Dear Colleagues,
I hope the beginning of your semester has been fulfilling and invigorating. Today I’m writing to share some financial updates with you.
2023-25 State Operating Budget
In the 2023-25 biennial operating budget, the state legislature approved a 4% increase in UW System (UWS) employee wages for 2023, and another 2% for 2024. The pay plan awaits final approval by the Joint Committee on EmploymentRelations (JCOER). JCOER has not yet scheduled its meeting to consider that final approval; we will provide updates as soon as we have them. As always, UWM will need to self-fund part of the compensation increases, and I share more details on that below.
In addition, the state legislature reduced UWS’ budget by approximately $16 million in base (annual) funding, which resulted in a $2.1 million base (annual) reduction to UWM’s operating budget for 2023-24.
For the first time in 10 years, UWS raised undergraduate resident tuition rates by 4.5%. That increase, along with a 2.5% increase on non-resident undergraduate tuition rates, will largely cover UWM’s share of the 2023-24 pay plan costs for General Purpose Revenue (GPR)-funded positions, as well as UWM’s $2.1 million share of the UWS operating budget cut noted above. Positions that are funded by non-GPR funding sources (such as 131 tuition and auxiliary-funded positions) also participate in the pay plan increases; however, UWM does not receive any state support for these increases and must address the rising costs through revenue growth or expense reductions.
2024-25 Budget Planning Process
Every September, we start planning UWM’s budget for the upcoming fiscal year. Deans and division heads across UWM lead that process for their respective colleges and divisions. For the 2024-25 process, units have received a preliminary, aggregate expense reduction target of 3.5%. A reduction in this range is likely necessary because the tuition increase will not address non-GPR position pay plan costs, UWM’s current year (modest) operating deficit, and other anticipated increased costs or other revenue declines.
I know these cuts are difficult on top of the continued budget reductions over the past several years. The 3.5% aggregate reduction target is preliminary and will be adjusted in several months, once a formal revenue projection is completed. Divisional budget allocations or reductions will be made on an individualized basis and may vary from the aggregate reduction, after the budget process is completed. Given the challenges associated with multiple years of cuts, some units may begin to look at layoffs as a possibility in order to manage budgets.
As we work through our budget planning, please know we continue to examine opportunities for investment in UWM’s future. Last week’s announcement of the Milwaukee Tuition Promise, which will provide up to four years of tuition and segregated fees for students whose families earn less than $62,000 per year is an example. Enabled by the generosity of donors and private funding sources, the Promise program aims to enroll and retain students, which is the foundation of our largest source of revenue.
I cannot emphasize enough the importance of student success in all that we do. Not only is it our moral imperative to improve our retention and graduation rates, but success in this area also will have a direct and significant impact on our revenue base. In other words, each percentage increase in retention and graduation rates also increases our enrollment and tuition revenue. We must all work together to improve in this area.
Capital Budget
Our Milwaukee campus is experiencing significant physical improvements as a result of capital project approvals granted in prior biennia. In July, we celebrated the grand opening of the Orthopaedic Hospital of Wisconsin (OHOW) Center, an addition to the Klotsche Center and Pavilion that benefits all students through expanded athletics and recreation. The two-year process to partially renovate theUWM Student Union is nearing completion this fall. Please stop by to see the enhanced student spaces for studying and relaxing, increased natural light and open sight lines, and more. In summer 2024, we look forward to opening our new Chemistry/STEM building, which will feature over 160,000 square feet in four stories for STEM learning and research. This webcam offers an up-to-date view of the construction.
We continue to advocate for the next round of construction projects, which includes the completion of the Health Sciences renovation in the Northwest Quad, renovations to our existing Engineering and Mathematical Sciences building, and a new Engineering and Neuroscience building in the Southwest Quad.
We have many things to celebrate, and challenges that we aim to convert into opportunities. I value your contributions and look forward to our continued work together to advance UWM.
Best regards,
Mark A. Mone, PhD
Chancellor