By Tom Still
MADISON – It’s the Great (Non)Debate: Can the UW-Madison survive as a public university when public dollars make up a declining share of its budget?
That’s the question being posed these days by UW-Madison Chancellor John Wiley, whose believes the university’s role as a catalyst for Wisconsin’s high-tech, high-growth economy will diminish if state investment in higher education stalls.
Wiley also believes the university will become less accessible to students from middle-class and poorer backgrounds if tuition continues to rise to replace state taxpayer support. Inexorably higher tuition will price out a talent pool that must be tapped in order for Wisconsin to have a bright economic future.
“Without planning for it, without talking about it as a public policy issue, we, as a state and a nation, are systematically withdrawing public support for public higher education,” Wiley said last week at a meeting of the Wisconsin Innovation Network (WIN) Foundation in Madison. “This is the No. 1 public policy issue ﾅ that has yet to be discussed or debated.”
Wiley’s comments echoed his remarks at an earlier Milwaukee meeting of WIN, the membership subsidiary of the Wisconsin Technology Council. His warning should be heard by state policymakers and business leaders, who may have been lulled into thinking the UW-Madison, and even the UW System, can function primarily on tuition and private donations.
The UW-Madison has a direct effect on Wisconsin’s economy. Less than $400 million per year in state taxpayer investment leverages a total budget of $1.8 billion and a $4.7 billion impact on the economy as a whole. The 75,000 jobs created by UW-Madison lead to state and local tax payments of $347 million per year – almost the equal of the state investment.
The total economic impact of $4.7 billion does not include the ripple effect of indirect university economic activities, such as the 107 mostly private companies in the University Research Park or the technology transfer work being conducted by the Wisconsin Alumni Research Foundation.
“We do have an impact, much bigger than most people realize,” Wiley said.
But is that economic engine getting the fuel it needs? From 1973 to 2003, Wiley said, the taxpayer-funded portion of UW-Madison’s budget has decreased from 43 percent to 21 percent; tuition increases, private dollars and program cuts made up the difference. In real dollar terms, state support for the UW-Madison increased 281 percent over those 30 years at a time when inflation grew by 272 percent. The state budget as a whole grew by 500 percent, with spending on corrections (2,100 percent), Medicaid (1,400 percent) and K-12 school aids (1,000 percent) leading the way.
Wiley argued that if the state really wants a return on education spending, it must follow up its investment on K-12 with an investment in higher education – which produces the workers who earn the high-end salaries. There is a $1,500 per capita investment in K-12 education in Wisconsin, Wiley said, versus $220 in higher education.
“Yet the payback to society from a college degree is larger and quicker,” he said.
Wiley also challenged Wisconsin business leaders to rethink their opposition to all tax increases, arguing that the “no new taxes” approach has foreclosed the opportunity to reform the tax system in a way that matches today’s economy. While personal income and property taxes in Wisconsin are high, he said, other taxes are modest. He urged lawmakers to consider a plan, submitted at the 2002 Wisconsin Economic Summit, which would shift some of the tax burden to sales taxes.
“Frankly, most business people have sung one tune so consistently and so loudly that it drowns out everything else, and that tune has been that our taxes are too high,” Wiley said. “Our tax system needs to be revised, but everybody is scared to death of touching taxes because of the message that (state lawmakers) have been receiving.”
Wiley’s message may not be welcome in the Capitol or the corporate board rooms, but it deserves a fair hearing. The state must build a “knowledge-based economy” to prosper in the 21st century, and a cornerstone in that base is its public university system. There simply aren’t enough private dollars and tuition increases to substitute for public investment in higher education. Either we have a public university system, Wiley is telling us, or we don’t. Let’s at least debate the question.
Still is president of the Wisconsin Technology Council and the former associate editor of the Wisconsin State Journal in Madison.