A Message to the Campus Community

Dear Colleagues,

Today, Governor Scott McCallum, in an address to a joint session of the State Legislature, introduced the Budget Reform Act of 2002, a package of budget measures and reforms. The State faces serious short-term budget problems, and the UW System will, in the Governor's proposal, share the consequences. Specifically, the Governor has proposed to reduce the UW-System budget by 4.5%.

I know this is an issue of great concern on campus. While we are still awaiting more detail, I want to share with you what we know at this early stage.

I'll start by expressing my confidence in our ability, together, to manage this situation. In fact, there is favorable news to be found in the Governor's proposal:

— The UW System would fare better than might be expected given the seriousness of the state's fiscal situation. The governor obviously recognizes that we are part of the solution. Other state agencies would experience double-digit budget cuts.

—Tuition for our students will be kept well below that of tuition levels at our peer institutions. (During the run-up to the Governor's speech, the idea of huge tuition increases had been floated.) We will, as a proudly public institution, be able to keep our commitment to access.

—There had been speculation that capital construction would be frozen. That is not a part of the Governor's proposal. Such a step would have delayed the Lab Sciences project and cost us, and Wisconsin, much more as construction costs rose and historically low interest rates increased.

—The pay plan for the second year of the biennium remains in place.

I must caution, however, that Gov. McCallum's proposal is just that, only a proposal. There is much more water that must go over the dam before we have a final budget. You will be hearing all sorts of proposals and trial balloons. This will require some patience on all our parts

Still, it is a proposal that would leave our core programs strong. It is a better "starting point" than many had predicted.

In addition, the Governor's plan points to the need for - regardless of the budget situation - an inclusive process that lets all of us help link our budgetary allocations to our collective priorities. To date, UW-Green Bay's approach has been to assume status quo budgets with initiatives being undertaken only if "new" funding is in place. That had to change and, prior to the seriousness of the current budget situation, we put steps in place to begin that change. This will be helpful as we prepare the budget for the second year of the biennium and, longer term, as we seek to support the best ideas of a highly creative faculty and academic staff.

That, then, is a snapshot of today's news from Madison. For those of you more familiar with UW System budget specifics, we currently believe that the numbers will work out as follows:

UW System, in the Governor's proposal, will have its GPR allocation cut by $50 million for the biennium. That is in addition to a $6.3 million ongoing cut to the 00-01 base with which we are currently living. The $50M figure includes a $4.2 million "lapse" for 01-02 that we implemented this year. That "lapse" now becomes a permanent budget reduction. In addition, UW System will need to make another $5.8 million budget reduction for this iscal year. This totals $10 million for 01-02 (or $20 million for this biennium).

We have addressed the cuts in the current year of the biennium by reducing reserves. That has affected programs and investments for which we have historically used the reserves. This includes replacement of equipment and scheduling of extra sections to meet immediate, unanticipated student demand for courses. We have the capacity, this year, to meet the expected additional reductions in 00-01 from such sources. However, what made sense when reductions were expected to be short-term "lapses" may not be as wise when permanent reductions are necessary, and so we will want to revisit these decisions as we plan future budgets.

For the UW System to reach the $50 million biennial figure, budgets will, in the second year of the current biennium, need to be reduced by an additional $30 million. We also receive, as a system, $36 million in additional revenue in the second year of the current biennium, and those funds, targeted at new initiatives and economic stimulus, remain in the budget.

Just how those two considerations - a budget reduction and an "economic stimulus" budget addition - play out is a matter of obvious importance. The willingness of the State to invest in higher education as a key to future economic health is one reason why we have not suffered, in troubled economic times, as much as is being proposed for other governmental entities. However, it is certainly my view that, when it comes to considering major budget reductions, all factors - including the economic stimulus package - must be on the table as we weigh the reductions that will have the fewest serious consequences for our ongoing commitments to serve our students, our region, and our state.

I will share additional information as it becomes available.

Bruce

01/22/02