Summary: UW System President Ray Cross, Town Hall Forums, March 24, 2015

Town hall meeting with UW System President Ray Cross

Below is a condensed summary of UW System President Ray Cross’s comments in town hall meetings at UW-Green Bay, March 24, 2015. For full audio (except for the opening five minutes at the student town hall forum; not recorded due to technical difficulties) please refer to audio files available on Chancellor Miller’s blog:


Plans to protect us and specifically minority students.
If chapter 36 is removed as proposed in the Governor’s budget it would eliminate two minority programs: Don’t worry about that, those will be continued by the UW System.

Reducing budget cuts.
We are working hard to reduce the cuts. The good thing is that there is a lot of sympathy in the legislature to do that. How much the cuts will be reduced will depend on the projected excess for the biennium that will be disclosed at the end of April or beginning of May. If $100 million of new revenue is projected, they might reduce the cut by $25 million. K-12 will be the first piece of it, but we are trying hard to stay second in line. If the surplus goes to $200 million we might reduce the cut by $75 million. If it goes to $300 or $400 million, which would be very unusual, we could get a sizable reduction in the $300 million cut. We are working hard on this.

There are some things that the legislature could delay — a manufacturing tax rebate, Medicaid money of $350 million (the Gov. said absolutely not.) I don’t think there is a chance of either of those happening. But, there’s $85 million here, $35 million, here, $10 million there that we’ve pointed out as politely as we could. Each campus is working on its own plans on how to cut. They are working on worst-case scenarios — the $300 million, which is proposed in the budget right now. The system is exploring, how do we apportion the cuts? What we’ve told to the campuses at this juncture is give them the percentages they would normally take. Which we don’t think is right. It impacts some campuses much more than others and we have to figure out how to deal with that, but we haven’t gotten to that yet.

On death of public authority and Regents’ counter.
I don’t think Public Authority is dead, I think it’s horribly misunderstood, but that’s in some ways our fault. In some ways the Governor hasn’t helped us, he conflated public authority with the elimination of shared governance and tenure. They are all totally separate. But it doesn’t matter, if they get conflated when he makes remarks about faculty workload. Public Authority by itself is a simple thing. There are six main categories or flexibilities that we are seeking. All the public authority concept does is it takes those six from budget, to tuition, to financial management, to procurement, to capital revenue bonding, to HR. It slides them into a symbolic box, called the public authority. And all that is, is a contract with the state to exempt us from state agency requirements in each of those categories. It’s not a complex thing. It’s actually only a two-year contract because you can’t commit future legislators to this. It’s totally misunderstood.

It does have a couple of negatives. If you are part of the state right now and you are going to be sued, you are exempt from being sued if you are a state agency. If you become a public authority, you can be sued. If the public authority is sufficiently separated form the state and it is not perceived in the court to be integrated enough to be a part of the state. That’s called Sovereign Immunity. We just got a ruling from the Department of Justice last Friday that said No, you will not be eligible for Sovereign Immunity, so now we have to pick up those costs. We had calculated those all along in our expenses but that carries with it other questions about what we need for legal staff and what are we going to do here. The Governor’s response was, we are going to do what it takes to get you sufficiently covered under Sovereign Immunity; we wouldn’t want this to cost you any more money. There are pieces that are questionable here on the structure of Public Authority. The simple message here is that Public Authority really is helpful because it puts these flexibilities into this symbolic box.

We are also looking at how to get those flexibilities without a public authority. Is it possible to do that? Absolutely, it’s very possible to do that. The question then is do you get that one at a time, piecemeal or do you get it as part of the package. I think there are a number of legislators that would like to keep this as a state agency because it gives them the feeling that they can control it more. They are fearful that we are going to be inappropriate; we are going to raise tuition wildly. The reality is that if you adopt a public authority, as part of that there is a dedicated funding system that is phenomenally attractive to the University. In part because it gives you a predictable, stable, level of GPR in the future. That in and of itself stabilizes tuition. So, I should be able to tell you what your tuition will be five, six, seven years from now.

Having said that, I should talk more about that dedicated funding system. If you look at the University’s history of funding, 1998-1999, 15 years ago, the University received for operating money, $799 million, from the state. That doesn’t include debt service or tuition. Today, right now $793 million; 15 years later, we are getting $6.5 million less of GPR than we were getting in 1998-99. The state is lowering its commitment to us. Almost all of the differences have been, made up of tuition increases. If you follow the GPR line, it goes down, tuition goes up. Tuition stays flat, GPR goes up, tuition goes up GPR goes down. There is an inverse correlation between state aid and tuition. So when you stabilize GPR going forward, you stabilize tuition.

Tuition shouldn’t be a political process.
I don’t believe tuition increases should be a political process, I believe it should be a rational process that includes what is the cost of offering the program? What is the market for this? What are our competitors doing? What is the need of the state? If the state has a really big need in that area, maybe we reduce that tuition in order to encourage students to go into that field, and finally affordability. Those four factors have to play into the rational process. So when the legislature intervenes, and says we are going to put a cap on that, we are not going to let you raise tuition, that’s an arbitrary number, it’s not connected to cost. We have to be careful that we don’t do the same thing internally. We have to sit down and analyze the value of the product or the service is not a mystery. It’s being done all over the world; private colleges do it all the time. How do we do it openly, honestly and fairly? I think that is a really important process. How you set tuition means a lot, you can’t just make it up. That’s a mistake the legislature makes, they convert it into a political issue.

Is UW-Madison going to separate from the rest of the schools in the UW System?
Not going to happen. It was proposed 3-4 years ago, but now they took that off the table…

When can we expect to hear about cuts in programs?
That will come from the campuses mostly. We are making cuts to the system administration in three phases — middle of April, July, and November.

Student: What kinds of safeguards are being put in place for the campuses that are getting rid of entire programs? How will these affect students who have already chosen a major and their graduation from eliminated programs?

Cross: When you enroll into the university in a program, in a major, there is a quasi contract between you and the university. The university has an obligation to help you finish that major. If it were to close it, the university has to help you finish it and not just throw you out into the street. So when you close majors at times, you also negotiate with that student and offer them any help you can to finish their degree. The university has an obligation to protect you as a student through the quasi contract…

If were to raise tuition today to make up for the $300 million cut, what would that do to tuition?
Cross: For every percent of tuition increase, it generates somewhere under $10 million, so you get an idea how far we’d have to go to make up that $150 million in the first year, It would have to be about a 15% increase. We would never do that…

Will the right to work legislation affect the UW System? Will the loss of pension and benefits affect our ability to attract faculty and students?
I don’t think that will affect our ability to attract and retain faculty and students. There are other things that will affect us that I will talk to. The discussion right now about taking shared governance and tenure out of statutory language and putting it in policy is what is making a lot of people nervous. We’ve been told that faculty being recruited are totally aware of that. And at least two faculty that I know of, have pulled out of searches citing that as the reason. They’re nervous about tenure and about shared governance. Wisconsin is the only state in the union that puts shared governance and tenure in statutory language. You can’t have a viable higher education entity without tenure. Even legislators understand both of those. They want to tweak it a little bit and enact a post tenure review process to reward people for doing their jobs well…

How will the system cuts affect disability services and programs for disabled students?
We will do everything we can to serve all students. That’s our commitment. We will do everything we can to reduce the cuts…

What kind of campaign have you been working on to educate the public and show them how education evolves?
The community is divided 50/50 by those supporting and those opposing what is happening in the state. The misunderstandings about higher education run so deep. It’s amazing that people can be so naïve. I am not sure if you are aware of the university’s campaign a few years ago to try to move public opinion, Knowledge Powers Wisconsin. It was a nice campaign that was not successful. The country is so divided on higher education and so many people have an overly simplistic view of it…

What can we do other than wait?
The advocacy campaign will start in early April. We have asked chancellors and others to hold back a little until we fully understand the cut because it is complicated. We know that most legislators are sympathetic to reducing the cut. What we want to do is compliment them for being sympathetic and reinforce their willingness to reduce the cut and encourage that. We want to appreciate their willingness to give us certain flexibilities, things that they have resisted in the past. Then we can ask them to please reduce this cut. Focus on the importance of the dedicated funding stream and how important it is to stabilizing the future of the university. These three things are the important messages we will be pushing in April, we will start around April 3, which will be flowing through the Chancellor’s office. What we are trying to do is equip you, so that we don’t push the legislature in the wrong direction. We want the legislature to embrace us. We want a concentrated focus in April. We need to advocate on behalf of the UW System. We need to focus on key people and to appeal to the 16 who sit on the Joint Finance Committee.

Town hall meeting with UW System President Ray Cross

(Note, some questions were removed because of duplication; please refer to audio for full comments.)

Reaching legislators and public one-by-one.
In 1989-99 the UW System received $799 million in operating funding. This year — 15 years later — we are operating on $6 million less, $793 million. Throughout those years we have continued to do what we have done to oppose state cuts. I believe we need a different approach … not to speak to legislators in public conversation but in personal conversations, behind closed doors. I really believe there isn’t a legislator that wants to hurt us; they think we can do things differently. The goal is to find ways to works with them and not be viewed as adversarial. Under Governor Doyle the cut was $250 million and tuition was increased by more than 30 percent over two years. The reason I point this out, is that it isn’t about politics. My role is to figure out how to be consistently engaged in the conversation. Will working more collaboratively and less adversarial work? I don’t know … my goal is to improve what has been put on the table. I believe the best way is to do that is with a public authority, a dedicated futuristic funding stream that will stabilize tuition for students and families.

Could cuts be lessened?
We have a serious short-term problem. We can reduce cuts but much will depend on state revenue projections. K-12 will be first in line to have cuts reduced and I think we are second. I think we have sympathetic legislators, and additionally there is support to give us increased flexibilities. Long term, every time GPR is reduced, tuition goes up.

In the last eight years employees have given up pay with furloughs, had greater contributions to benefits and frozen compensation. I don’t see a compensation plan for the state employees in the foreseeable future, and I believe it is the most significant threat we face — we need a dedicated funding structure for stabilization and we need to allow the board to do its own pay plan. That’s the flexibility that needs to be provided to us to have a future that looks hopefully better in the long term but is a very scary situation in the short term.

Regarding tenure being taken out of statutory language.
If tenure and shared governance is taken out of legislation, I and the Board of Regents are fully committed to ensuring that it remains and imbedded as part of the UW System.

On the misconception that the UW is a “job-creator.”
This really came to head in the “mission statement fiasco.” The University is not a job-producing entity but a life-experience entity. When it comes up I believe it is extremely appropriate to think that we help prepare people for jobs and careers, but we might see them in roles of logic, reasoning, writing, communication and as greater members of the community. No question an emphasis is on jobs, but it shouldn’t be our primary purpose.

More regarding public authority.
It’s the best vehicle to accomplish flexibilities. The only way? No. But it is symbolic. If defined in a statute, it is much harder to take away. A dedicated funding source tied to the CPI escalator — base plus CPI — is paramount to tuition control. Paramount to price control. If you can’t let the board set tuition, you don’t need me (UW System President) or a board. Either give us that or get rid of us.

Should the model for UW System’s distribution of funds/cuts be changed?
Yes, it is a 25-30 years-old allocation model. The process needs to be changed. When it will be changed, and how it will be changed, I’m not sure.

Are we collaborators or competitors with UW schools; what is UW System’s role?
System needs to be reformed. We need to look at efficiencies, we need to be accountable and add value… HRS was a fiasco; right now there are 942 different ways payroll is calculated. We could have $500,000 in savings right now using voice over IP. These are places System needs to step in. We shouldn’t be involved in things like student affairs, etc…

Discuss the perceived surplus and how it could be applied to reduce the cut.
That money isn’t discretionary. Consider that the state is paying $800 million in Medicaid this year … 18% of the state budget. We are competing for less dollars. Only $200 to $175 is truly reserve. Other funds designated for planned projects, item-by-item. But we have to consider not only what we have, but where it came from. In some cases the money can only be used for designated projects. In the legislators minds we have this slush fund. If we didn’t include our Foundation accounts, five or six campuses would be put on a “watch list” for not having enough true reserves.

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