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Resolved budget will benefit UW System

October 25, 2007

Nearly four months after its original deadline, State Legislators have finally passed a State budget that favors the UW System.

There had been a stalemate between the Democrat led Senate and the Republican led State Assembly in the past months over how to balance the Wisconsin State budget.

Democrats wanted to raise taxes on cigarettes, tax the profits of oil companies and put a tax on hospitals, while Republicans wanted to cut spending, including a cut to the UW System Funding, instead of raising taxes.

The two sides came to an agreement Tuesday and approved a proposal that compromises between the two extremes. A $1 per pack tax on cigarettes was approved while the tax on hospitals and oil companies was dropped. The deal also will transfer $200 million from a fund used for medical malpractice victims to the general budget fund.

The UW System has received budget cuts over the last five years, Chancellor Don Betz said. The budget passed this week provides a modest increase in funding for new initiatives at UW-River Falls.

“We are truly pleased that the Legislature in a bipartisan manner voted to support UW-River Falls and the University of Wisconsin System,” Betz said in a press release.

The new budget increases funding to the Wisconsin Higher Education Grant, a financial aid program for low-income students, Vice Chancellor for Administration and Finance, Mary Halada said.

Nearly 200 students on campus receive the Wisconsin Higher Education Grant. The future of these students was left in limbo early this year after the funds for the grant were insufficient to cover the students who needed the aid. As a result many were placed on waiting lists until the money issue was worked out. It comes as relief that the new budget contains an increase to this grant.

“It’s comforting to know that I’ll still be able to afford school here,” senior Nathan Rugroden, a Wisconsin Higher Education Grant recipient, said.

The Wisconsin Higher Education Grant funds may be available as soon as next week, Halada said.

Another initiative, called the First Year Experience program, is part of the UW-System growth agenda and is aimed at retaining first year students. The budget allocates $316,100 for the new initiative.

“What we would like to do is beef up the First Year Experience program so that those students coming in have a better chance at being successful, which would help out our retention rate,” Halada said.

Money was also allocated to the Veteran Remissions fund, a financial aid program meant to wave the tuition for Veterans, Halada said. Previously there was no state funding for the initiative, and universities were forced to absorb the costs.

The operational budget of the UW System has also received a boost to help pay for the system’s ‘cost to continue’. The cost to continue at UWRF includes teacher salaries, utility bills, insurance and other costs associated with running the everyday functions of the university.

“The cost to continue dollars basically keeps us even with last year, so if we don’t have that, it’s a reduction,” Halada said.

The State budget also approved funding for the initial planning stages of the new Health and Human Performance Building and an expansion to the South Fork Suites.

“All of that is our money,” Halada said. “But they have given us the approval to spend our money.”

The UW System did receive a cut in the form of a $25 million lapse, Halada said.

A lapse allocates a set amount of money that cannot be used during the current budge cycle. The money is then reinstated during the next budget cycle, which is in another two years.

“It’s much more manageable than a $150 million cut,” Betz said in reference to the State Senate’s original proposed budget.

If the lapse is divided evenly between all UW System schools, UWRF would absorb a $700,000 lapse over two years, with the possibility of getting the funds back during the next budget cycle in two years, Halada said.

“The budget is not perfect,” Mark Kinders, Director of Public Affairs, said in an email. “It will be challenging, yet we can manage this, and we are glad to have it resolved.