February 9, 2005 - BUDGET UPDATE
GOVERNOR RELEASES BUDGET REQUEST
Last night Governor Jim Doyle shared the details of his 2005-07 biennial budget request to a joint session of the legislature. Of interest to UW-Madison, the Governor included the following items in his proposal.
Overview
The Governor’s budget provides an average annual state tax dollar (GPR) increase of 1.27 percent over the biennium, an increase of $49 million Systemwide. It also provides tuition increases of 5.9% in the first year and 5.4% in the second year. However, pay plan considerations have not been included in those increases and the Governor, in his budget message, indicated his willingness to support 7% tuition increases. (The pay plan will be taken up later this spring.) The Governor also directed the UW System to reallocate $65 million over the biennium through administrative cuts ($35 million and 200 FTE over the biennium) and other efficiencies. The reallocated money would be directed to the UW’s cost to continue budget and the new initiatives outlined by the Governor.
Budget Initiatives
The Governor directed that the following budget initiatives, totaling just over $200 million over the biennium, be paid for with a combination of state tax dollars ($49 million), tuition increases ($100.1 million) and reallocation ($65 million).
- $10.6 million for the UW’s AOP and Lawton financial aid program. This increase includes funding both to replace auxiliary reserve revenues that were used to fund the programs in the last budget and funding to increase both programs by the estimated increases in tuition for the next two academic years.
- $13.1 million in 2006-07 to support the addition of 125 new faculty hires. This includes funding specifically to begin implementing the recommendations of the Committee on Baccalaureate Expansion and funding for the UW-Platteville/UW-Rock County engineering initiative.
- $5 million to support supplemental salary increases to faculty who are in high demand by other higher education institutions.
- $3 million to UW-Madison to support Alzheimer’s research.
- $1 million to provide funding for University of Wisconsin domestic partner insurance. His request also includes language that would change state statutes to allow this insurance to be provided.
- $11 million for debt service re-estimates.
- $200,000 for the State Hygiene Lab.
- $164.7 million for standard budget adjustments and utilities (cost-to-continue items).
Budget Cuts for Reallocations
- The Governor directed the UW to reallocate $35 million over the biennium by cutting administrative staff by 200 FTE. UW System must submit a plan for these cuts with the Department of Administration. That plan must be filed and approved by May 30, 2006, or the System’s position creation authority will be suspended.
- The Governor also directed the UW System to reallocate $30 million through “enterprise savings” including restructuring of state procurement contracts and improving asset management.
Financial Aid
In addition to the funding increase for AOP and Lawton Grants (see above), the Governor provided funding to the Higher Educational Aids Board (HEAB) for Wisconsin Higher Education Grants (WHEG) for UW students. $30 million is provided to replace auxiliary reserve revenues that were used to fund the program in the last budget and $17.4 million is provided fund the match for estimated increases in tuition for the next two academic years.
The budget now goes to the legislature for consideration. The budget will first be taken up by the Joint Finance Committee. The Committee will hold statewide public hearings on the bill before voting on the bill, likely in May. The budget will then go to the full legislature for changes and final approval before sending it to the Governor for his signature and vetoes. It is expected that the Governor will receive the budget by early July, as he did two years ago, but recent legislative budget deliberations have continued until fall.
The Governor’s budget in brief is available at http://www.doa.state.wi.us/debf/pdf_files/200507bib.pdf.
The text of the Governor’s budget message is available at http://www.wisgov.state.wi.us/journal_media_detail.asp?prid=946.
For more information on state related issues contact,
Kristi Thorson or Don Nelson
Assistant Directors, State Relations
608/262-8967