"We create our future."
These words summarized the slide show about the newly passed 2015-17 state budget that Chancellor James Schmidt presented July 10 to a gathering of UW-Eau Claire faculty, staff and students. Schmidt's message was clear: UW-Eau Claire is capable of making the necessary, if painful, institutional changes required to meet the challenges created by a historic combination of deep state funding reductions and a four-year tuition freeze.
The 2015-17 budget approved by the state Legislature and signed by Gov. Scott Walker reduced funding to the UW System by $250 million and extended the existing two-year tuition freeze by another two years. The budget also eliminated tenure from state statute.
The UW System Board of Regents has temporarily adopted as board policy the previous statutory language governing tenure. A task force has been formed to make recommendations by the end of April 2016 for long-term Board of Regents tenure policy.
As the state budget debate unfolded during the spring, the funding cuts, tuition freeze, and changes to tenure and shared governance thrust the UW System into the national and international spotlight and created concern and uncertainty within the UW-Eau Claire campus community about potential impacts on the university's tradition of "Excellence."
The challenges presented by the budget are significant, and Schmidt made the case that those challenges will require the university to make fundamental changes.
"Since first learning about the potential size of the budget cuts and continued tuition freeze, I have been consistent in my discussions with campus — we will not be victims of what happens in the state Capitol," Schmidt said. "We must control our own destiny and embrace new ways of envisioning and doing our work so UW-Eau Claire continues to provide the high-quality educational experiences our students expect and deserve."
While there have been reductions in state funding to the UW System in five of the past six budgets, under both Republican and Democratic administrations and legislatures, (see table on right), the combination of the 2015-17 reduction and the extended tuition freeze are unprecedented in UW System history. The budget also continued the decades-long trend of reduced state funding and increased reliance on student tuition that has resulted in 80 percent of the university's general fund budget (comprised primarily of the state appropriation and tuition) coming from tuition.
The budget reduced UW-Eau Claire's state appropriation by $7.7 million annually — a 26 percent cut. That cut, combined with the 2013-15 state allocation reduction of $3.1 million and a $1.4 million loss of tuition revenue due to a slight decline in enrollment, means UW-Eau Claire now faces a $12.2 million shortfall to fund core classroom, student support, business, administrative and facilities functions.
Preparing for cuts
Chancellor Schmidt first learned about the potential for a $300 million reduction in state funding (the Legislature changed the reduction to $250 million), an extended tuition freeze and a proposal by Walker to create a new UW System public authority (the Legislature did not adopt the public authority) during a meeting Jan. 5 with UW System President Ray Cross and other UW System campus chancellors.
"My past experience with state budget processes is that the end result is usually pretty close to what the governor proposes," Schmidt said. "So I knew after the meeting that since more than 85 percent of our operating budget goes toward personnel costs, the magnitude of the reductions would likely result in us having far fewer faculty and staff to teach and support our students. We needed an action plan, and we needed to be strategic in our decision making."
After learning of the proposed major changes in the budget, Schmidt immediately engaged senior university leadership, deans, faculty, and staff shared governance groups, student leaders and his cabinet to begin the planning process. That process began with the creation of four Rapid Action Task Forces to review operational areas of the university and make recommendations for streamlining and reorganization. Those task forces focused on academic workload, curriculum, administrative redesign, and student services.
The task forces were instructed to develop recommendations based on several strategic goals and guiding principles:
- Budget cuts to instruction and essential student services to be minimized as much as possible
- 100 percent of all Blugolds to participate in at least one high-impact experience (faculty-student collaborative research, internship, study abroad, cultural immersion) during their college career
- 90 percent of students to be retained from their first to second year (currently about 83 percent are retained)
- 50 percent of students to graduate within four years (currently 33 percent graduate in four years, while 62 percent graduate in five)
- 20 percent of the student population to be diverse, with the opportunity gap between students of color and majority students being reduced or closed
To realize personnel savings and minimize involuntary layoffs, Schmidt borrowed a page from his budget-cutting playbook at Winona State University, his previous institution in Minnesota: a voluntary separation incentive program for employees nearing retirement age. Such a program had been very effective in producing cost savings in Minnesota, but Wisconsin had no experience with something similar.
Schmidt worked closely with UW System Administration and his fellow chancellors to develop a program for UW System institutions that wanted to participate. UW-Eau Claire was the first to offer the incentive, which provided eligible employees with a one-time payment of one-half their annual salary to voluntarily leave the university. While there is an initial up-front cost to pay the benefit, the potential long-term personnel savings are significantly higher.
Now that the budget is finalized, the plan that was developed during the past six months must be implemented. Teams have been formed to develop specific actions based on Rapid Action Task Force recommendations and other information. The voluntary separation incentive program was launched in the spring. Of the 321 faculty and staff who were eligible for the program, 98 ultimately decided to participate (view the list of participants at uwec.ly/vsip). The result is an anticipated ongoing savings of $4.1 million annually to the general fund budget.
"When reading the list of people who accepted the voluntary separation, it became very clear to me that UW-Eau Claire was losing a tremendous amount of experience and expertise — many participants are true gems of the university," Schmidt said. "I salute the dedication and service of those who are leaving and also appreciate that their decision to do so will help preserve other positions on campus.
Targets also have been identified for reductions in specific areas:
- A 25 percent cut in senior administration positions (positions with either dean or chancellor in their title)
- Innovation savings that include 20 percent in student services through consolidation and creation of a one-stop-shop (students will be able to conduct most of their transactions, such as those related to financial aid, records and registration, tuition and housing, in one office rather than multiple offices)
- 20 percent in administrative streamlining
- 20 percent through centralization of student support program
- 20 percent through reorganization of facilities maintenance, repair, and planning
Besides already-planned budget reductions that have been implemented in the past months, additional necessary reductions will be identified and put in place during the 2015-16 academic year and beyond. Despite this, UW-Eau Claire remains an attractive option for students. The incoming 2015 freshman class is approximately 2,300 students, one of the largest in decades.
To meet budget reductions, the reality is that some class sizes will have to be bigger and fewer sections and elective courses may be offered — but the commitment to the quality of a Blugold degree will not diminish.
"One of my mentors always said, 'Access without quality is no bargain,' and I agree with that," Schmidt said. "But I also know the dedicated and talented faculty and staff who remain with this institution after the budget cuts will do everything in their power to provide our students with the personal attention that has long been the hallmark of a UW-Eau Claire education."