Junjie Guo, Kim Ruhl and Ananth Seshadri
Executive Summary:
- Recent reports note that Wisconsin is 42nd in the nation when it comes to funding the UW-System. Wisconsin allocates a larger share of higher-education appropriations to 2-year institutions than most other states and a smaller share to 4-year This distinction is becoming less meaningful as the 2-year technical colleges offer liberal arts transfer degrees as a pathway to a 4-year institution and the UW-System schools are increasingly focused on majors that satisfy workforce demands.
- This paper addresses the question: Is the Wisconsin taxpayer rather stingy in funding higher education in Wisconsin and, in particular, funding UW-Madison?
- Wisconsin is 22nd in the nation when it comes to total higher-education appropriations per full-time equivalent (FTE) undergraduate, which includes both UW-System and technical college While this measure declined in the last decade, it also declined between 2003 and 2010. Despite the decline, it has remained higher than the median in the United States for more than the last two decades.
- While state appropriations per FTE undergraduate are a commonly used metric, they do not account for the variations in income across states (richer states spend more) and institution quality (peer comparisons).
- After accounting for state income per capita, Wisconsin’s appropriations per FTE undergraduate are appreciably higher than the national average, casting doubt on the notion that the Wisconsin taxpayer is stingy.
- State appropriations per FTE undergraduate are higher for UW-Madison than the median of other Big-10 universities and the median of other public institutions in the Association of American Universities (AAU).
- As a share of university revenue, state appropriations for UW-Madison are similar to the median of other Big-10 universities and the median of other public AAU institutions.
- States exert influence over in-state Reservegate led to a decade-long tuition freeze in Wisconsin. Focusing on the sum of tuition and fees and state appropriations, we find that UW-Madison is slightly below the median of Big-10 peers.
- In the past, UW System tuition rose to offset declines in state support to protect the university system. That implicit contract is now broken. If the state deems UW- Madison worthy of additional support, it ought to come from increases in in-state tuition and not on the backs of the Wisconsin taxpayer.