Next week, students will begin arriving on campus to launch or continue their academic careers. The success of our students is our highest priority and a moral imperative. A college degree is still a critical pathway to a higher-paying career and, for many, an essential tool in creating generational change for themselves and their families. For UWM to fulfill its mission, we must ensure we are strong and sustainable for years to come.
The university remains significantly underfunded in light of its dual research and access missions. State funding has not kept pace with inflation, leaving us more reliant on enrollment than ever before. At the same time, we’ve seen a decadelong tuition freeze and, like universities nationwide, a significant drop in enrollment.
Yesterday, the Board of Regents approved a budget request that includes a significant increase in operating funds for the Universities of Wisconsin. While we will strongly advocate for the UWs’ proposed budget, similar requests in recent years have not been fully funded. Even if this one is funded, much of the money will likely go to UWs’ priorities, such as student financial support, research and full funding for faculty/staff pay plans. An investment from the UWs will help UWM, but it will not address all of our challenges. We must direct our own resources in ways that directly benefit students and support the groundbreaking research that can change lives.
Changing UWM’s budget model is essential to securing our future
During the 2023-2024 academic year, UWM launched a budget review process as part of the 2030 Strategic Action Plan. The yearlong process included surveys, listening sessions and creation of a Budget Model Review Committee. The committee identified a need for a simpler and more predictable funding formula, along with a desire to see performance rewarded with revenue gains.
Using a three-phase process, the committee developed recommendations and received feedback from a wide array of stakeholders, including college deans, the Academic Planning and Budget Committee, the University Committee, the Academic Staff Committee and divisional finance officers. The recommendations retain many elements from the current model that focus on administrative efficiency and transparency.
The chancellor recently accepted the recommendations, and the updated budget model will be implemented for the 2025-26 fiscal year (FY26). Planning for FY26 starts in September, with implementation beginning July 1, 2025. Colleges will be assisted with these changes during a five-year transition period.
What’s Changing
Funding for Colleges More Closely Tied to Enrollment and Student Outcomes
UWM will modify the current funding formula for colleges to increase the emphasis on student credit hours and recognize majors instead of degrees, allowing for a quicker response to positive enrollment changes. Nonresident tuition, which is higher than resident tuition, will also follow the student, rewarding colleges that invest in recruiting students from out of state. (Eighty-one percent of UWM’s graduates in the past decade have stayed in the state, contributing greatly to its economy.) These changes directly benefit students by directing dollars to the academic areas that most interest them.
The new formula no longer distributes undergraduate student tuition dollars to fund research activity. While we experimented with this in the current model to try to incentivize research, it is not common among universities nationwide and the results have not borne it out. The new model will bring us in line with best practices, and research will continue to be funded with indirect charges and undesignated state funding.
Transitioning Colleges to a Balanced Budget Model
The current process adjusts the budget model formula results on an unlimited basis (referred to as subvention) and with no specific time frame. The new model will halt this process and replace it with a College Strategic Initiatives Fund to help colleges address short-term challenges and make strategic investments that align with institutional and 2030 priorities. Strategic investments made from this fund will not exceed five years.
Over the next five years, colleges will need to realign their operations to match the updated budget model, and Provost Andrew Daire has already begun working closely with each dean to develop five-year plans to address this change.
Greater Flexibility for Colleges and Divisions in Managing Multiyear Budgets
The current budget model requires colleges and divisions to obtain permission to use funds from one fiscal year in the next fiscal year. However, it is not always possible to anticipate the need for spending from balances as much as a year in advance. Beginning in July 2025, colleges and divisions will be allowed to use up to $250,000 in carryforward balances annually without seeking prior approval.
Transparency and Administrative Efficiency
The recommendations retain many of the elements within the current model that focus on administrative efficiency and transparency.
Beyond the Budget Model Changes
UWM is making additional changes to secure the university’s future as part of the 2030 Strategic Priorities. These changes will:
- Strengthen our support for students by improving the student experience.
- Balance UWM’s academic portfolio to better align with student demand.
- Continue UWM’s investment in research.
- Strengthen UWM’s brand and enrollment efforts.
- Optimize faculty workload.
As part of this work, a workgroup will be developed to examine best practices for R1 access universities related to faculty workload. Campus leadership will share more information regarding each of these initiatives throughout the academic year.
Our Path Forward
At UWM, we amplify the remarkable potential that exists in each of our students. But to continue doing this, we must ensure UWM has the resources to educate our students and continue our groundbreaking research.
The chancellor will share more about his vision for a stronger UWM during the Sept. 12 plenary. Additional information about the budget is available in these FAQs and side-by-side comparison chart.