By Tom Still

MADISON – The stage is set for a state Capitol debate over
the future of the University of Wisconsin System, from its smallest two-year
campus to its flagship research powerhouse in Madison.

Here’s hoping the debate is an honest effort to improve the
performance, accessibility and accountability of the state’s largest higher
education system, not a political exercise driven by perception rather than

The details aren’t known because Gov. Scott Walker is
keeping his cards vested, but the UW System is bracing itself for a round of
state budget cuts in the two-year cycle that begins July 1. That’s the “stick.”

Read this column in the Wisconsin State Journal here

The “carrot” may be enhanced management flexibility for the
UW in areas such as hiring and pay decisions, certain tuition categories,
construction projects and other areas now overseen by the state.

The question is whether the budget cuts, which may total
hundreds of millions of dollars, will be offset by cost savings and other
efficiencies generated by looser apron strings tied to state government.

The UW System budget is roughly $6 billion per year overall
for 26 campuses and central administration, with about $1.2 billion of that
amount coming from state tax dollars. The rest comes from program revenues
(largely tuition), federal grants and contracts and other sources, such as
private donors and foundations.

In other words, about one-fifth of the UW System budget
comes from state government – along with a disproportionate amount of red tape
and expectations.

Among those expectations is that the UW System do a better
job of driving economic and workforce development. That includes producing the
kind of undergraduate and graduate students the market wants, generating
world-class research, working with major state companies and helping to create
startups. It does all of that, although results don’t always match what’s seen
in other states.

Then again, the UW System doesn’t operate in a vacuum. A recent report by the Milken Institute noted that Wisconsin is already 37th in state support for higher education among the 50 states and 31st in state spending on student aid. The Center on Budget and Policy Priorities ranked Wisconsin 47th in the percentage decline in higher education spending from 2008 through 2013. It’s hard to build a stay-at-home, knowledge economy workforce without investing in young people.

And while most research dollars come from external sources – federal government, private foundations and private industry – state dollars help pay for the basics that attract those outside dollars.

Reports consistently show that college graduates in
Wisconsin can expect to earn less than their counterparts elsewhere, which
makes it harder to keep the best and brightest home. For example, average
engineer salaries for job postings in Wisconsin are 11 percent lower than
average engineer salaries nationwide, according to January data from Wisconsin companies might want to consider paying what it takes to
attract and retain talent versus blaming the UW System for not launching
duplicative engineering programs.

To be sure, the UW System has done its part to erode decades
of bipartisan credibility. The budget reserve disclosures two years ago caused
some lawmakers to question whether the university was hiding money while
raising tuition. The political result was a tuition freeze. Former UW-Madison
Chancellor Biddy Martin also found herself in a bind a few years back when she
proposed autonomy for the UW-Madison – but not the rest of the system, which
lobbied against her plan.

The budget reserve issue has been partly explained by a
breakdown of how many dollars are required reserves tied to research and other
long-term commitments, and how much money is kept as a standard operating
reserve. As UW-Madison Chancellor Becky Blank told the business-led Wisconsin
Technology Council board of directors last week: “If any of you were carrying
the level of uncommitted balances that I am, they would fire you.” In her case,
that’s 1 percent.

Still, there are reasons to ask why the UW System doesn’t
consolidate more budget procedures, similar to what’s done in other states.
Lawmakers have also raised questions related to possible program overlap between
the UW System’s two-year campuses and the Wisconsin Technical College System.

With new leadership in place on the Board of Regents, in the
UW System and many major campuses, the receptiveness to change should be high.
After all, many Regents are Walker appointees and the Republican-led
Legislature appears to have warmed to new System President Ray Cross.

The coming debate will test whether the Capitol wants to
reform higher education in Wisconsin or punish it. The former is an ambitious
goal; the latter could harm efforts to build Wisconsin’s knowledge-based