Date: January 16, 2015
To:
Chuck Cornett, Faculty Senate Chair
Joe Sigwarth, Student Senate President
Amy Griswold, Academic Staff Senate Chair
Kurt Tuescher, Classified Staff Senate Chair
From: Dennis J. Shields, Chancellor
Re:
Financial Update and Options for Addressing the Budget Shortfall
Summary
As you know, the University budgets annual revenues and expenditures through several multiyear models and a number of individual accounts. In April 2013 the core financial model (funds
102 and TSI) showed a projected closing balance of $3 million in 2016-17, based on financial
assumptions at that time. Since then a number of factors have changed, leading to the forecast of
a structural imbalance. The current multi-year forecast in the core financial model shows a
structural imbalance between revenues and expenditures of about $5 million annually. In
December, I asked the senior leadership team, the deans of the Colleges, and the chair of the
Faculty Senate to prepare options regarding revenues and expenditures for consideration by the
University community. My charge also included identifying critical areas of need including
faculty compensation. The group has completed its work and I am now requesting feedback
from each Senate on the options developed.
The key factors leading to the change in the forecast closing balance each year are changes in:
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actual and forecast TSI enrollments and TSI tuition,
the tuition freeze of 2013-15 and the projected freeze in 2015-17,
additional discretionary spending included in the forecast,
holding TSI incentive grants at 2014-15 levels in the financial model, and
implementing $3 million in budget reductions each year of 2013-15.
The chart on page 2 shows the core model financial forecast in April 2013, prior to the
announcement of the tuition freeze, and the current January 2015 forecast if no action is taken.
Recommendations
The budget work group identified a number of options related to increasing revenues and
reducing expenditure budgets. It categorized options that were considered as ones the group
recommends we proceed with, ones that are potentially worth doing but need more feedback, and
ones that were considered but are not recommended. In addition, the group identified areas that
require further review over the next year. The set of options reported are available on the Budget
2508 Ullsvik Hall | 608.342.1234 | Fax: 608.342.1270
1 University Plaza | Platteville WI 53818-3099 | www.uwplatt.edu
Office website http://www.uwplatt.edu/budget/budget-reduction-planning with background
material.
The group also identified four important investments. Faculty at UW-Platteville are among the
lowest paid in the UW System and among peers. To begin addressing this, an important
recommended investment is increasing faculty compensation by 2% in 2015-16 and another 2%
in 2016-17. The 2013-14 AAUP Faculty Salary Survey, reported in the Chronicle of Higher
Education, shows faculty salaries at UW-Platteville in the 7th percentile of masters institutions.
Adjusted for inflation, the survey indicates that average salary for a full professor declined from
$87,000 in 1999-00 to $69,000 in 2013-14. See the full survey at
http://chronicle.com/article/2013-14-AAUP-Faculty-Salary/145679?cid=megamenu#id=table.
A second item is transitioning employees from the UW-Platteville Foundation to the University
to ensure that philanthropy is strong going forward. A third action is fully funding the
Chancellor’s Scholarship program. The final item is adding two additional instructional
positions in Mechanical Engineering to support continued growth.
The options identified by the group present some difficult choices. Overall about 70 positions
are impacted by the options considered; increases in TSI tuition and charges to cost recovery
programs are recommended; and restructuring or ending a number of programs is contemplated.
2508 Ullsvik Hall | 608.342.1234 | Fax: 608.342.1270
1 University Plaza | Platteville WI 53818-3099 | www.uwplatt.edu
Let me emphasize that no final decisions have been made regarding the options presented by the
group to reduce expenditures or increase revenues. The input of the governance groups is the
essential next step in this process. On the needed investments, these are items that we have to
proceed with and Vice Chancellor Cramer has included these in the January 2015 forecast shown
in the chart above.
Timeline
For the next six weeks I am asking that you, working with your senate and constituents, provide
feedback on the options identified by the working group, and other recommendations for
consideration. UW-Platteville’s budget submission for 2015-16 is due in early April to UW
System. Therefore I am asking that your feedback and recommendations be submitted on or
before March 2, 2015 to me with a copy to Vice Chancellor Cramer.
Suggestions and questions that are submitted via email to the budget office will be organized and
presented on the website.
I want to thank you in advance for your assistance and guidance on addressing these challenging
issues. By addressing the structural imbalance in 2015-16, the University can move forward in a
more focused way to serve our students, faculty, employees, region, and state.
Additional Information
The complete recommendations are available on the Budget Office’s web site. Additional
information and background materials are available online. The site is
http://www.uwplatt.edu/budget/budget-reduction-planning. The email for providing feedback
and questions is budgetfeedback@uwplatt.edu.
2508 Ullsvik Hall | 608.342.1234 | Fax: 608.342.1270
1 University Plaza | Platteville WI 53818-3099 | www.uwplatt.edu