Provost Britz joined us and reported on the Board of Regents meeting last week. Points of discussion during the Regents meeting included more accountability. We also discussed budget concerns and the successive cuts and the tuition freezes that have resulted in a projected deficit of approximately $30 million for the 2016 fiscal year for UWM. Low faculty salaries, TA non-competitiveness, and infrastructure issues remain a concern. We discussed how some of these issues are longer term and could have been addressed in previous years when there were not budget shortfalls.
Robin Van Harpen and Jerry Tarrer joined us to discuss the new budget model. We discussed the underlying issues of disincentives for research and cooperation for course delivery. The university is largely driven by student credit hour revenues, however, other activities that do not bring in as much revenue are critical to the university mission. The largest source of revenue at UWM ($224 million) is tuition. The campus also gets about $116 million in state tax revenue, but all but $16 million of that now is earmarked for specific purposes, for example, debt service, minority and disadvantage scholarships, or fringe benefits. There is no longer enough state tax revenue to support non revenue generating units, e.g., the library or UITS, but obviously they are critical to everyone’s work. The new budget model addresses this problem by allocating 20% of the tuition revenue to non-revenue or low revenue generating activities through the creation of a “subvention fund.” A long conversation ensued about the amount needed in the subvention fund. It is estimated that an amount closer to 40% of tuition revenues may be needed to fund academic support and administrative activities on campus. There has been no decision yet of the governance mechanisms for distributing moneys from the subvention fund. Such mechanisms will be needed so units can do long range planning (5 years) and have incentives to grow reputation and revenues within their area (improve graduate programs, grow research, add courses). We agreed to revisit these issues in the weeks ahead.