Committee amends UW budget provisions

May 24, 2013

by Greg Bump

Editor's note: This story was originally published after JFC action on the UW System budget on May 23. Updates will be provided as the budget process moves towards its conclusion.

The Joint Finance Committee (JFC) on Thursday recommended providing the UW System $89 million less in the next biennium than Gov. Scott Walker proposed in his amended budget, and delayed for two years the implementation of UW–Madison’s HR Design and the UW System’s overhaul of its personnel system.

The budget plan for the UW System was passed in an omnibus motion that wrapped several initiatives into one proposal. The motion passed on a 14-2 vote.

Among the many provisions in the motion, the JFC action eliminates flexibility proposed by the Governor allowing the UW to manage the employee pay plan. Instead, any pay plan funds would be dispersed through the state compensation reserves, as has historically been the case.

As expected, the committee adopted a two-year freeze on undergraduate, resident tuition for all UW System institutions. Most segregated fees are also frozen for two years. Additionally, the committee required a mandatory United Council fee become optional for students.

The motion specifies that differential tuitions approved prior to June 1, 2011 are exempt from the freeze.

In addition, $58 million will be transferred from UW reserve funds to the Higher Educational Aids Board (HEAB) in fiscal year 2014 to provide grant assistance to undergraduate, Wisconsin residents. However, an equivalent amount of state funds will be withdrawn from HEAB’s budget.

In a statement, UW System officials pledged that reserve balances will be used to cover fixed costs. But the budget as constructed by the JFC motion leaves the system with a structural shortfall of at least $61 million at the beginning of the 2016 fiscal year.

The motion directs the UW System to develop a methodology for calculating tuition and extension fee balances, and to present the plan to the Joint Audit Committee by Sept. 1 for review and approval.

By Jan. 1, 2014, the system must submit to the JFC proposed reserve balance limits for each institution, and for the system as a whole, for a 14-day passive review process. Under the process, if the committee does not take action within 14 days, the policy is approved.

The JFC submission must document policies on the annual distribution of tuition revenues and state general purpose revenues (GPR) to institutions, and the expenditure of GPR and tuition revenues during the fiscal year.

UW–Madison and the UW System had been granted the authority to create separate human resources systems from the state personnel system in the 2011-13 state budget. Implementation of those systems was to begin July 1, 2013 but has been moved back to July 1, 2015 by the committee action.

The committee approved the governor’s revised recommendation to require the Board of Regents to reallocate $28 million for new initiatives — including new funding for translational imaging research at the Carbone Cancer Center and the WARM and TRIUMPH programs at UW–Madison — that were to be funded by state dollars under Gov. Walker’s initial budget proposal.

The governor’s economic development incentive grant program was preserved, however, the UW System will now be required to reallocate $22.5 million over the biennium to cover initiatives under the program. In addition to shifting the funding sources for these grants, the committee set guidelines related to awarding these grants, as well as requiring approval by the Board of Regents, Department of Administration and the Legislature under a 14-day passive review process.

The committee also approved the governor’s revised recommendation for the flexible degree option to require the Board of Regents to allocate nearly $2 million, and fund 13 positions, for the program over the next biennium.

Finally, as a result of discussions with the university and the telecommunications industry, the committee put forward changes to the law that allows UW-Madison’s connection to several research networks to continue beyond July 1, 2013.

The budget bill must still be approved by majorities in the State Assembly and Senate, and signed by Gov. Walker.  The new biennial budget takes effect July 1.