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UW system hoards financial surplus

Christopher Johnson, Opinion Writer
May 8, 2013
Filed under Opinion

In February, student representatives from various UW campuses around the state descended on the Capitol in Madison to urge state legislators to hold down the annual tuition increases to no more than 3 percent to 4 percent beginning this fall. The cap is currently at 5.5 percent, and was scheduled to end on June 30, which in turn, would leave tuition rate increases in the hands of the Board of Regents.

Then along came the bombshell revelation: a five-member panel of Certified Public Accountants in the Wisconsin State Assembly known as the CPA Caucus released a report to the Legislative Fiscal Bureau detailing a nearly $1 billion financial surplus sitting in the UW System’s coffers.

State Representative Howard Marklein is a CPA and a member of the CPA Caucus that uncovered the surplus.

“We were troubled by what we saw in the state audit report,” Marklein said. “There wasn’t a lot of detail.”

Marklein said the entry on the reports that really grabbed his attention was the header that read tuition with its amount of $414 million just sitting there with no explanation.

UW System President Kevin Reilly has been feeling the heat from the fallout of this controversy and recently answered blistering questions from the Joint Committee on Employment Relations on the matter. Reilly insisted the Board of Regents never explicitly voted on how to allocate the surplus and said he supported the system’s decision to keep the reserve fund in the face of uncertainty in future GPR funding.

He cited a projected decline in university enrollment over the next decade that would cut into the tuition revenue, and the need to keep and attract quality professors to UW schools as reasons for the surplus.

Now, yours truly is not a CPA, nor do I aspire to ever become one, but that very last insinuation Reilly made does not sit well with me. Nor should it.

First of all, the very thought that the tuition caps were about to end and free reign was about to be handed back to the Board of Regents to increase student tuition is troubling.

In light of the rather steep tuition hikes over the past decade at UW system schools, it doesn’t take a genius to see this as a major cause of the possible university enrollment decline. If you keep jacking up tuition, then yes indeed, we will absolutely see that projected decline in enrollment over the next decade come to fruition.

Reilly’s next remark about the need to keep and attract quality professors to our schools has me just about ready to jump off this page and scream.

Up until very recently I was double majoring and was forced to drop one of those to a minor because of a lack of available funding for instructors to teach specific classes that were listed in the UWGB periodicity.

Instead of being able to take classes within the major I held a passion for, I would have been forced to take several classes that held virtually no interest to me at all.

This isn’t an indictment of my advisers or any of my instructors. I have enjoyed each and every one of their classes and am grateful that all of them continue to educate their students to the best of their abilities, because this brings me to my next point: Reilly’s contention that part of the surplus was needed to “keep and attract” quality professors to our UW System schools. Really? Because from where I am sitting, I am fully aware of the fact that our instructors, the very backbone of our educational experience here, have not seen a single dime in salary increases in nearly six years.

Six years. Let that number sit and stew for a moment, while you also consider the fact that the Board of Regents almost hiked up tuition rates once again. And I can assure you with confidence the Board of Regents and each of the UW Systems schools administrations most certainly have not gone six years without a raise, yet the very people tasked with our education have been forced to perform more with no additional compensation.

In addition to not seeing an increase in pay, our instructors have also been hit the past two years with furloughs – actual salary cuts. This is especially difficult to accept because our instructors here on campus earn far less than the national average annually.

I have friends who teach in the Green Bay Public School system who are making almost the same amount in annual salary as many of our college professors. So if this is Reilly’s idea of how to keep and attract quality professors to our system, his thinking is slightly flawed.

I understand the need for a rainy day fund. But a $414-$600 million rainy day fund?  That fund almost certainly would have continued to grow unabated with only the Board of Regents aware of its sizable existence. And the fact that it was most certainly not being used for the reasons he stated has some state representatives calling for Reilly’s head.

“This isn’t the first time we’ve had a problem with the UW System,” Marklein said. “This is a pattern. It’s year after year after year.”

Christopher Sampson is the Director of Communications for UW-Green Bay.

“The term ‘surplus’ isn’t right,” Sampson said. “It’s a cash balance.”

Sampson went on to say that UWGB also sets aside a contingency fund because if the school undershoots their enrollment target, they may have to start cutting back classes.

“We want to continue to serve the students at the same level,” Sampson said. “I understand the criticism and concern, because collectively that $400 million is a substantial number.”

He said 75 percent of students who take out loans here carries an average debt load of $23,000 at graduation.

It’s clear that the astronomical dollar amount being seen statewide is not divided equally among all of the UW System schools. For example, a statement on UW-Madison’s website from their Interim Chancellor shows that school accounts for nearly half the surplus, which makes sense given the size of the school and its medical and research facilities.

Sampson said Reilly is asking for a 2 percent tuition increase, and the governor and legislature is asking for a freeze. Given Reilly’s recent track record, I’m finding it difficult to fathom the idea that he would even mention another tuition increase.

“A freeze will make balancing the budget a little more difficult,” Sampson said. “If we can maintain the quality of the institution and not have to get smaller because of budget constraints, that’s a good thing. We’ve always operated on a slim margin here at UWGB.  We are operating within university standards.”

In a budget listening session May 3, Chancellor Harden revealed a salary study that confirmed employees at UWGB are 18 percent below the mean and 14 percent below the median of the university’s peers, more than 400 other institutions across the country that reasonably match up with UWGB.

“It’s by far the biggest need that we have, to fairly compensate the employees of this university,” Harden said. “We’ve set a goal to reach at least the median, which is going to be extremely hard if we can’t rely on some reserves.”

In the wake of this most recent incident, there is now growing widespread bipartisan support to freeze student tuition for at least the next two years.

While they’re at it, the Board of Regents and administration officials could demonstrate a little integrity by halting their own raises if they were expecting to receive one.

They can show respect to our hard-working instructors by ending wage furloughs and granting them the wage increases they so justly deserve, and bring on the additional staff needed to teach the courses we as students and taxpayers deserve. That act would go a long way towards improving morale among our faculty.

These are, after all, the very things Reilly stated those funds were to be used for, and we as students are paying for them out of our tuition and tax dollars.

If our instructors can make more by taking off to The University of Minnesota, or Preble High School, what’s to stop them?

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