Last Updated: October 14, 2015
Additions will be made to this page as the budget process develops and more details are known.
Voluntary Separation Incentive Program
Can and will 128 funds be used to cover a 101 funds deficit?
General Purpose Revenue (GPR) budget cuts can only actually be taken from 101 (GPR) funds. However, in the past, other sources of funds, including segregated fees, have been used to cover gaps created in divisions or departments by shrinking 101 funds. No plan for using 128 funds has been developed at this time for this budget cut. The Budget Task Force will consider the pros and cons of various strategies for managing and allocating the budget cut campus-wide.
How do you respond to the notion that UW-Milwaukee is a large operation with a $700 million budget, and thus a $40 million cut should be manageable?
For background, UW-Milwaukee’s total budget is $704.6 million, which includes financial aid funds that flow to students. The total operating budget is $550 million. If UWM is required to take a $40 million cut over two years, it would amount to an approximately 6% reduction to the operating budget. It is important to note that UWM has absorbed $32 million in total cuts over the past 15 years.
The Chancellor has repeatedly described UW-Milwaukee as an extraordinarily “lean” organization. What does “lean” mean in this context? How is that measured?
In August 2010, the Goldwater Institute published an “Administrative Bloat at American Universities” report that UWM has relied on to say that we are “among the leanest of the top 198 research universities in the US:
- 12th lowest ratio of academic staff per student—3.5 per 100 students vs. national average of 7.0;
- 14th lowest ratio of administrative staff per student—3.6 per 100 students vs. national average of 9.4; and
- 12th least spending per student—$13,000 vs. $41,000 national average.”
For more information about UW-Milwaukee’s use of this information in 2011, please see:
One of the criticisms of the UW System is that we are top-heavy with administration. How does UW-Milwaukee compare to its peers?
UW-Milwaukee’s central administration costs are low compared to its peers. According to 2013 data, the amount spent on day-to-day administrative support as a percentage of total operating expenses at UW-Milwaukee is almost 30% less than our peer average. These support services include general administrative services, legal and fiscal operations, purchasing and printing, employee personnel and records, and information technology. UWM spends 6.4% of all operating expenses on administration compared to 8.8% by its peers.
What is our response to those who believe that UW-Milwaukee has cash reserves that it can use to absorb the proposed cuts?
UWM has $1 million in cash reserves within its $704.6 million total budget, or $550 million operating budget. (The $704 million figure includes federal financial aid funds that flow to students). This small amount of reserves are committed and thus unavailable. In any event, the cash reserves are not adequate to absorb the proposed cuts. To learn more about the cash reserves, please see a full report of fiscal year 2014 balances as found in the Board of Regents meeting materials for October, 2014; see the “Thursday afternoon agenda.” In particular, please see the tab for “Report on Program Revenue Balances – FY 2014” which includes an overview of the Regent policy and methodology that led to this reporting. The tab for “Balance Designation Guidelines” provides the definitions. The tab for UW-Milwaukee provides both an overview and a detailed breakdown of our “unrestricted” balances. Note that when we fold in our restricted funds, UWM’s total fund balance is lower, because of a net negative fund balance in the restricted funds. (This is shown further in Appendix 1.) Please also note that it is misleading to put too much stock into a current snapshot of the UW System balances, because our “cash” ebbs and flows throughout the year especially with the payment of tuition. A year-to-year comparison of balances on June 30 is much more useful.
Are we going to have furlough days? If so, when will we know and how many?
We currently do not know the extent of our budget cut. Our budget planning includes examinations of many options for reductions, including the pros and cons of furloughs. As we do not know the exact budget cut, no decisions about furloughs or the other options have been made, and it is too early to predict the details of how they might be implemented. We are aware that UW System is encouraging each institution to do its own planning because there are unique characteristics for each campus, so we understand that if furloughs are possible, it would be up to UWM to decide how they would be implemented on our campus
What is the proposed cut to UW System?
The proposed cut to UW System is for $300 million over 2015-’17, however, the proposal currently includes a provision for approximately $20M for “costs to continue” to be provided in 2016-’17 on a one-time only basis, and thus, the base cut could be viewed as $320 million. There are some additional costs proposed to be shifted to the Authority that have not yet been quantified, such as costs to continue in FY 2017-’18, municipal PILOT payments (payments in lieu of taxes for municipal services), and pay plan costs.
What will UWM’s portion of the cut be?
The distribution of the cuts is not known at this time. If the cut was distributed to UWM as it has been in the past — by the GPR/Fee base of the institution adjusted for certain expenses — then UWM’s portion of the 2015-’16 cut is projected by UW System to be $20,430,000. For context, UWM’s 2014-’15 GPR (state appropriations) budget is $130,045,457, and thus, a $20.4 million cut is 15.7% of UWM’s GPR budget. Please note that UWM’s total budget for operations is about $550 million, and is composed of GPR, tuition revenue, auxiliary revenues, student segregated fees, federal funding, gifts and grants, and other miscellaneous revenues such as user fees. A Feb. 3, 2015 memo from the Legislative Fiscal Bureau that explains their analysis is available at:
What is the process UW-Milwaukee will use to determine potential cuts?
The chancellor has named Provost Johannes Britz and Vice Chancellor of Finance and Administrative Affairs Robin Van Harpen as co-chairs of a Biennial Budget Planning Task Force that will include members of campus leadership and shared governance groups. This task force will help us determine through an open and transparent process how we respond to the predicted cuts and strategically realign our resources and programs.