UW System universities projected to be $60 million in debt by end of 2023-24, president says

Financial forecasts released Thursday show all universities except UW-Madison, UW-La Crosse and UW-Stout are projected to have tuition fund balances in the red by summer 2024 due to planned one-time expenses and the cost to continue current operations. Most of the structural deficits hover between just under $3 million to $6.5 million, with UW-Milwaukee being an outlier with a projected $18.8 million deficit.

Projected deficits total $60.1 million across the 10 schools facing shortfalls. Shoring up finances will be difficult without more investment from Legislature, Rothman said.

Universities are spending down their reserves to balance their budgets, which Rothman said is unsustainable in the long run. He didn’t rule out closing campuses in the future, stating the System needs to face “economic reality” while keeping closures as a last resort.

“At the end of the day, you never cut your way to success. You just can’t do that,” Rothman said. “So I remain hopeful that we can find other avenues, while still being good financial stewards and looking at the expense line, and cut where we can, and be efficient about it. But we also need to get that further investment, and lifting us up from being 42nd in the nation (for taxpayer funding). Wisconsin deserves better than that.”

Wisconsin currently ranks in the bottom 20% nationwide in funding for its public four-year universities, a report from the Wisconsin Policy Forum last month said. The System falls below the national average for four-year university funding, with $15,079 per student in comparison to the U.S. average of $17,733.

Wisconsin is also the only state that spends more per full-time student on technical colleges than four-year universities. Ranking seventh in the nation for technical college funding, technical colleges received $17,153 per-student in state, local tax and tuition funding per full-time student, compared to the national average of $11,714.

Support for the System has either stayed relatively flat or decreased by millions in the last decade. In 2021, the Republican-controlled Legislature approved an $8.25 million increase to the System’s budget, despite the System asking for $96 million; in 2019, the System got an additional $58 million, less than half of what it asked for.

While the System asked for a $435.6 million increase in the next budget, Gov. Tony Evers’s budget calls for spending an additional $305.9 million, leaving the door open to future tuition increases. The UW Board of Regents approved a 4.5% base increase in in-state undergraduate tuition in March — the first following a decade of tuition freezes — that will add $38 million to the System’s bottom line but will be eaten up by increases in employee pay.

DEI programs

In the last month, Assembly Speaker Robin Vos, R-Rochester, has threatened to reduce System spending on diversity, equity and inclusion (DEI), claiming such programs sow more division and workers in those positions are “burrowed in like a tick on every single college campus.” The System spends $13.6 million, about 0.2% of its $6.875 billion budget, on DEI offices each year.

Rothman has since announced plans to ban diversity questions from written job applications across the System to in an effort to eliminate “political litmus tests” that may prevent hiring of more conservative faculty. During hearings held in the last two months, Republican lawmakers have bemoaned the perceived lack of conservative faculty on System campuses, equating it to a lack of free speech.

Representatives from the offices of Evers, Vos and Senate Majority Leader Devin LeMahieu, R-Oostburg, did not return requests for comment.

Universities with more expenses than revenue and declining enrollment are in high danger of closure. UW-Platteville at Richland was the System’s first casualty as classes there ceased this month after enrollment this fall dropped to 60.

Elsewhere in the state, Cardinal Stritch University graduated its last class this spring after 85 years due to a projected $6 million structural deficit. Last week, Upper Iowa University announced it was closing six of its Wisconsin regional centers — including ones in Milwaukee, Prairie du Chien and the Racine and Kenosha area — over declining enrollment.