The University’s limited financial resources have a major impact on its development. Financial constraints affect areas as diverse as program development, student support, support of instruction and research, and faculty recruitment.
The history of revenue growth reveals an important shift through time: There has been an ongoing decline in state support and an increasing reliance on tuition revenues. State funds provided 32.7 percent in 1995-96, 28.1 percent in 2002-03, and 24.3 percent in 2003-04. At the same time, tuition’s share of revenues increased from 18.1 percent in 1995-96 to 23.1 percent in 2003-04. State funding is unlikely to return to its previous level as a percentage of UWM’s revenue base, and will probably continue to represent a smaller share of overall university funding in the near future. Recent state budgets have required the UW System to rely upon tuition for a greater part of its income because of a structural shift in state funding priorities (for example, more state funding was directed to local schools).
The challenge to the University is how to maintain a resource stream that allows it to conduct the range of instructional and research activities that are in keeping with its vision and without compromising quality. Over the last decade, enrollment growth, tuition increases, and federal student aid and grants have played a major role in maintaining the revenue stream. UWM remains relatively inexpensive compared to other public universities in the Midwest despite some sharp tuition increases, but additional large tuition increases will restrict student access to the University. In addition, the significant resource increase generated by extramural grants is, in part, due to increased investment in research infrastructure in the sciences and engineering. One concern is how budget constraints will affect the institution’s ability to continue these investments.
Another concern is the retention of faculty and staff in the face of small (1%) or nonexistent salary increases, as has occurred over the last two years. This is a System-wide concern that must be negotiated with state government.
One component of the Investment Plan was a major effort at raising private gifts. Although gifts have increased substantially, the level of support is below the original target. This is one area that needs more attention. The success of the capital campaign will be a determinant of UWM’s ability to achieve excellence.
Thus one of the major challenges for the University is developing realistic budget forecasts and fiscal models that are integrated with academic planning to identify appropriate investment choices for the University’s future.
