UW-Madison Will Absorb the Bulk of a State Funding Cut This Year

Thursday, August 24th, 2023 -- 10:00 AM

(By Rich Kremer, Wisconsin Public Radio) The University of Wisconsin Madison will absorb the bulk of a state funding cut this year.

And, according to Rich Kremer with Wisconsin Public Radio, despite the first increase in tuition costs for Wisconsin undergraduates in more than a decade, most other campuses face budget deficits and will pull from reserves.

The first half of a $32 million cut in state aid to UW System schools goes into effect this fall. For UW-Madison, that means a reduction of around $7 million under an annual operating budget approved by the UW Board of Regents on Tuesday.

UW-Milwaukee will see the second largest cut of around $1.9 million in state general purpose revenue.  Still, overall revenues for UW-Madison are projected to increase by $463 million, or just more than 12 percent, over the prior year.

That's due to expected enrollment growth, additional revenue from tuition and student fee increases and transfers of money from donations and federal grants. UW System Vice President for Finance and Administration Sean Nelson highlighted the unique differences between the state's largest university and its 12 other four-year schools.

He told the board tuition and state aid account for around 35 percent of UW-Madison's total budget while it accounts for more than half of all revenues at other schools. In terms of the ability to leverage private donations and federal research grants to fund building projects or student financial aid, the difference is even more stark.

Nelson said philanthropic support and grants account for 33 percent of UW-Madison's overall budget, while the average for all other state schools is around 5 percent. "And it just really speaks to the level of investment you can get from outside, that other campuses really don't have the capacity to do," Nelson said.

Wisconsin universities will see an additional $27 million from undergraduate students from Wisconsin during the 2023-24 fiscal year. It's the first tuition increase approved by Regents since 2012, before state lawmakers froze residential tuition from 2013 to 2021.

Despite the bump in revenues, 10 out of 13 campuses are entering the new fiscal year with structural deficits. Nelson attributed that to declining enrollment, the tuition freeze and a "climate of flat state support."

Republican lawmakers forced universities to pull from tuition reserves during the freeze. Nelson said the overall level of tuition balances at UW schools is expected to hit $204 million by the end of the 2024 fiscal year.

According to UW System data, that's down by more than half since the tuition freeze began in 2013.

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