Memo Shows Huge Tuition Surplus at U. of Wisconsin; GOP Legislators Fume

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by Todd Richmond, Associated Press

MADISON, Wis. — Republican lawmakers vowed Friday to freeze University of Wisconsin System tuition, seizing on a new report that shows the system has amassed a huge surplus of tuition dollars by raising prices on students for years.

System President Kevin Reilly fueled the GOP’s anger by releasing a statement ahead of the report, saying he planned to recommend the Board of Regents impose a 2 percent tuition increase in each of the next two years. The statement left Republicans aghast, with the chairman of the Assembly’s colleges and education committee calling for Reilly’s firing and a GOP senator from the Legislature’s powerful finance committee apologizing to students in a statement.

“Come on, pal,” Sen. Glenn Grothman, R-West Bend, told The Associated Press in an interview separate from the statement. “To come back and say we need another 2 percent upper after this?”

The nonpartisan Legislative Fiscal Bureau memo found the system finished the year that ended June 30, 2012, with nearly $650 million in reserve across a number of accounts, including $414.1 million in tuition. The report notes system officials identified specific purposes for about $332 million of the tuition surplus, including technology purchases, financial aid and investing in a new program to give students credit for work experience and other life knowledge. But the system did not provide a timetable for those payouts, the report said.

The report went on to say the system had a $393.3 million tuition surplus as of mid-2011 and a $212.8 million tuition surplus as of mid-2009.

The system built the surpluses as it steadily increased tuition rates, citing dwindling state aid and the need to recruit and retain top-tier faculty with competitive compensation packages.

The Board of Regents has raised base tuition across the system’s four-year schools by 5.5 percent annually since the 2007-08 academic year. The increase has been steeper at schools such as UW-Madison that levy additional charges on top of their base tuition. A year of tuition for a UW-Madison resident undergraduate cost $9,273 this year, up nearly 8 percent from last year and more than 16 percent from the previous year, according to the fiscal bureau.

Assembly Speaker Robin Vos, R-Burlington, along with Senate Majority Leader Scott Fitzgerald, R-Juneau, and the Republican co-chairs of the finance committee issued a joint statement ripping system administrators for raising tuition despite the surplus. They promised to freeze tuition in the upcoming 2013-15 budget and launch an
investigation into system finances.

“It is not only unfair to the students and their parents who keep getting hit with tuition hikes; it’s unfair to the taxpayers of Wisconsin,” the statement said.

Rep. Stephen Nass, R-Whitewater, chairman of the colleges and universities committee and a frequent UW System critic, called for a four-year tuition freeze and demanded the regents fire Reilly.

“President Reilly and the Board of Regents knowingly jacked up tuition … on Wisconsin families over three years even though the funds weren’t needed,” Nass said in a statement. “These actions are nothing short of a betrayal of the public trust.”

The fiscal bureau report mentions that Reilly and the regents are working to create a committee to develop reserve goals and reporting requirements. System spokesman Dave Giroux released a statement Friday evening defending the surpluses.

Giroux said the extra money gives the system a safety net during volatile financial times and the balances are noted in the system’s annual financial reports. He also stressed only about $82 million of the tuition surplus isn’t committed to a specific purpose.

The statement did not address Republicans’ calls for Reilly’s firing or a tuition freeze. It did include a quote from Reilly saying system officials welcome a discussion about appropriate levels of system surpluses “as we manage a complex higher education enterprise in uncertain times.”

Board of Regents President Brent Smith didn’t immediately respond to after-hours messages Friday.

Shortly before the fiscal bureau released the memo, Reilly issued a statement saying Republican Gov. Scott Walker’s 2013-15 executive budget provides the system with enough new money that he planned to recommend the regents limit tuition increases to 2 percent annually in each of the next two years. System officials asked the governor for an additional $37 million in the budget; Walker laid out an additional $181.3 million.

The finance committee is about to start revising Walker’s budget ahead of a full vote in the Legislature. It’s unclear how much committee members will hand the system in light of the report. In his statement apologizing to students, Grothman said lawmakers cannot trust the regents on tuition issues.

“The huge student debt run up by naive young people is a scandal,” he said. “These graduates will not be able to start a family themselves until they’re 50.”

Walker released a statement saying he’ll ask legislators for a two-year freeze during their budget deliberations.

“It is very concerning to learn the UW System has been running a surplus balance of this size, especially at a time when students, families and lawmakers have continually heard from the UW System about the need for more money to offset ‘devastating cuts,’” the statement said.

The United Council of UW Students, a statewide student advocacy group, said the report shows tuition could be lowered.

“Tuition money should be going into the classroom to serve students,” the group’s president, UW-Stevens Point student Geoff Murray, said in a statement, “not going unused in a reserve account.”

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One Response to Memo Shows Huge Tuition Surplus at U. of Wisconsin; GOP Legislators Fume

  1. Absolutely stunning. FIRE THEM ALL. The citizens will thank you.

    Alan
    April 22, 2013 at 8:32 am
    Reply

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