Fearing cuts, UW System plays its highest card
11:35 PM 9/12/02
Karen Rivedal Higher education reporter

indentJust in time for what promises to be a grueling state budget year, University of Wisconsin System officials are trying to put their best foot forward by unveiling a new study that pegs the System's economic impact on the state at nearly $9.5 billion annually.
indent"It is very real and it is very large," UW Board of Regents President Guy Gottschalk said Thursday at a Regents' meeting, where study highlights were explained.
indentBut state Rep. John Gard, R-Peshtigo, chairman of the Legislature's powerful Joint Finance Committee, said the study was little more than "food for thought."
indent"I don't know that it really does anything to sway anybody," Gard said. "I think everybody knows the university has a significant impact on the economy."
indentWhen it comes to likely budget cuts, though, the System can't be spared, Gard said - regardless of System President Katharine Lyall's vow last month that the university would have to cut enrollment or raise tuition without more state money.
indent"We're facing some tough decisions down the road, and the university is going to be part of that equation," Gard said. "We're going to do everything we can to not increase the tax burden on anybody who adds value to the economy."
indentThrough its 26 campuses, UW-Extension and UW Hospitals and Clinics, the university also created 150,000 jobs, generated $408 million in state tax revenues and gave the state a return on its total investment in the System of about 9 percent, the study found. The System gets just under a third of its funding from state coffers, or about $980 million per year.
indentThat means that for every dollar the state spends on the System, it gets a return of $9.50 in revenue, Lyall said.
indent"If we had some other name we would loom large in people's minds as a major generator of jobs," Lyall said. "We are a major industry in the state."
indentThe study is based on data from the 2001-2002 academic year, consultant David J. Ward said. Ward, president of NorthStar Economics, also is a former senior vice president of academic affairs for the System, retiring in 2000.
indent"The university is one of the most important economic engines in the state," Ward told the Regents. "It's a considerable enterprise."
indentWith 32,000 employees, the System easily could rank as one of Wisconsin's top 25 businesses, Ward said, and nationally, would be 350th on the Fortune 500 list.
indentThe Regents, who know the Legislature faces a $1.3 billion expected budget deficit next fiscal year and fear a major budget cut, asked Ward how they could best communicate the study findings to the public. Foremost in their minds were state lawmakers, who cut the System budget by $44 million in this summer's budget repair bill, after first proposing a $100 million cut.
indent"Can you break this down by region or campus or even by legislative district?" asked Regent Roger Axtell of Janesville, to appreciative laughs from university staff and Regents around the board room.
indentWard said the numbers measuring economic impact could be broken down by Senate district, with more analysis. The full report, which updates a 1996 study, will be presented at Wisconsin's third annual economic summit, to be held Oct. 14-16 in Milwaukee.
indentState Rep. Rob Kreibich, chairman of the Assembly's Colleges and Universities Committee, said he thought System officials were wise to tout their strengths.
indent"There will be a battle next session for a precious few dollars," Kreibich said. "Looking at our problem in the big picture, the way to turn the economy around is to invest in higher education that will lead to a skilled work force."
indentIn the short-term, though, the university should be prepared to take its lumps, said Kreibich, R-Eau Claire.
indent"Nobody can escape cuts next session, given the size of this problem, including the UW," Kreibich said.
indentWard said the Regents should stress that a healthy university system will equal more graduates, whose higher salaries - if they stay in Wisconsin - will contribute to a greater quality of life and increased tax revenues for the state.
indent"It might lower your taxes," Ward said the board should tell members of the public about the System's economic impact.
indentThe System paid $17,000 for the four-month study, said Linda Weimer, assistant vice president for university relations.
indentThe $9.5 billion figure was determined by first calculating the amount of direct, in-state spending by System institutions, along with the spending of university employees, students and visitors - an amount totaling about $3.96 billion. That amount then was multiplied by an average weighted sales factor for total impact.