MADISON – The University of Wisconsin System Board of Regents unanimously voted in a special meeting Tuesday to approve a $7.53 billion annual operating budget for 2023-24.
Key takeaways of the annual budget presented by Sean Nelson, UW System’s Vice President of Finance and Administration, include:
- State operational funding (GPR/tuition) increase of $174.0 million
- Increase due to resident, non-resident, and differential tuition rate increases at all UW universities, enrollment growth at UW-Madison, and additional GPR dedicated to employee compensation
- The Board previously took action on several components of the annual operating budget at its meeting in March, approving rates for academic tuition, segregated feeds, room and board, and textbook rates for 2023-24
- Costs for a typical resident undergraduate student living on campus, including tuition, segregated fees, and room and board will increase an average of 4.2% for the upcoming academic year. This is the first general tuition increase for resident undergraduates in the UW System in a decade
- Two decisions are still pending that impact the budget:
- The employee pay plan increase is dependent on approval of the Joint Committee on Employee Relations
- UW System has the opportunity to seek $15.9 million in workforce-related supplemental funding in each year of the biennium from the Joint Finance Committee. UW System expects to present its workforce development funding proposal for Board approval at the October meeting.
- See the “2023-24 Operating Budget” in the Board materials, starting on page 21
- See UW System PowerPoint presentation on the “FY23 Year End Review and FY24 Annual Operating Budget”
Introducing the budget presentation, UW System President Jay Rothman said it’s important to consider the context and overall environment.
Ten of the system’s 13 universities are projected to have structural deficits in the current year – situations where recurring expenses exceed revenue, with the shortfall being covered by declining reserves.
This is not sustainable, Rothman said, and chancellors have been charged with undertaking a review of their circumstances and developing, where appropriate, a plan to deal with any budget deficits. Three universities – UW Oshkosh, UW-Parkside, and UW-Platteville – have recently announced steps to address their structural deficits.
Rothman noted that the current financial situation has been 10 years in the making. “The trend lines over that period reflected an ever-increasing reliance on reserves, when reserves were declining at precipitous rates,” he said. “While the influx of COVID dollars masked our financial challenges and extended our runway just a bit, those dollars did not alter our base economic reality.”
Further, the UW System has experienced flat to declining state support over the last decade on an inflation-adjusted basis.
Rothman also pointed to two underlying challenges related to enrollment declines, starting with a declining birth rate which results in lower numbers of high school students. The real culprit in the enrollment dilemma, however, is the declining participation rate, he said. That is, the number of high school graduates in Wisconsin who are pursuing a four-year degree is decreasing.
“While that is a significant challenge for the UW System, it should be a bigger concern for our state as more of our high school graduates who will need to compete in a rapidly evolving, technology-driven knowledge economy will be doing so without the benefit of a university degree,” Rothman said.
“Our focus now has to be on how to move forward from here,” he told Regents.
Rothman said the strategic plan adopted by the Board last December includes a requirement that universities eliminate their structural deficits. The System has also engaged with Deloitte Consulting to assist in the universities’ financial assessments.
“Our goal is to stabilize our universities financially so that they continue their mission to educate students who, as a result of their educational journey, will not only transform their own lives and the lives of their families, but also Wisconsin and the world,” Rothman said.
Rothman emphasized that the budget presented to Regents is directly aligned with the strategic plan.
Nelson told Regents that a comprehensive report on UW System’s fund balances will be presented at the October Board of Regents meeting.
In other business, the Board:
- Ratified the prior approval of UW-Madison’s Collective Bargaining Agreement with the Building and Construction Trades Council of South Central Wisconsin;
- Approved UW-Milwaukee’s Sponsored Research Agreement with Calcigenix, LLC.
The next meeting of the University of Wisconsin System Board of Regents will be October 5-6, 2023, at UW-River Falls