Much criticism of Gov. Scott Walker’s budget proposal for the
University of Wisconsin System has focused on the $300 million in cuts
envisioned for the coming two years.
That’s not unexpected, given
that it represents about 13% of the state’s general tax support for the
university and 4% of total UW income from all sources.
Much less
attention has been centered on the likely benefits of creating a UW
System Authority as well as a long-term mechanism for providing state
tax support.
If both elements are fully part of the budget plan,
it could mean the difference between a deal that could harm the quality
and reputation of the UW System and a plan that puts higher education on
more predictable footing.
Read this commentary in the Milwaukee Journal Sentinel here.
Under Walker’s plan, a more autonomous
but no less public UW System Authority would have the ability to
streamline personnel processes and decisions, speed up building projects
and reduce costs, and modernize purchasing processes. It could make the
system more nimble and market-driven, save about $15 million to $20
million over the first two years and generally snip red tape in a system
that is among the most heavily regulated in the United States.
In
fact, Wisconsin is one of only a handful of states that have yet to
start moving to a public authority model for their university systems.
There are two problems with the authority proposal, however.
First, it may not go far enough in freeing up the UW System to manage itself.
There
are some requirements that could remain in place, making it harder to
relieve individual campuses of mandates and for the human resources
system to achieve full efficiency. Also, some authority would remain
with the state Department of Administration and the State Building
Commission when it comes to UW construction projects.
As proposed,
the UW System Authority would keep money generated by the Minnesota
tuition reciprocity agreement. Right now, that money goes into the state
general fund. That change would produce $10 million in the budget’s
second year. But will the Legislature seek to do away with tuition
reciprocity altogether if it’s perceived Minnesota gains more than
Wisconsin through the deal?
That highlights the second problem: Lawmakers may not be ready to give up control.
Although
state government provides only 20% of the support for the UW System’s
overall budget, it exercises a disproportionate amount of control. Will
the Legislature approve the spending cuts and water down the power of
the authority? Leaders in the UW System, as well as many business
leaders, would see that scenario as the worst of both worlds.
One
of the most innovative parts of Walker’s proposal is to create a
dedicated funding stream for the UW System Authority, which system
President Ray Cross has described as providing “much greater,
long-lasting predictability and stability.”
Similar to the state
transportation fund, which is walled off to prevent “raids” on its
dollars, the UW System Authority fund would come from a dedicated source
— the state sales tax. Beginning in 2018-’19, it would come with
Consumer Price Index changes tied to the previous year.
As Cross wrote recently in a Journal Sentinel guest column:
“The governor’s proposal would end the counterproductive price swings
and spikes students have endured over the last two decades. A reliable,
dedicated revenue source for a more autonomous UW System means we can
develop and hone long-term pricing and financial models that will
make…investments in higher education predictable and stable for
students and families.”
Again, there are caveats tied to exactly
how much freedom the Legislature will give the UW System by the time its
budget debate is completed in June.
If lawmakers decline to
approve the sales tax carve-out or refuse to grant the ability to raise
out-of-state tuition rates and professional school tuition rates, both
of which are among the lowest in UW System peer groups, the university
will be left with a massive budget cut and no tools with which to manage
it.
The debate will continue over whether the $300 million in
cuts are too deep and too fast. Simultaneously, however, there needs to
be a conversation about how committed state government is to untying
apron strings and building a reliable UW System funding platform for the
future.
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