and Iowa to enroll in Platteville's nationally ranked programs in engineering and other fields.

Students in the program would still pay far more than the cost of their actual instruction, and the additional revenue would help serve Wisconsin students and pay for needed campus renovations. The program would not limit access to Wisconsin students.

In closed session, the Business and Finance Committee voted to divest trust-fund investments from Tyson Foods, in response to concerns raised by the public and students at the regents' annual trust funds forum in November.

The committee's action was also prompted by the recent decisions by UW-Madison and UW-Milwaukee to discontinue the purchase of Tyson products until the current labor dispute at the company's facility in Jefferson, Wis., is settled.

The committee's action divests trust funds holdings in Tyson, which were invested in bonds with a market value of approximately $200,000. The decision will be directly communicated to the concerned student groups, according to the committee.

UWRF proposal for Kansas City Chiefs gets committee OK

The Regents' Physical Planning and Funding Committee on Thursday unanimously approved a proposal to update a UW-River Falls physical education facility used by the Kansas City Chiefs for the team's summer training camp.

The $2.2 million proposal would add a 12,000 square-foot addition to the Hunt Arena/Knowles Physical Education and Recreation Center, used by the Chiefs for the past 13 years for their summer training camp.

The project has been endorsed by several state legislators and Governor Jim Doyle. The Chiefs' four-week summer camp is estimated to generate approximately $2 million in economic impact for River Falls and western Wisconsin.

The project is needed because the Chiefs need more locker room and training space with various updates, such as air conditioning. The team recently signed an agreement to return to UW-River Falls next summer, with an option for another four years, after several universities in Missouri and Kansas tried to lure the team to their campuses for training camp.

The full board will vote on the proposal Friday.

Nancy Ives, UW System assistant vice president for capital planning and budget, also reported to committee members Thursday that the State Building Commission approved about $33 million for various UW projects at its November meeting. Ives said the Building Commission expects to make recommendations for building program process improvements by early winter that could save both time and money.

In other action Thursday, the committee approved resolutions for consideration by the full board that would authorize:

  • purchasing property on Wright Street to house UW-Madison's Materials Distribution Service and its Surplus With a Purpose program;
  • an easement on UW-Madison Agricultural Research Station land at Arlington for fiber optic cable installation;
  • a population health laboratory renovation project at UW-Madison;
  • remodeling of the north wing of Lapham Hall at UW-Milwaukee;
  • a land-use agreement for renovation of UW-Oshkosh's Titan Stadium and an acceptance of a gift-in-kind;
  • renovation of UW-Oshkosh's Taylor Hall and a waiver for a single prime contract;
  • appointment of Kim Meadows to the architectural control committee for University Hill Farms and the design review board for University Research Park at UW-Madison.

Regents' study group discusses future of university with legislators

As part of the Regents' "Charting a New Course" study of the university's future, the Partnership with the State working group met with three legislators Thursday to discuss the university's role in Wisconsin.

Sen. Alberta Darling, R-River Hills, told the working group that the Legislature is divided in its opinion about the university. She said many members feel the UW System drives the state's economy by providing educated, trained workers and facilitating tech transfer, while others say the university is a "spoiled child" and feel the state does not get a proper return on its investment.

Darling said the state's ultimate goal is economic development, and that the university is a necessary partner. She proposed that the Legislature and the university work in the coming months to draft a strategic plan to "turn the state around" over the next five years.

"We must let people know that Wisconsin is good for business," she said.

Rep. Mike Huebsch, R-West Salem, stated that the Legislature generally reacts to trends in the state as they happen, and expects that the university should be able to better anticipate future trends to assist the state. He said the university can serve the state as an "idea engine" as well as an economic engine. He said he appreciated his good relationship with UW-La Crosse, and said other campuses should strive for similar relationships.

"If you don't have that relationship, that's your fault," he said. "[The Legislature's] all over the map. We're divided and that's our fault."

Huebsch said when the university finds itself in trouble it is often a result of "poor timing," and he encouraged the university to remember how its actions resonate with citizens and the Legislature.

Rep. Jennifer Shilling, D-La Crosse, said she understands that the university took an unfair share of budget cuts, and said the Legislature should be mindful of the "big picture." Shilling said the UW System needs to work with those legislators who may not have campuses in their districts to win more friends and advocates.

In addition, Shilling said the university should expect "knee-jerk" legislation as a result of recent "PR blunders," but said in the end, the Legislature and university should forge new partnerships.

Regent Peggy Rosenzweig of Wauwatosa asked Huebsch if there were specific measures the university could take to assist the state. Huebsch said the UW System should remain mindful of the important relationship with the technical college system and continue to improve credit transfer before the Legislature steps in to take action.

UW Colleges Chancellor Bill Messner suggested that the Assembly Colleges and Universities Committee should institutionalize and sustain its discussions about the UW System to ensure continuity in the same way that counties do about the two-year UW Colleges in their areas.

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The Board of Regents will continue its December meeting on Friday (Dec. 5) starting at 9 a.m. in 1820 Van Hise Hall, 1220 Linden Drive, on the UW-Madison campus.