2011-13 Biennial Budget Update
Robert Cramer -Assistant Chancellor
July 5, 2011
1
Background - Funding Sources
• General Purpose Revenue (GPR) – includes general funding,
specific purpose funding, and earmarked funding from the
state, primarily from state sales and income taxes
• Program Revenue (PR) – includes tuition, auxiliaries, and
segregated fees, as revenues received for services or from
users
• Federal Revenue (PR-F) – includes federal grants, financial aid,
direct loans, as revenues from a federal agency
• Segregated Funds (SEG) – includes transportation fund and
other separate state accounts, credited by law to a specific
state fund
• Gifts and Grants – includes revenues from the Foundation,
2
non federal grants
UW-Platteville 2010-11 All Funds
Budget - $148.9 Million
Auxiliary Enterprises
32,270,250
22%
Extension
560,106
0%
General Purpose Tax Dollars
18,402,962
12%
Specific Purpose Tax Dollars
11,435,118
8%
Gifts and Grants
1,216,604
1%
Tuition
43,852,004
29%
Federal
41,191,310
28%
General Purpose Tax Dollars
Specific Purpose Tax Dollars
Tuition
Federal
Gifts and Grants
Auxiliary Enterprises
Extension
3
UW-Platteville 2011-12 All
Funds Budget – $158.6 Million
Extension
591,846
0%
Auxiliary Enterprises
32,967,057
21%
General Purpose Tax
Dollars
16,595,483
10%
Specific Purpose Tax
Dollars
10,985,487
7%
Gifts and Grants
1,216,604
1%
Tuition
47,078,879
30%
Federal
49,155,710
31%
Based on UWS allocations of July 1, 2011 – subject to change
General Purpose Tax Dollars
Specific Purpose Tax Dollars
Tuition
Federal
Gifts and Grants
Auxiliary Enterprises
Extension
4
Funding Impacts
• GPR Cuts – $250 million total, $125 million
per year
– $3.5 million estimated annual GPR reduction for
UW-Platteville’s share (7.1%)
– $2.4 million reduction for UW System (25% of UW
System GPR) – September 1, 2011 report deadline
– 51.17 FTE position reduction for UW System
– UW Madison reduction of $47.2 million rather
than $62.5 million
5
Funding Impacts - Tuition
• Tuition –
– Budget bill limits resident undergraduate tuition
increases to 5.5% in 2011-12 and 2012-13
– UW-Platteville increase is between $1 million and
$1.2 million each year
– Differential tuitions approved prior to June 1,
2011, would be exempt from this limit.
– Delete current law language limiting increases in
resident undergraduate tuition.
6
Funding Impacts – Other Items
• Provides $61.7 million GPR annually for cost to
continue items including restoration of
furlough funding, past pay plans, and other
costs
• Cut $47.4 million GPR annually to reflect
increase state employee contributions for
health insurance and retirement benefits
7
Bottom Line – Estimated
Funding Impacts
estimate
FY2010-11
FY2011-12
Change
General Purpose Tax Dollars
$18,402,962
$16,595,483
($1,807,479)
Specific Purpose Tax Dollars
$11,435,118
$10,985,487
($449,631)
Tuition
$43,852,004
$47,078,879
$3,226,875
Federal
$41,191,310
$49,155,710
$7,964,400
$1,216,604
$1,216,604
$0
$32,270,250
$32,967,057
$696,807
$560,106
$591,846
$31,740
$148,928,354
$158,591,066
$9,662,712
Gifts and Grants
Auxiliary Enterprises
Other
Based on UWS allocations of July 1, 2011 – subject to change
8
Funding Impacts Compensation
• Retirement Contribution 5.8% (50% of total)
– The required state and local employee retirement
contributions are pre-tax income for purposes of
federal and state income taxes, but not for federal
employment (FICA) taxes.
• Health Insurance Contribution 12.6% (up from
6%)
9
State Employee Monthly
Contribution Rates
2011
Prior Law
AB 10
Change
Single
Family
Single
Family
Single
Family
Tier 1
$36
$89
$84
$208
$48
$119
Tier 2
$79
$198
$122
$307
$43
$109
Tier 3
$188
$471
$226
$567
$38
$96
10
Additional Compensation
Information
• Detailed information is available at:
http://www.wisconsin.edu/hr/benefits/repairbillfaq.pdf
• Wisconsin Act 10 (budget repair bill), as amended by Wisconsin Act 32
(2011-13 biennial budget bill), makes statutory changes to several benefit
provisions to the Wisconsin Retirement System (WRS) and State Group
Health Insurance. Act 10 was effective on June 29, the day following
publication by the Secretary of State.
• Health insurance premiums for employees covered by the Graduate
Assistant/Short-Term Academic health insurance will increase to half of
the premium listed above.
11
Additional Compensation
Information
• Employees paid on a biweekly basis will have the
new premiums taken from the paycheck dated
8/25/2011
• Employees paid on a monthly basis will have the new
premiums taken from the paycheck dated 9/1/2011
• Academic year employees, who had multiple health
insurance deductions taken from the June 1 check,
will have an adjustment made to reflect the amount
that should have been paid for the payroll month of
August (September coverage).
12
Additional Compensation
Information
• The law prohibits the employer from picking up the employee-required
WRS pension contributions on behalf of the employee.
• All UWS employees, with the exception of those who are in the executive
retirement category, will pay 5.8% of earnings for the remainder of
calendar 2011 (Executives will pay 6.65%).
• The employee required contributions will begin with the same paycheck
as the new health insurance premiums, noted above.
• The pension contributions will be taken on a “pre-tax” basis; not subject
to state and federal tax withholding.
• Changes the multiplier for calculating a formula benefit for the executive
retirement category from 2.0% to 1.6% for service earned prospectively.
13
Additional Compensation
Information
• Wisconsin Act 32 (2011-13 biennial budget bill) also makes
several changes to benefit provisions under the WRS. The Act
will be effective on July 1, 2011, unless otherwise noted.
• Eligibility for participation in the WRS will change from a 1/3
of full time to 2/3 of full time for those initially hired on or
after the effective date of the law. At this time we are unsure
how the new provisions will be applied and are waiting for
additional clarification.
• New WRS participants, those hired on or after the effective
date of this provision, will be subject to a five year vesting
provision.
14
Additional Compensation Items
• DOA shall ensure that all state agency
expenditures for state operations exceeding
$100, including salaries and fringe benefits
paid to state agency employees, are available
for inspection on a searchable Internet Web
site maintained by the department.
15
New Flexibilities- GPR
• GPR Block Grants - only two GPR
appropriations for the UW System, one GPR
“block grant” to fund general program
operations and one GPR debt service
appropriation.
• Specify that the Board of Regents would
allocate GPR general program operations
funding to UW System institutions in the form
of block grants.
16
New Flexibilities - PR
• Create five program revenue appropriations
under the UW System: one for general
program operations, one for debt service, one
for gifts and grants, one for funds transferred
from other state agencies, and one for interest
earnings.
• Specify that the UW System would be able to
retain the interest earned related to its
program revenues.
17
New Flexibilities – Block Grants
• Still working to understand the implications
and opportunities
• Utilities are one example - $3.6 million GPR for
2011-12 – UW-Platteville should keep any
savings – at risk for spending over this
• Allocations and tracking of funds being
worked on by controllers and UWS
18
New Flexibilities Compensation
• Authorize the Board of Regents to provide
supplemental pay plans for UW System employees,
excluding UW-Madison employees during the 201113 biennium.
• Authorize UW-Madison to provide supplemental pay
plans UW-Madison employees during the 2011-13
biennium.
• Supplemental pay plans would be in addition to
compensation plans approved for such employees by
the Joint Committee on Employee Relations (JCOER).
19
New Flexibilities – Personnel
System
• Authorize the BOR to establish a personnel system
for all UW employees excluding UW-Madison
• Authorize UW-Madison to establish a personnel
system for UW-Madison employees.
• Specify that these personnel systems would include a
civil service system and grievance process. Both the
UW-Madison personnel system and UW System
personnel system must be approved by JCOER.
20
New Flexibilities – Collective
Bargaining
• Effective July 1, 2013, create bargaining units
under Chapter 111 of the statutes for UW
System employees other than UW-Madison
employees and for UW-Madison employees.
• These collective bargaining units would mirror
existing statewide collective bargaining units.
• Partial veto removed Wisconsin Employment
Relations Commission from reviewing these.
21
New Flexibilities - Travel
Travel by Employees
• Provide that, beginning on July 1, 2013, the
Board of Regents would establish travel
policies for UW employees and establish a
schedule for reimbursement of UW
employees for travel expenses.
22
New Flexibilities – Capital
Projects
• Provide that UW System projects with costs of
less than $500,000 and funded entirely with
gifts and grants would not require approval by
the Building Commission. These projects
would be exempt from DOA supervision and
oversight, exempt from current law provisions
regarding bidding, and would not be subject
to the 4% fee charged by the Division of State
Facilities.
23
New Flexibilities - Purchasing
• Require DOA to delegate to the Board of
Regents and to UW-Madison the authority to
enter into contracts for materials, supplies,
equipment, or services that relate to higher
education and that agencies other than the
UW System do not commonly purchase.
24
New Flexibilities - Purchasing
• Increase the threshold for lowest responsible
bids, sealed bids and sealed proposals from
$25,000 to $50,000 for state agencies (partial
veto expanded this from UW System)
• Eliminate uniform cost-benefit analyses for
contractual services
25
New Flexibilities – Overload
Payments
• Dual Employment - Modify current law to
permit UW full-time employees to receive
more than $12,000 in compensation for work
performed in addition to the employee’s
normal duties at the UW institution where the
employee is assigned, another UW institution,
or the UW-Extension.
26
New Flexibilities - Gifts
• Gifts of Vehicles - Authorize the Board of
Regents to accept gifts of vehicles.
• Gifts of Real Property - Authorize the Board of
Regents to accept gifts of real property up to
$150,000 in total value without prior approval
of the Building Commission.
27
Accountability Reporting
• Accountability Reports:
– (a)Performance: graduation rate, total number of
graduates, time to graduation, credits-to-degree,
retention rates, placement of graduates, and the
percentage of resident and non-residents who live
in Wisconsin within ten years of graduation.
– (b)Financial: financial reports from each
institution and each UW Colleges campus using
GAAP reporting standards.
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Accountability Reporting
– (c) Access and affordability: the profile of enrolled
students, including mean per capita family
income, percentage of resident and nonresident
students who are low-income, percentage of
resident and nonresident students who are
members of minority groups, transfers from other
UW System and in-state institutions, published
cost and actual cost to Wisconsin residents once
financial aid is subtracted, and increases in
available institutional financial aid for students
with demonstrated need;
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Accountability Reporting
– (d)Undergraduate education: the extent of access to
required courses and to popular majors, majors offered,
improvements in overall student experience, efforts to
close the achievement gap between majority and
underrepresented minority students, and post-graduation
success;
– (e) Graduate and professional education: number of
graduate degrees awarded, number of professional
graduates in key areas including physicians, nurses,
business, engineers, pharmacists; veterinarians, and
lawyers, and incentives provided for staying in Wisconsin
after graduation;
30
Accountability Reporting
– (f) Faculty: the profile of faculty, including faculty
teaching loads, success or failure in recruiting and
retaining scholars and teachers who are rated at
the top of their fields;
31
Accountability Reporting
• (g) Economic Development: the amount and source of
research funding and other new revenue brought into the
state, the number of government contracts received, the
number of research projects in progress or completed, the
number of patents and licenses UW-Madison and UW System
inventions, the number of new businesses created or spun off,
the number of secondary businesses affiliated with the UW or
UW-sponsored research projects, support provided to existing
industries throughout the state, job growth from support to
existing industries and new businesses, the number of jobs
created in campus areas, the number of jobs created
statewide, a comparison of economic indicators for campus
areas and non-campus areas;
32
Accountability Reporting
• -(h) Collaboration: partnerships and
collaborative relationships with UW System
Administration and UW institutions.
33
Special Task Force on UW
Restructuring and Flexibilities
• 17 persons
– Assembly Speaker and Senate Majority leader
each appoints six members (a) three business or
public leaders; (b) two current or former UW
chancellors or members of the Board of Regents;
and (c) one member of the Legislature
– Assembly and Senate Minority leaders each
appoint one member of the Legislature
– Governor appoints two members
– Joint Finance Chairs jointly appoint chairperson
34
Task Force is to Address:
(1) whether there is a need to restructure the UW System and, if so, make recommendations as
to a new governance structure
(2) how UW-Madison employees and all other UW System employees would transition from the
state personnel system to the new personnel systems
(3) whether tuition flexibility can be extended to the UW System while ensuring access and
affordability and what role the Legislature should have in establishing tuition rates
(4) how compensation plans for UW System employees should be determined in future biennia
(5) additional operational flexibilities that could be provided to UW System institutions; and (6)
how articulation and the transfer of credits between UW institutions could be improved.
Specify that the task force would submit a report to the appropriate Senate and Assembly
standing committees as determined by the Speaker of the Assembly and Senate Majority Leader,
and the Joint Committee on Finance no later than January 1, 2012. Provide $50,000 GPR in
2011-12 for expenses related to the task force in a new appropriation under miscellaneous
appropriations.
35
BOR Requests Not Approved
• Growth Agenda
• Financial Aid
• Recruitment and
Retention
• OSER and DOA
Procurement
Chargebacks
• Tuition Increase Grants
• Restoration of 2% Pay
Plan
• UW Madison
Intercollegiate Athletics
• Expanded Tuition
Authority
36
Financial Aid
• No additional funding for WHEG and elimination of
statutory link to increase appropriations with tuition
• Funding is provided for Wisconsin Covenant Scholars
in 2011-12 and 2012-13
• HEAB administers the Wisconsin Covenant Scholars
• Enrollment in the Covenant Scholars will cease after
September 30, 2011
• Re-estimate MN – WI reciprocity funding
37
Financial Aid
• WI GI Bill is extended to UW-Madison Authority
• $6.5 GPR million is provided for the WI GI Bill
• Lawton Minority Retention Grants – suspend the
formula that increases grants by the same
percentage as tuition in 2011-13.
• No Increases for Lawton, Advanced Opportunity
Program, Tuition Increase Grant, Study Abroad or
Student Aid.
• Limit Tuition Increase Grant to students enrolled in
2010-11.
38
Broadband Grants
• Federal Broadband Grant - Specify that UWExtension could not commit any funds to
facilities under this project to which such
funds were not committed prior to June 15,
2011, unless approved by the Joint Committee
on Finance
• Require the Legislative Audit Bureau to
prepare a financial and program audit of the
use of broadband services by the Board of
Regents by January 1, 2013.
39
WiscNet and
Telecommunications
• Prohibit the Board of Regents, UW
Institutions, and UW Extension from being a
member of a group that provides
telecommunications services to the general
public or to other public and private entities
effective July 1, 2013
• Exempt certain entities related to research
activities.
• Partial veto removed the ability of Joint
Finance to delay the July 2013 date.
40
Other Items
• Liability Protections for Scientific Researchers
– Create the following exemptions to current law
provisions prohibiting crimes against animals:
– (a) teaching, research, or experimentation
conducted pursuant to a protocol or procedure
approved by an educational or research
institution, and related incidental animal care
activities, at facilities that are regulated under
federal law; and (b) bona fide scientific research
involving species unregulated by federal law.
41
Other Items
• Undocumented Persons – eliminate nonresident
tuition and fee exemptions
• Reports – eliminate required annual reports on
excess expenditures
• Sale of Land – if the board sells any real property, the
board shall retain the net proceeds
42
Other Items
Position Reports - Provide that UW System
employees, including UW-Madison
employees, would remain state employees
but would not be counted in state position
reports beginning July 1, 2013. Require the
Board of Regents to continue to submit
quarterly position reports to DOA and the
Legislative Fiscal Bureau.
43
Veterans Benefits
• Clarify legislative intent by specifying that: (a) the Board of
Regents and the technical colleges could continue to receive
payments under the federal Post-9/11 G.I. Bill;
• (b) credits or semesters for which the amount paid under the
Post-9/11 G.I. Bill covered 100% of resident tuition and fees
would not be counted against the 128 credit or eight semester
limit; and
• (c) in the case that the amount paid under the Post-9/11 G.I.
Bill covered less than 100% of resident tuition and fees, the
proportion of tuition and fees that were remitted by the
institution would be counted against the 128 credit or 8
semester limit
44
Other Items
• Delete $1,000,000 GPR annually related to the
WiSys Technology Foundation grant program
and $1,900,000 PR annually related to tuition
increase grants.
45
Other Items
Normal School Fund Distribution:
• Provide that any income or interest earned by
the normal school fund in excess of the
amount appropriated under current law
would be distributed to UW-Stevens Point for
environmental programs. Estimate the
amounts distributed to UW-Stevens Point at
$100,000 annually.
46
References / Useful Sites
• UW System
http://www.wisconsin.edu/hr/benefits/repairbillhealth.pdf
http://www.uwsa.edu/govrel/
• Department of Administration http://doa.wi.gov/index.asp?locid=166
• Wisconsin Legislature - http://legis.wisconsin.gov/
• Joint Committee on Finance http://legis.wisconsin.gov/lfb/jfc.html
• Legislative Fiscal Bureau http://legis.wisconsin.gov/lfb/index.html
• Wheeler Report - http://www.thewheelerreport.com/
• Wispolitics - http://www.wispolitics.com/
47