Earlier this month, the Office of the Chancellor outlined the impact of the 2025-27 Wisconsin state budget on the Universities of Wisconsin (UWs). Today we are sharing more detailed information as it relates to UWM. Overall, the net result is positive for UWM, and we are appreciative. The budget signed into law provides additional operational and capital funding for vital initiatives like the Health Sciences Renovation and the Engineering & Neuroscience Project. However, significant budget and organizational challenges remain.
Here again are some important takeaways:
- The budget includes a 3% / 2% pay plan with increases effective July 1, 2025, and July 1, 2026. This is contingent upon approval by the Wisconsin Legislature’s Joint Committee on Employment Relations (JCOER) in the fall. Once implemented, raises will be retroactive to July 1, 2025. The state budget provides about 65% of the needed funding for salary increases for employees paid from General Program Revenue (GPR) or state funds. UWM provides the remaining funding for those individuals. UWM must cover the full cost of the salary increase for individuals paid from all other non-state funding sources.
- Funding to address declining enrollment, support general operations and attract faculty in high-demand fields of study was also allocated to the UWs. These allocations are contingent upon development and approval of a new UWs faculty and instructional academic staff (IAS) workload policy to be reviewed and approved by JCOER. Separately, the UWs must also develop a system-wide transfer credit policy, also subject to JCOER approval. As the policies are developed and advanced for approval, more information will become available about approved allocations, timelines for release of funding and spending parameters.
- For UWM and UW-Madison (as R1 institutions), the workload policy requirement sets a minimum teaching load for full-time faculty and IAS of 12 credits per year, with the potential for exceptions under the policy to be developed. UWM will be represented in the UWs policy development process.
- Separate from the state budget process, the UW Board of Regents approved a 5% resident undergraduate tuition increase for 2025-26. It will provide the revenue needed to pay for UWM’s share of the pay plan and faculty retention, for GPR-funded positions and required fringe benefit cost increases.
The budget increase is helpful, but uncertainty at the federal level and in the higher education landscape generally remains as a counteracting factor. UWM as a whole and individual units, with urgency, must address workload requirements and drive operational efficiencies through additional organizational changes, consolidations and use of technology.
As previously shared, schools and colleges currently receiving subvention (subsidization) will be required to transition off campus subvention by FY28.
As part of the move off of subvention, academic units may need to implement focused non-renewals and layoffs to best address their budget circumstances. Non-academic units engaged in planning for balanced budgets over the next five years may also need to take similar actions.
We need to act now to achieve sustainable structural strength, fulfill our mission and continue to be a vital economic and social-mobility engine for Wisconsin in the future. Current times require us to operate differently.
The previously announced 4% reduction in expenditures for FY26 will remain in place. The spending freeze instituted last April has significantly helped UWM’s financial position, but it was intended to be temporary. It is our intent now that, absent a material change in trends, on Sept. 15, 2025, we will lift the campus-wide spending freeze for all units that have met their operating target for FY25 and have implemented actions to achieve a balanced operating result in FY26. We will continue to monitor all developments including enrollment and will provide an update in September when we kick off the FY27 budget planning process.
Questions can be directed to your supervisor, dean or division head.
Sincerely,
Thomas Gibson
Chancellor
Robin Van Harpen
Senior Vice Chancellor for Finance & Administrative Affairs and Chief Business Officer
Andrew Daire
Provost and Vice Chancellor for Academic Affairs