In defense of the University of Wisconsin System

I hope I get this all out in the right order. There’s a lot to be said regarding the incredible discovery that the University of Wisconsin system has unrestricted funds. The phrase “incredible discovery” is italicized to indicate sarcasm. I am always amazed when we, as taxpayers, allow ourselves to be led by the media to transform our ignorance of government finances into outrage as an “incredible discovery.”

The numbers

The story for this week in political Wisconsin articulates the financial statements of the University of Wisconsin system. Depending on your source (read that as depending on who is trying to spin the news) there is a 1) $1 billion, or 2) $600 million, or 3) $200 million SLUSH FUND the state’s higher education system has set up TO STEAL YOUR MONEY.

Politifact does a good job today in laying out the actual numbers. They also stay away from taking sides. (Gosh. Politifact could use that format all the time if they wanted, don’t you think?)

Except once again, those phrases in all caps were meant to get your attention, not to be accurate. They want your emotions to attach to this issue, not your brain. Remember, the squawkers and media make money when they keep you upset. Also, politicians are betting there are a number of tuition-paying voters to rally. Find a reason to engage them, feed them the right angle, and you have a winning position for your next campaign.

After all, you only have yourself to blame. Those numbers were published in December. See page 56. Here’s the Legislative Audit Bureau report from April 19th that lays out the discovery in more detail.

The politics

Things are slow in Wisconsin. We have a Governor hopscotching the country campaigning for President. We have unresolved court issues. We are finally more than a few months until the next big election. In theory, it’s time for the work to get done.

Except that’s not how we’ve programmed our political system in the last few years. Instead of politics being focused on needs, we’ve let our focus turn to personalities, or the politicians themselves.

A couple of weeks ago one had reason to believe there might finally be a start to unwinding the tangle that’s been made at the Government Accountability Board. But that hearing was cancelled for today. The topic is not one that makes a political career, after all.

Instead, yesterday found lawmakers grilling UW President Kevin Reilly. They wanted to know, in short, how one man could be so evil. (I kind of wish I were kidding here.)

To wit, this comment by 63rd Assembly Representative Robin Vos (R) of Burlington:

(Now’s a good chance to remind you that to stay in tune to almost everything that happens in Madison, all you need to do is read Jessica Arp’s Twitter feed. Best unfiltered reporting around.)

A statement like that comes from a politician who wants to be noticed. We’ll have to go into why the Republicans in Wisconsin are jockeying for position another day.

The harsh reality

You missed it. Those numbers were there all along, but you never noticed. A group of Republican accountants who caucus caught it, but they didn’t get it out until the time was right.

Sadly, the UW System is but one of the government agencies who do exactly this same thing year after year. I could show you where similar money, at a similar percentage to yearly operating expenses, is stashed in the City of Brookfield budget. In fact I’ve tried to do just that in the past. No one cares. It only matters if there is hay to be made of the situation.

One of the more interesting votes I remember on the Brookfield council was increasing the percentage to operating budget that the city could stash. You know what? That percentage was set by the council. And when the year came that the community would be budgeting in excess of that percentage, we took a two minute vote to raise it. (I don’t remember how I voted on that one. I’m sure a certain someone will let you in on it moments after I post.) If you took that 12 or 15 or whatever percentage that the law allows (by the council’s own limit setting) and added to that number the restricted funds for parks and mosquito abatement and deer control, and then the funds reserved for buying new squad cars and fire trucks, I wouldn’t be at all surprised if it comes close to the 25% described in the LAB report.

Where’s the outrage?

Looking to the future

I commend the authors of that report for asking these three questions:

1. What is the appropriate level of UW System appropriation balances?

2. What role, if any, should the Legislature have in determining the appropriate level, and use of, UW System appropriation balances?

3. To what extent should the Board of Regents be permitted to charge current students tuition to fund programs that will benefit future students?

As suggested above, the second question might not matter, as they can always change it. The first is important.

Should we applaud UW for planning ahead for what will certainly be an education bubble bursting soon, or should we ridicule them for taking money they didn’t spend on the student from which it was received?

I’m not sure how to answer that one. As a parent who wrote checks to UW, and as a student there myself graduating UW-Milwaukee in 2005, I can swear to you the system provides one of the better educations available at an incredible value in comparison to other schools. We also have a student at Marquette and one at New York University. This is not an off-the-cuff statement. A lot of outsiders back it up. In fact, so does the legislature as seen in the content of their 2012 financial reports. (They approve that stuff, don’t they?)

From the State of Wisconsin 2012 Fiscal Report, page 12:

University of Wisconsin System: Total GPR expenditures for the UW System decreased by $189.1 million, or 17.2 percent in FY 2012. Tuition at UW institutions, despite annual increases, continues to be a relative bargain in higher education. Resident undergraduate tuition for students at the UW-Madison campus was $70 below the “Big Ten” peer group median, and is the third lowest tuition among those schools. UW-Milwaukee was $735 below its peer group median and all other campuses were approximately $730 below their peer group medians in the 2011-12 academic year.

In addition to low basic tuition, access to college for lower income families was further protected through steady support for the Wisconsin Higher Education Grants (WHEG) program for University of Wisconsin students. Since FY 2003 support for WHEG grants has increased by 183 percent.

That leaves the third question to be answered. Should current students fund future students?

Don’t they already?

If a new dorm is built this year, won’t a student five years from now be using that facility? A gym? A classroom? If a student was willing to pay a set price in return for a degree, a bargain was struck. No one makes you go to college. It’s a free market decision to do so.

It’s like buying toothpaste. If you pick it up and it goes on sale, you have about a week to get an adjustment on the price you paid. After that, you own it.

In conclusion

Of course there is room for oversight when it comes to funding the UW System. Without a doubt, the regents there are all still appointees of a liberal governor whose goals were much different from mine. No, there’s no reason to allow more autonomy in that system. Otherwise another bright group of representatives might want to call our attention to something within the system and have no way to influence an outcome.


Be careful. Base your opinion on this matter from fact, not ratings or subscribers or the next political race. The last thing I want is Governor Scott Walker to be able to claim he cleaned up a mess that never really existed. (You know that will happen.)

You are the master of your own outrage. Use it wisely.

Hey, and if you want to know how to keep college costs down, check this out. I wonder if the Governor has a “flexible degree program” for himself in mind? He’ll need one of those when he runs for President.

(Update – Changed the year I graduated from 2006 to 2005. That’s the problem with growing old…the years all run together.)


  1. Joanne Brown says:

    Well said, Cindy. I only wish that the guys and gals (oops, I almost said goons) in the Wis legislature were as “fairly conservative” about this issue as you are — and that Walker were not so pliable. The reaction of Vos, Ellis, … et al. is exactly what the UW System is trying to protect itself against.

    Is Kooyenga your representative? I know that he and the “CPA caucus” like to take credit for this “discovery” but really, why should they pat themselves so hard on the back for finding information in plain sight? They’ve even gone so far as to claim they have done “forensic accounting.” Anyway, if Dale Kooyenga is your assembly rep., tell him he’s going too far in his self-praise.

    You should try to get this piece published in the Journal-Sentinel. I know, it’s probably too long and complicated, but it would be worth a try.

  2. Yes, Kooyenga is my rep. I’ve emailed to get his take on all this, but there’s been no response.

    I’d appreciate any “forensic accounting” link. I did hear Sykes mention it the other day, but I never take what he says as truth without proof.

  3. James Funk says:

    Yours has been one of the better posts on this matter. I agree that without further information the University system has not done anything to incite such outrage. it seems as if some are trying to make an issue of what seems to be a generally accepted accounting practice.

    As an alum of the University I am disappointed at what has been seemingly a poor response to the heated rhetoric. But I am even more disappointed with the reaction from the legislature. You point out the three questions asked by the authors of the report.which I agree are legitimate. It is typical that some legislators will make politically charged statements and accusations before even initial answers to these questions are provided. The authors even state in their report that they will be providing issue papers during the budget deliberations that will probably attempt to begin to answer those questions or provide more detailed information.

    A quick Internet search will uncover what seems to be general consensus among accountants and auditors that a 25% of operating revenues reserve fund is the recommended size of such a fund. The annual UW financial statement indicates their reserve fund at the time was 25.3%.

    The legislator rhetoric makes me ask an additional series of questions related to why the level of outrage at this time and are the legislators trying to distract the public from other budget issues.

  4. The answer to your last question is politics. They need to incite a riot to jockey for a position of leadership in the upcoming Republican reshuffle.

  5. New NeoCon says:

    The UW system surplus is exactly in line with peer research institutions. So, this “problematic” surplus is really just a cheap shot from the Wisconsin Replubican Representatives.

    (Wasn’t Govenor Scott Walker trying to establish a similar surplus in his last campaign cycle?) He got rid of structural deficits, apparently, but we’re still 45th ranked among states in job creation — even though that’s been his top priority — oops! Let’s not be hypocrites.

  6. Bill Kurtz says:

    Thank you Cindy, for providing a voice of sanity here. It’s obvious that Robin Vos was looking for a pretext to attack the UW system, and Kooyenga et al provided it. The proof came when Robin the Boy Wonder listed three offenses by UW, including the one that really stuck in his craw: Cancelling classes when the President of the United States appeared on campus. Sorry, Robin, that didn’t cause Romney to lose.