The UW-Madison Structural Deficit
The way that UW-Madison's handles graduate tuition remission in its
accounting creates an automatic structural deficit. These accounting
procedures are largely a result of State Statutes 36.27 (3g) and 20.285
(2d).
State Statute 36.27 (3g) reads:
The board shall remit nonresident tuition and fees, in whole or part,
to resident and nonresident graduate students who are fellows or who
are employed within the system as faculty, instructional academic staff
or assistants with an appointment equal to at least 33% of a full-time
equivalent position.
State Statute 20.285 (2d) reads:
Fee and tuition remissions. The aggregate amount of nonresident
remissions of tuition and fees for any fiscal year for the institutions
formerly governed under ch. 36, 1971 stats., may not exceed the
aggregate amount so remitted for those institutions in the 1970-71
fiscal year as adjusted for proportional increases in tuition charges
since 1976-77, and for the institutions formerly governed under ch. 37,
1971 stats., the aggregate amount shall not exceed the aggregate amount
so remitted for those institutions in the 1972-73 fiscal year as
adjusted for proportional increases in tuition charges since 1976-77.
The limits under this paragraph do not apply to fee remissions granted
under s. 36.27 (3) (g). This paragraph does not restrict the granting
of remissions when required under the terms of a contract or gift, or
when such remissions are reimbursed as an indirect cost.
State Statute 36.27 explicitly allows the university to remit the
nonresident portion of graduate tuition but not the resident portion.
State Statute 20.285 places a cap on the total amount of nonresident
remissions the university may grant. The end result is a cap on the
total amount of remissions the university is permitted. However, this
allowed amount does not reflect the actual amount of remissions
currently granted.
In 1997, as a result of a collective bargaining agreement with the
Teaching Assistants' Association (TAA; AFT Local #3220), UW-Madison
agreed to grant remission of both the resident and nonresident portions
of tuition to graduate employees with at least a 33.3% full-time
equivalent level. The drop in revenue from these additional remissions
was offset by the TAA agreeing to a cut in its members' pay rate.
Since the state statutes remained unchanged, however, the resident
portion of these remissions was not officially allowed. As a result,
UW-Madison continued to budget as though it still received resident
tuition from graduate students. This "phantom" revenue resulted in a
chronic structural deficit in the UW-Madison budget, and when the
university then spent money according to its budget it resulted in a
real shortfall of funds.
In an effort to address this funding shortfall, UW-Madison began to
assess a fee to employers of graduate assistants equal to 25% of the
assistants' monthly stipend. This helped fill the gap at first.
However, as tuition costs rose dramatically over time while stipend
levels remained relatively fixed, the 25% fee became increasingly
inadequate to fill the gap between the "phantom" and real revenue. The
University began depleting its Capital Exercise Fund to make up the
difference. Since this Fund was needed for other purposes, this
situation was not sustainable.
In response, in 2005 the UW-Madison Chancellor convened the Tuition
Remission Task Force to explore ways to deal with this problem.
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