University assesses its fiscal future

The UW System and UW–Madison are planning for the possibility that the 2003-05 state budget will contain another round of funding cuts.

“In all likelihood, there will be some sort of reduction coming our way,” John Torphy, vice chancellor for administration, says. “So, we have asked deans, directors and department chairs to look carefully at their budgets, and avoid filling vacancies and approving expenditures that are not critical at this time.”

It is still unclear how large the budget deficit will be or what level of cuts will be required of the university. New revenue projections are due from the Wisconsin Department of Revenue today (Nov. 20).

However, all state agencies — including UW System — were directed by Gov. Scott McCallum to submit reports on how they would handle a 5 percent budget cut in their 2003-05 biennial budgets.

UW System’s report, released at the Nov. 7 Board of Regents meeting, says a 5 percent reduction in state funding would cost the UW System nearly $49.5 million and could result in significant enrollment cuts and staff reductions. The report estimates that more than $18 million would come from the UW–Madison campus, based on its share of the state-funded budget.

“Cuts of this magnitude in the base budget would require reductions in the programs, services, enrollments, faculty and staff of the University of Wisconsin System institutions,” reads the budget analysis prepared by the UW System.

The report notes that program and service cuts could be avoided if the university were allowed to replace the cuts with an 8.4 percent tuition increase, which amounts to about $325 annually for resident undergraduates at UW–Madison.

“We did not reduce enrollments despite this year’s $44 million cut, but I believe we cannot do that again,” said Katharine Lyall, UW System president. “Further cuts will result in either tuition increases or enrollment cuts, or a combination of both.”

The $44 million cut contained in this year’s Budget Reform Act cost UW–Madison about $17 million. More than half of that cut came from the Madison Initiative, a public-private partnership aimed at improving student learning, strategic hiring and the Wisconsin economy.

Torphy says the unexpended funds for the Madison Initiative are no longer available to soften the effects of cuts, which is why academic units are being asked to curb spending on non-critical items.

“While a 5 percent cut, or $18.8 million, is purely illustrative at this point, it does point to the potential consequences of another major cut,” Torphy says. “It forces us to ask ourselves how we would handle a major cut without sacrificing quality and our students’ educational experience.”

As UW–Madison’s budget for the 2003-05 biennium is finalized in the coming months, the university will keep the campus community updated on how the budget issues are being addressed.