Millions of dollars in revenue and state aid could bolster the Universities of Wisconsin budget as soon as February if lawmakers take up two provisions of the deal struck between UW system officials and Republican legislative leaders that gave the UW system about $800 million in exchange for changes to its diversity, equity and inclusion programs.
One provision funds a $32 million workforce development plan that creates new programs and strengthens others in artificial intelligence and computer science, engineering, health care and finance. The Legislature's budget committee initially held back $32 million in UW system funding — what legislators estimate the UW system spends on DEI staff and programming over two years — stating the UW system could only recoup the money if it reallocated those dollars to addressing the state's workforce shortages. It's now up to the committee to approve funding for the plan the UW system devised.
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Senate Bill 161 and Assembly Bill 140 aim to satisfy another part of the DEI deal by making changes to the Minnesota-Wisconsin tuition reciprocity agreement so that the UW system gets to keep more of the tuition money paid by Minnesota students who attend UW schools, which under current law is deposited in the state's general fund.
The challenge for both provisions, though, is time: Both the bipartisan Minnesota-Wisconsin reciprocity bill and the release of the $32 million held back from the UW system in the last budget cycle are required to be approved before Feb. 22, the end of that month's legislative cycle.
Where the DEI deal stands
The deal struck between UW system President Jay Rothman and Assembly Speaker Rep. Robin Vos, R-Rochester, in December is complex, with different votes and approvals required for individual provisions. For example, the Joint Committee on Employee Relations had been required to approve pay raises for UW system staff by the end of 2023 and the UW system has two academic years to reclassify a third of its DEI employees.
The Minnesota-Wisconsin reciprocity bill is awaiting a floor vote in the Senate. No meetings are scheduled for the budget committee.
Spokespeople for Vos, Senate Majority Leader Sen. Devin LeMahieu, R-Oostburg, and Republican co-chairs of the budget committee did not respond to questions asking when the provisions would come up for a vote.
Earlier this month, Republican lawmakers introduced a bill to fund $740 million in key projects at UW-Madison and around the UW system, an integral part of the deal. Those projects, including the highly coveted UW-Madison engineering building, also are required to receive legislative approval by the end of the February legislative session.
The deal came after a months-long battle over the UW system’s diversity, equity and inclusion staff and programming. Started by Vos earlier during the budget process last year, he and other Republicans made good on a promise to cut $32 million from the UW system's budget, declined to fund the new UW-Madison engineering building and withheld pay raises approved as part of the state budget over DEI.
In return for $800 million in UW system investment, Republicans are requiring that UW system administrators reclassify a third of DEI employees, or 43 positions, as “student success” employees over the next two academic years.
Another aspect of the deal — although not tethered to a specific timeline — is a bill that would require the UW system to automatically admit students who are in the top percentages of their class, with UW-Madison being required to admit the top 5% and all other campuses being required to admit the top 10%.
The UW system already is offering automatic acceptance to qualifying high school juniors starting in summer 2024, with 10 of the 13 campuses and more than 200 high schools or districts opting in.
How reciprocity would change
Under the bipartisan tuition reciprocity bill, UW-Madison and some of the farthest-west campuses in the UW system, where most Minnesota students attend, could stand to gain hundreds of thousands or even millions of dollars in tuition.
The bill was initially introduced by lawmakers last summer but became a part of the DEI deal after months of negotiations between Rothman and Vos.
Under the Minnesota-Wisconsin reciprocity agreement, established almost 60 years ago, college students who want to attend college in the other state avoid paying out-of-state tuition costs. Instead, students pay the in-state tuition rate for whichever state is higher, and the states reimburse one another based on enrollment. Because Minnesota's tuition rate is higher, thanks in part to Wisconsin's decade-long tuition freeze, the UW system often ends up with millions in surplus.
Under current law, though, the UW system only keeps the amount of Minnesota student tuition equivalent to what in-state students pay. The rest is put in the state's general fund.
For the 2020-21 school year, Minnesota students attending UW schools paid $18.5 million more in tuition above what Wisconsin students paid; about $7.2 million of that went back to Minnesota and the remaining $11.4 million was deposited in the state's general fund.
Between 2016 and 2020, $44.4 million in Minnesota students' tuition went into the general fund.
Dollar for dollar, UW-Madison stands to benefit the most from changes that would let the UW system keep those funds in future years.
In the 2021-22 academic year, Minnesota students attending UW schools paid more than $26 million in tuition over Wisconsin's in-state rate. Of that, $13.6 million was collected by UW-Madison.
UW-River Falls in northwestern Wisconsin, about a 20-minute drive from the Minnesota border, has the highest percentage of Minnesota students among the UW campuses, 43%. In 2021-22, it forked over the second-highest amount of Minnesota student tuition, $4.3 million.
"That is revenue that could have been reinvested in UWRF, meeting student demands and filling regional employer needs," UW-River Falls Chancellor Maria Gallo said in testimony in support of the tuition reciprocity changes. "That revenue would allow us to offer more innovative, high-quality programming for our students, add advisers and support student success, and increase hands-on collaboration opportunities with local employers."
UW-Stout and UW-Eau Claire, also located on the far west side of the state, each could retain about $2.5 million in Minnesota student tuition, based on 2021-22 numbers.
An added wrinkle is Minnesota's new tuition waiver program, North Star Promise Scholarship, which provides free college to students with families who make $80,000 or less annually. That could affect the number of Minnesota students who attend UW schools.
Additional money to increase recruitment efforts will be vital, UW-Stout Chancellor Katherine Frank wrote in a statement supporting changes to the reciprocity agreement: "With declining populations of high school graduates and increasing competition with Minnesota, which will only be heightened by their new North Star Promise Scholarship, this agreement is more important than ever in attracting Minnesota students to Wisconsin."