The Universities of Wisconsin system is facing major projected budget shortfalls in the coming years as financial reserves dwindle and retention rates fall.
These are the main themes the system’s president, Jay Rothman, pointed to in recently released third-party reports on the state’s universities.
The system’s trustees charged Rothman with eliminating structural shortfalls a year ago, with 10 of the system’s 13 universities running budget deficits at the time. Rothman’s office hired consulting firm Deloitte to analyze the finances of Wisconsin’s colleges.
The results were stark. At the University of Wisconsin-Oshkosh, for example, financial reserves are nearly depleted as expenses rise and revenues fall. The report on the institution predicted UW-Oshkosh will face a nearly $20 million budget deficit by the 2028 fiscal year and said it needs to act swiftly to avoid liquidity issues.
The reports on the system’s other universities tell a similar story. The analysis of the Parkside, Platteville and Whitewater campuses all contained notes warning of looming liquidity strains. Reports are still forthcoming for several universities in the system.
Only University of Wisconsin-Madison, the system’s flagship, is operating in the black, the president noted in a lengthy statement.
Declining retention and rising costs weren’t the only issues raised in the reports. Rothman called out other concerns, including aging facilities and maintenance backlogs, uncompetitive salaries for faculty and staff, programs that produce few graduates, and increased demand for student services, such as mental health.
The enrollment picture is equally bleak. Total enrollment fell nearly 12% between its peak in 2010 and 2022, when the figure bottomed out at 160,782 students.
Opportunities include rolling out direct admissions, which involves notifying students they are admitted before they apply. Rothman also pointed to expanding dual enrollment and continuing education offerings while also focusing on improving retention.
“For years, we have tried to make ends meet on the backs of those who provide the education students deserve and parents expect – our faculty and staff,” Rothman said in an open letter, alluding to recent layoffs at the state’s universities. “That should not have to continue.”
He called on Wisconsin lawmakers to support its higher education system with more funding.
“While we will do our part on the expense side of the ledger, ultimately it is up to the state to decide whether it wants and can afford a weakened Universities of Wisconsin,” Rothman said.
A 2023 report from Wisconsin Policy Forum found the state ranked 43rd in per-student state funding for its four-year universities. In his letter, Rothman cited the low funding the system receives compared to other states.
“Continued funding at that level will result in further cuts at our universities and will negatively impact the single best generator of talent and economic growth in Wisconsin,” Rothman said.
Getting to the median level of funding would take an investment of $440 million.
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