From the Chancellor: UW System Budget Allocations

July 6, 2015

Dear Faculty and Staff,

There have been many developments recently with respect to the proposed biennial budget and how it will impact our campus. Today, the UW System (UWS) released the funding reduction distribution breakdown for institutions, including UWM.

The cut to UWM’s true operating base budget is proposed to be $12.2 million in FY16, increasing to $18 million in FY17 and thereafter.

The reduction in UWM’s anticipated budget cut is the result of the Joint Finance Committee’s action last month to restore $25 million to the UW System portion of the state budget and the use of one-time budget relief funds from UW System.

Please keep in mind that the proposed funding reductions will not be considered final until a number of steps in the process are completed:

  • UWS Board of Regents meeting and vote on July 9
  • Wisconsin State Assembly and Senate agree on a biennial budget and forward to Governor Walker for his signature
  • Governor Walker signs the 2015-17 budget into law

With those caveats, here is a summary of the one-time $25 million reduction in the General Purpose Revenue base budget cut for UWM.

UWM’s Share of $150 Million Base Reduction (13.6%): $20,430,000
Additional Reduction for Unfunded Costs (Updated): $2,121,000
Total Cut without Restored $25 million $22,551,000
UWM’s Share of Restored $25 million (18%) ($4,508,800)
   
UWM’s Total Annual Base Cut with Restored $25 million $18,042,200
UWM’s Share of UW System $20 million in One-Time Funds (29%) $5,825,100
UWM’s Reduced Cut for FY15-16 Only $12,217,100

What does all of this mean? First, this is the largest budget cut we will face in UWM’s history. If we look for a silver lining it is that UWM will get some relief in the form of the proposed portion of $25 million in restored funds; the amount restored to UWM is the largest of any institution. There were several criteria that the UW System examined when determining the amounts to restore to campuses, including:

  • Each campus’ unique circumstances and impact
  • Pell grant recipient enrollments
  • Economy-of-scale challenges
  • Institutional compensation gaps

Here is a chart that shows the UWS reductions to all campuses:budget_150706

We are committed to managing the ongoing base cut of $18 million in the most responsible ways possible. As a campus, we are handling this in two stages: first, with one-time cuts for the 2015-16 academic year. The second stage, which will follow a different process, will tackle the permanent cuts we face. The Budget Planning Task Force meets for two half-days on July 10 and 14 to further its work as we all await the finalization of the state biennial budget.

(Some news reports earlier today focused on UWM’s net reduction in the base operating budget, reported by UW System to be $31.9 million. That number was based on anticipated revenues from all sources, not just state aid, and includes a technical correction UWM made to its anticipated federal financial aid budget in the amount of $18 million. While the $18 million correction accounts for over half of the anticipated reduction in the operating base budget, it has no impact on UWM’s actual revenues for operating purposes.)

Please hold July 16 from 1 – 2 p.m. for our next campus budget meeting. We will have more detailed information to share at this meeting if the budget is signed into law prior to July 16. Please check the UWM State Budget Information web site for the latest information.

Many of you have been hard at work this past spring and summer to address the pending cuts and you have my sincerest thanks. Together, we will get through this. We will not be the same UWM that we have been. This is not to say that we will be an impoverished or lesser institution. Rather, we are taking a very deliberate approach to reformulating a UWM of strength.

Best regards,
Mark A. Mone
Chancellor

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