Regents approve UW System biennial budget request that supports students, quality education (day 1 news summary)

GREEN BAY, Wis. – The University of Wisconsin System Board of Regents today voted unanimously to approve UW System’s $262.6 million operating budget request for the 2023-25 biennium, which includes funding for the Wisconsin Tuition Promise.

Wisconsin Tuition Promise is a new initiative slated to start in fall 2023 to ensure underserved Wisconsin students can attend any UW System university without paying tuition or segregated fees.

The goal of the program is to increase the number of state residents who graduate with a bachelor’s degree – especially first-generation students and those from low-to-moderate income families throughout Wisconsin – thereby improving individual lives and communities and helping meet the state’s workforce needs.

“The Wisconsin Tuition Promise can be a game-changer,” said UW System President Jay Rothman. “State investment in this program will not only help transform lives but it will build a better Wisconsin for all of us.”

Modeled on Bucky’s Tuition Promise at UW-Madison, the Wisconsin Tuition Promise would provide up to four years of tuition and fee funding for first-year and transfer students coming from families earning less than $62,000 annually and enrolling at any of the other 12 public universities within the UW System. The program would be structured to provide “last dollar” financial support after federal and state grant aid is accounted for.

The UW System will provide approximately $13.8 million in one-time funding to cover the first year of the program. The system’s budget request asks the state for $24.5 million in funding in the second year of the biennium to support the ongoing costs for what will be two cohorts of students in the program at that time.

• See the Aug. 15, 2022, UW System news release: UW System President Jay Rothman and Chancellors announce Wisconsin Tuition Promise

Regent Scott Beightol, chair of the Business and Finance Committee, presented the 2023-25 operating budget request to the full Board.

In addition to the Wisconsin Tuition Promise, other highlights of the biennial operating budget request include:

• A 4% increase in general purpose revenue (GPR) funding in the first year of the biennium and 4% in the second year of the biennium. This base budget increase request of approximately $115 million over the biennium acknowledges the inflationary cost of goods and services and provides ongoing funding to support key student success initiatives at the UW universities;
• A recommendation to the State’s Higher Educational Aids Board (HEAB) of $24.5 million over the biennium for the Wisconsin Grant, the state’s primary needs-based financial aid program for resident students. Funding for the Wisconsin Grant is appropriated through HEAB and is not included in the total biennial funding request for the UW System;
• A Pay Plan with a 4% increase in January of 2024 and an additional 4% increase in January of 2025 for the UW System’s faculty, academic staff, university staff, and limited appointments.
  • See the UW System Board of Regents Aug. 18 materials which include the full Biennial Operating Budget Request and the Biennial Capital Budget Request

 

The Regents also unanimously approved UW System’s $2.5 billion Capital Budget request for 2023-25. Regent Ashok Rai, chair of the Capital Budget and Planning Committee, presented the request before the full Board.

Rai said the capital budget recommendation is based upon strategic priorities that emphasize the continued modernization, replacement, and repair of the existing infrastructure, while focusing on STEM and health sciences and the removal of obsolete structures.

The 2023-25 capital budget will renovate nearly 5 million square feet, demolish almost 1 million gross square feet, and construct about 1.3 million new square feet. Rai said the request will modify or affect only 10% of the UW System’s existing 69 million square feet.

UW System Student Affordability Review

Ben Passmore, Associate Vice President for UW System’s Office of Policy Analysis and Research (OPAR) presented the findings of a recent review of the affordability of pursuing higher education in the University of Wisconsin System.

Overall, Passmore said, the review found that the UW System compares favorably with peer institutions and against national public four-year universities. In fact, UW System tuition and fees remain the most affordable in the Midwest. Loan debt also has declined in recent years as has the percentage of UW students taking on debt.

Despite this overall success, there are indications that affordability remains a significant challenge for many students. The proportion of new freshmen at UW institutions from families with a gross family income greater than $100,000 has grown substantially in recent years. The proportion of first-generation students has fallen, and the percentage of underrepresented minority students in UW System’s enrollment has not kept pace with demographic change. Additionally, unmet need of undergraduate students has not declined over the last decade despite the increasing wealth of incoming students.

• See the UW System Affordability PowerPoint
• See the Aug. 18 UW System news release: UW System review finds costs affordable for most students, a challenge for those from lower incomes

President Rothman reiterated that investments in financial aid – like Wisconsin Tuition Promise – have the potential to make a real difference for students, families, and the state’s economic future.

“To succeed economically and improve the quality of life for all Wisconsin citizens, we need long-term investments that will address the skills gap and develop talent that Wisconsin needs in such critical areas as agriculture, health care, manufacturing, and technology, among others,” Rothman said.

UW-Parkside Chancellor Debbie Ford, whose institution has the highest percentage of Pell eligible students in the System at 55%, said the additional financial aid provided through the Wisconsin Tuition Promise “will be a differentiator for the students of Wisconsin.” But she reiterated that students require more than financial aid to be successful, and “wrap-around” student services are vital. “We need to look at the whole picture,” she said.

UW-Green Bay: “This is How We Rise”

Leading the host campus presentation, “This is How We Rise,” UW-Green Bay Chancellor Michael Alexander told Regents his university is taking innovative steps to grow enrollment, embrace the changing demographics of the region, and respond to changing workforce needs.

“We are motivated by the difference we feel we are making the lives of our students and the future of our region,” Alexander said. “Even more powerful is that our community also is rallying behind the promise of our potential and the approach we are taking to realize it.”

He said UW-Green Bay started making intentional changes around 2016 in response to regional calls for the university to help solve the problem of sustaining and expanding the economy and quality of life in northeast Wisconsin.

“We listened, changed our mission a few years later, and frantically began aligning our resources behind what could happen if we all united behind the idea of what occurs when a regional comprehensive becomes integral to the communities it serves and devotes itself entirely to the idea of access to education,” Alexander said.

UW-Green Bay is actively courting older students as well as pre-college students, he said, and both approaches are helping grow enrollment. The university’s Rising Phoenix program, for example, which is working to support economically disadvantaged students earn Associate degrees while they are still in high school, also helps get them into the funnel of higher education.

“We are competing with ferocity to get more students exposed to higher education,” Alexander said.

• See the full text of Chancellor Alexander’s presentation, “This is How We Rise”

Report of the Regent President

Regent President Karen Walsh, chairing her first meeting in that role, looked ahead to some of the challenges and opportunities facing the UW System.

Declining overall enrollments at UW System universities are a significant concern, she said, and UW System must work with campuses, K-12, and Wisconsin families to turn the numbers around. “We are an outstanding value but we need to communicate that better, and truly deliver on that value proposition,” she said. Further, Wisconsin business and industry leaders continue to express their ongoing need for more college graduates.

Walsh also expressed concern that student service officers continue to get vital support for their all-round work in setting the path for student success. Expanding the diversity of students and those who serve them on campus is also a priority, she said.

She also urged her Regent colleagues to “stay focused on our mission straight down the center aisle.” She added, “Patient, respectful, informative public discourse has never been more important.”

Updating Regents on some committee changes, Walsh said that after discussion the Research, Economic Development, and Innovation (REDI) Committee has been temporarily paused while new ideas are being considered to most effectively communicate, support, and expand on the university’s efforts to serve the state’s needs through research and partnerships with business and community leaders.

Walsh also said the Board’s Executive Committee will meet regularly to handle governance matters, such as assessing Board and committee operations to ensure work is aligned with the Board’s priorities and the UW System’s strategic plan.

Finally, she updated Regents on two chancellor searches. First, the UW-Whitewater chancellor search and screen committee, chaired by Regent Vice President Amy Bogost, has received its charge and developed a prospectus for the position. The national search officially launched July 1. Planning is now underway for listening sessions to be held at UW-Whitewater in September to further discuss the search for a new leader.

The membership of the UW-Platteville chancellor search and screen committee, which will be chaired by Regent Cris Peterson, is on track to be announced in early September. The search for UW-Platteville’s next leader will officially open later this fall.

It is expected both searches will conclude in early 2023.

Report of the UW System President

UW System President Jay Rothman reported that he has now visited eight of the 13 UW System universities, and eagerly looks forward to time on the remaining five universities. “It has been energizing to see all of the great work that’s taking place around the UW System and the unwavering focus on keeping things student-driven,” he said.

Rothman said it’s also apparent universities face hurdles. He, too, reiterated the challenge that declining enrollments pose, not just for universities but for the state of Wisconsin as well. “The war for talent is already fierce and it’s growing,” he said. “If Wisconsin doesn’t win that war, we all lose.”

He also pointed to the repercussions of deferred maintenance, with a significant portion of UW System’s building inventory constructed between 1950 and 1979, with little renovation or upgrades since. “Our aging infrastructure and the shortage of state-of-the-art facilities and equipment impede our ability to recruit and retain great faculty, staff, and students,” he said.

Rothman said a third hurdle facing universities is not having means to offer competitive compensation to recruit and retain faculty and staff.

Rothman also updated Regents on the UW System’s ongoing strategic planning process. “We’re making significant progress,” he said. Multiple meetings with a broad array of stakeholders have taken place, including a meeting with chancellors yesterday. Rothman said he expects to have a draft ready for the Board’s consideration at its September meeting and a final plan approved and ready to implement by the end of the year.

To be considered in the strategic plan, he identified three significant challenges to the state of Wisconsin where the university system might be part of the solutions.

First, the UW System can and should be part of addressing the war for talent that’s booming in Wisconsin, the nation, and globally.

Second, Rothman said the UW System and its universities are well positioned to help address the growing socioeconomic divide seen in Wisconsin and elsewhere. “Education – and higher education in particular – has the potential to be the ‘great equalizer,’ offering people new options and better opportunities for growth,” he said.

Third, at a time when society overall is polarized and people seemingly have access to boundless information of sometimes dubious quality or accuracy, the need for an informed and engaged populace is essential, Rothman said. “Universities must serve as the marketplace of ideas, a place where nuanced and complicated issues and ideas may be discussed openly and freely with civility,” he said, further noting that this reinforces the importance of teaching students critical thinking and analysis.

The draft strategic plan is being molded to address these challenges, he said.

Finally, Rothman called attention to several notable recent accomplishments around the UW System.

UW Oshkosh, he said, is being recognized nationally for its comprehensive approach to sustainability. The university recently received the U.S. Department of Education Green Ribbon Schools Postsecondary Award, one of only four higher ed institutions across the nation to receive the honor. The award recognizes institutions that reduce environmental impact and costs; improve the health and wellness of school, students, and staff; and provide effective environmental and sustainability education.

He touted UW-Superior for receiving the 2022 Energy Efficiency Excellence Award from Wisconsin’s Focus on Energy in recognition of their ambitious and recently completed lighting project. Retrofitting more than 5,200 fixtures and bulbs as part of an $812,000 project, UW-Superior’s annual projected energy savings will be about 731,000 kilowatt hours with cost savings of close to $53,000 annually.

Rothman also recognized UW-Green Bay’s spring/summer commencement where four indigenous educators became the first in the nation to earn a new doctorate in First Nations Education. As part of the program, the educators focused on studying native issues; conducting oral histories with tribal leaders, elders, and youth; and exploring ways to improve the educational system for native students.

Business and Finance Committee

The Business and Finance Committee received an update on the progress of the Administrative Transformation Program (ATP), which aims to standardize human resources, finance, and research administration business processes and implement new cloud-based technology at all UW System institutions. The key takeaway is that ATP is currently on budget and on schedule for deployment by July 2024.

Vice President Jim Langdon, UW-Madison Vice Chancellor Rob Cramer, and ATP Chief Technology Officer Joanna Wang detailed the extensive work undertaken for the project’s Planning and Architect stages over the last many months, and provided a timeline for future major activities through final deployment and beyond.

UW-Madison and all UW System universities will implement standardized business processes and enabling technology in a single phase, as part of a plan called the unified approach which will deliver program benefits to all UW institutions simultaneously.

In other business, the Business and Finance Committee:

• Heard a presentation by Sean Nelson, Vice President for Finance, on UW System’s 2023-25 Biennial Operating Budget Request. The Business and Finance Committee approved that request, which then moved to the full Board for consideration in the afternoon;
• Also heard Nelson’s year-end review of fiscal year 2022. This included a Budget-to-Actuals Report comparing actual revenues and expenses at the close of the year with the budget approved by the Board in June 2021. The report notes that total revenues from unrestricted sources were within just $17.5 million of the Board-approved budget. Total expenses ended at 98% of total revenues, and 2.8% over the Board-approved budget, largely due to COVID-related impacts such as supplies expenses;
• Heard a summary report on gifts, grants, and contracts awarded to UW System universities for the fiscal year. Total awards for the period were approximately $1.9 billion; this is a decrease of $368 million (or 16.0%) from the prior year, when significant one-time federal pandemic relief was provided for student and institutional aid. In FY 2021-22, support from gifts, grants, and contracts comprised 21% of the total all funds revenue in the annual budget;
• Approved the UW System Status Report on Large/High-Risk Information Technology Projects. The report details 13 major IT projects across the system. Five of those projects were completed since the last update in February, all under budget. The total project portfolio is $259 million, a 3.7% decrease compared to February;
• Approved UW System’s contractual agreement with HelioCampus, Inc. for a suite of data science and analytics services that will operationalize the Enterprise Analytics Platform project approved by the Board in June. This project will allow participating campuses to integrate their various datasets to enable improved decision-making. The four-year, $2.9 million contract will establish a systemwide infrastructure and support inclusion of UW-Green Bay as a pilot institution. Anticipating that additional universities will opt in to this service, the committee also authorized UW System to increase its spend on this contract to no more than $10 million as necessary to support broader participation;
• Heard a Trust Funds Quarterly Investment Report. As of March 31, 2022, UW System Trust Funds assets totaled $730.9 million. The Fund’s public equity investments decreased 5.3% during the quarter, while the bond investments decreased 6.2%, and the inflation-sensitive investments decreased 3.1%. For the quarter, the Long Term Fund decreased in value 4.2%, while the UW Fund Custom Benchmark decreased 4.25%. It was further noted that as downward trends continued into Q2, Long Term Fund assets decreased 7.7% ;
• Heard a Cost-Benefit Analysis of Foundations and Associated Affiliated Organizations Report for Fiscal Year 2020-21. UW System universities identified 85 foundations and associated affiliated organizations that supported their missions in fiscal year 2020-21. UW-Madison identified 44 foundations and associated affiliated organizations, the most of any UW System institution. In FY 2020-21, UW institutions received a total of $366.7 million from primary fundraising foundations, while providing $11.2 million in administrative support to these organizations;
• Heard a UW-Green Bay presentation on “Investing in Access and Student Success.”

Education Committee

The Education Committee held a broad discussion on direct admissions, a process which sidesteps the typical admissions process by proactively and automatically admitting students to college based on a data match between K-12 schools and postsecondary institutions.

As UW System seeks innovative ways to increase the rate of high school students who enroll in college, particularly from historically underrepresented groups, direct admission is a potential strategy.

Dr. Jennifer Delaney, Associate Professor of Higher Education at University of Illinois Urbana-Champaign, and Dr. Taylor Odle, Assistant Professor of Educational Policy Studies at UW-Madison, led the discussion and noted that under direct admission, all students are admitted to all open-access and non-selective institutions, while students who surpass a pre-identified threshold based on high school performance (such as GPA, standardized test scores, class rank, or a combination of measures) are also selected to selective institutions.

Johannes Britz, UW System’s Interim Vice President for Academic and Student Affairs, called for a representative group to be convened to provide a recommendation regarding the possibility of a direct admissions program at UW System.

In other business, the Education Committee:

• Approved UW-Green Bay’s request for a Master of Public Administration, a professional degree that provides students with hands-on and theoretical preparation for a career in public service. The public service sector is projected to grow by at least 17% through 2029. The program will include three pathways for completion to attract both traditional and nontraditional students: a traditional option, an accelerated continuation option, and an accelerated executive option;
• Approved UW-Madison’s request for a Master of Science in Engineering Management, which elevates an existing option within the Master of Engineering to a stand-alone degree. The Master of Science is the preferred degree for universities seeking to be certified by the American Society for Engineering Management, and within the engineering management education community. The existing option has shown long-term viability and anticipates enrollment will grow by approximately 10%;
• Approve UW-Parkside’s request for a Master of Science in Physician Assistant. The program responds to market and student demands for physician assistants in southeast Wisconsin and its three partner health care systems: Advocate-Aurora Hospital, Ascension Hospital, and Froedtert South Hospital. UW-Parkside will be the only public institution to offer this program in southeast Wisconsin and northern Illinois, providing a more cost-effective alternative for developing professional healthcare professionals in the region;
• Heard a presentation by Kate Burns, UW-Green Bay Provost and Vice Chancellor for Academic Affairs, on how the university lives its access mission to serve the local region. She also described the changes the university has made to strengthen student access and success;
• Heard a report from Johannes Britz, Interim Vice President for Academic and Student Affairs including an update on UW System reopening discussions about dual enrollment for high school students; the work of provosts and other stakeholders on a strategic approach to program array management; and the charging of a working group to plan for online program growth.

Audit Committee

The Audit Committee heard an update on UW System’s Enterprise Risk Management (ERM). UW System Administration will be launching a new process called the RCA (Risk, Compliance and Audit) Concept, under which System will create tools, plans, and processes for universities to identify, assess, and mitigate risks as a part of their operations more effectively and consistently.

In 2019, UW System Administration launched an ERM Initiative which was expanded in 2021 to include input from each institution. This process will expand and modify the ERM initiative to create a more consistent, standardized, and streamlined risk assessment and mitigation process.

This process will include the implementation of a new risk assessment tool and plan which UW System and its institutions can use to regularly assess high-level risks and implement necessary mitigation and compliance plans to ensure risks remain at a manageable level.

In other business, the Audit Committee:

• Approved the Office of Internal Audit fiscal year 2023 budget and resource plan, as presented by Chief Audit Executive Lori Storz. Storz reported that Fiscal 2022 was a productive year for the Office of Internal Audit, which completed virtually all of its planned audits as well as more than 10 special projects requested by the Board of Regents and management;
• Heard a summary of audit progress for the Fiscal Year 2023 Audit Plan;
• Heard a summary of audits issued since the June 9, 2022 meeting, which include Information Technology Remote Access – Executive Summary; Office of Internal Audit Annual Report 2022; and Purchasing Cards – Executive Summary;
• Heard a report on closing audit comments, as part of a follow-up process to monitor and identify whether corrective actions have been effectively implemented, or whether senior management has accepted the risk of not taking action;
• Heard an update on Integrity Hotline activity. The hotline was rebranded and a new communication strategy launched in the summer of 2021, with templates of communications materials provided to the universities. For the period Jan. 1, 2021 through June 30, 2021, 57 incidents were reported. As of June 30, 2022, 51 of those incidents have been closed. Twelve of the incidents resulted in corrective action being taken. The Office of Internal Audit has received reports of incidents in each of the risk categories, with most classified as human resources and student matters.
• Heard an overview of proposed changes to Title IX regulations. Chief Compliance Officer Paige Smith updated Regents on the U.S. Department of Education’s recently proposed changes to Title IX of the Education Amendments of 1972 regulations and what steps UW System Administration is taking to response to said proposed changes;
• Heard an update on implementation of the Youth Protection Compliance Policy which was signed by President Thompson in March 2022. Regents received a high-level overview of the progress that has been made and what remains to be done for institutions to fulfill all requirements under the policy;
• Heard a report from Sherry Haakenson, Financial Audit Director at the State of Wisconsin’s Legislative Audit Bureau (LAB), with an overview of the process for the UW System’s FY2022 Annual Financial Report. She discussed timeline, general scope, and answered questions from the committee regarding LAB’s anticipated work;
• Heard the UW-Green Bay Annual Division I athletics report.

Capital Planning and Budget Committee

Alex Roe, Senior Associate Vice President for Capital Planning and Budget, led an in-depth presentation on UW System’s 2023-25 Biennial Capital Budget Request and the 6-Year Capital Plan. The Capital Planning and Budget Committee approved the budget request, which then moved to the full Board for consideration in the afternoon.

In other business, the Capital Planning and Budget Committee:

• Heard a presentation from UW-Green Bay, “Transforming UW-Green Bay through Preserving, Energizing, Revitalizing, and Connecting.”

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Photo Credit: Daniel Moore/UW-Green Bay

See August 19 (day 2) news summary

The UW System Board of Regents will continue its meeting at 8:45 a.m. on August 19, 2022, at UW-Green Bay