The state’s Legislative Fiscal Bureau released an audit report April 19, which revealed the University of Wisconsin System had a budget reserve fund of over $1 billion. This surplus has sparked some very heated discussions over the past few weeks, mainly due to the fact that tuition rates have been increasing by 5.5 percent each year for the past six years, all while the UW System has been amassing a seemingly large reserve.
But is the surplus really as significant as state politicians have made it out to be?
It turns out it is recommended the UW System hold a reserve of about 25 percent of its operating budget. The $1 billion everyone is up in arms about represents about 17 percent of the operating budget. This doesn’t take into account that some of the money has already been allocated out.
Really what this surplus is about is a public relations nightmare. The UW System could not have handled this situation any worse. The lack of transparency and communication between UW System President Kevin Reilly and state legislators is appalling. This board believes such a conflict could have easily been avoidable had Reilly been upfront.
On the other hand, it is just plain wrong for legislators to exploit this failure of communication. Calling for a tuition freeze does nothing but create an unnecessary strain on an already strained budget. To an entity like the UW System, $1 billion is insignificant in the grand scheme of things and if no new revenue comes in, we can expect to see that reserve shrink quickly. This board looks at this call for a tuition freeze as a political ploy to get students to sympathize with politicians. A freeze on tuition could ultimately be detrimental to the level of education we receive at UW-Madison.
While no student is ever a proponent for higher tuition, this board understands the necessity. Granted we don’t believe tuition needs to go up by 5.5 percent. A small increase in order to maintain budget reserves and still make improvements on campus both aesthetically and academically is a small price to pay. We believe that having a reserve fund is good and could protect us from events like massive cuts from the state. We want our level of education to get better and better, and we understand that raising tuition could help pay for better professors or better resources for students. It is obvious that operating with a surplus makes improving our schools much easier than if the UW System was operating on a deficit.
The bottom line here is that the UW System needs to communicate better. Let us know what the rainy day fund could actually fund. Let us know a surplus exists instead of letting an external audit discover it. Let us know that some portion has already been allocated. Communication in a situation like this is key and somebody in Reilly’s office dropped the ball.
How do you feel about the UW-System surplus? Let us know! Please send all feedback to opinion@dailycardinal.com and visit dailycardinal.com for more details on the surplus.
