Budget Concerns Hit UWM
Provost describes situation as a "crisis"
UWM is in a financial crisis, according to Provost Johannes Britz. This was revealed in the Academic Planning and Budget Committee’s meeting on Oct. 24, in which Britz and the committee discussed changes to how the university distributes money to schools and colleges.
Enrollment drops, problems with retaining students, and a smaller budget number than some think is helping cause the concern.
The change in giving more money to the provost’s office to distribute to schools and colleges also raised some concern among committee members.
The committee met to discuss possible ways the university and the professors can bring in more money for UWM.
“We have a challenge ahead,” Britz said as he addressed the committee. “There’s no doubt about it.”
The crisis is due to a huge gap in UWM’s reported budget and actual budget. According to the school’s website, UWM’s reported budget is $675 million, but the actual number is a lot smaller, according committee member and Professor Swarnjit Arora.
“There is a potential of double counting and we do not have all of the money for us to spend.” Arora said. “For example, $210.4 million is for federal student aid, which goes to students at the same time students pay tuition of $230.7 million. So should we count $210.4 [plus] $230.7 [equaling] $441.1 million in our budget resulting in total of $704.6 million or to examine funds available for us to spend, only count[ing] $230.7 million?”
Arora went on to explain there is a similar issue when dealing with the Auxiliary Funds of $78.4 million.
“These funds contain segregated fee of $33.9 million plus $47.2 million for the fee charged for services such as university housing and restaurant businesses,” Arora said. “Again, these funds are not available for us when we are looking into the flexible amount for us to spend on various programs like faculty and staff salaries library, IT, Graduate School and other administrative units.”
Arora further explained all of these factors add up to the huge discrepancy in the budget.
“Thus if we subtract away, student aid, research grants, indirect cost etc, we have only about $450 million,” Arora said. “And if we exclude auxiliary fees and some other users’ fees, we are left with only $353 million for our planning purposes. Which is not much.”
Also contributing to the budget concerns is the drop in enrollment, especially in the college of Letters and Science (L&S), according to Britz.
Along with the declining enrollment rates is also the issue of a staggering 37 percent of UWM students end up leaving the university for various reasons, including dropping out, according to Britz.
All of these factors are contributing to the budget crisis and leading into questions of how to allocate the scarce funds. The proposed distribution model is more of a decentralized system, which was opposed by some committee members.
“I would go absolutely in the opposite direction than the proposed distribution,” committee member Paul Florsheim said.
He was not the only one to disagree with the proposed model either.
“Going to that decentralized model is dangerous,” committee member Rebecca Klaper said in response to the proposal of each School or College deciding what to do with their own budgeted money.
In this decentralized system, each separate college would get 100 percent of all indirect costs, sponsored funds and trust funds, along with 80 percent of the tuition revenue.
Some colleges may need more money than other colleges and might need more than is budgeted, leading to the objections. The College of Letters and Science enrollment rates are declining, but enrollment in the College of Engineering and Applied Sciences is up, according to Provost Britz.
Under a more centralized system, if one College or School would need more money than budgeted, the money would be there if needed. The proposed system does allocate over $30 million to the Provost to be able to have the flexibility to give extra money to some programs if needed to act as a sort of a centralized pool.
A way to bring in more money to the university is by writing grants. The problem is that either the money isn’t there to fund the grants or there just are not grants being written. That money can then be put towards funding things such as scholarships. Funding for scholarships happens to be the committee’s main concern, according to Arora.
Britz came prepared with a four-point plan to get through the crisis.
The first step is to be smart and start sharing money smarter, he elaborated.
Second is to be more efficient with money and with the faculty.
“There’s no need for three professors to teach one class,” Britz said. “We could take those other two teachers and use them to help write grants and bring money into the university.”
The third step is to invest smarter and wiser in programs that will bring money to the university.
Finally, the Provost wanted the committee know that they were not alone in this crisis.
“We’re all in this together.” Britz said.
Though the Provost has a plan in place, the fact is that the university is in a financial crisis.
However, Britz did leave the committee with an optimist view.
“We’ll get through this.”