The more you look at it, the more the proposal for a UW authority looks like a gift horse for the university.
But there’s a bunch of big “IFs.”
The initial rhetoric from Gov. Walker and the GOP-controlled legislature proposes to give UW leaders “flexibility” under the authority structure in return for bailing Walker and company out of their budget crunch. The governor’s proposed cut in state support for the UW System and its 26 campuses is about $150 million per year, or about 4 percent of its total revenues.
If the Republican leaders walk the talk on flexibility, and if UW System leaders have the mettle to apply some tough love to our beloved institution, the citizens of Wisconsin, their offspring and the state’s economy could come out as winners.
With flexibility, the UW Board of Regents and President Ray Cross could shed baggage and clean up misalignment that has built since the last reorganization of the university 43 years ago. They could freshen the System’s mission statement.
But, again, only:
• If the system is free not only to set wages, work and tenure rules, but also benefits. The system spends about a half billion dollars a year on health care bought through the Employee Trust Funds. At least 20 percent — $100 million per year — could be saved if chancellors could purchase health care locally with the same innovative management of health and health costs that private corporations are deploying. That alone could recover two-thirds of the Walker cuts. The benefit management piece has not been clearly addressed in the budget. Local government is already enjoying those kinds of savings post Act 10.
• If mandates are removed on continuance of campuses, departments, majors, academic centers across the 26 campuses. The budget inexplicably removes some mandates, but not others. It will probably take a commission appointed by the regents to sort out where value is added and where it is not in the complex system. It could operate like federal base closing commissions for the armed services, where an overall package is presented to Congress for an up or down vote. That would eliminate log rolling in the legislature, if the package ended up there, which it probably would.
• If all entities under the general purview of the university are included in consolidated financial statements, including a balance sheet. For instance, foundations in and around UW–Madison have more than $6 billion in assets and don’t send enough dollars back to the system. At present, as an educated guesstimate, they send back about $150 million. A general rule for foundations is a 5 percent annual payout, or $300 million. The difference would also offset the Walker cuts. The Legislature and citizens need full and transparent accounting of all UW authority assets. UW-Milwaukee has a consolidated balance sheet for all its affiliated organizations; why not UW–Madison?
• If the authority is enabled to manage its own building programs, roughly $400 million per year. The Walker budget keeps some of that authority in the Department of Administration and the state building commission.
• If regents have the power to unwind the Minnesota reciprocity agreement that costs Wisconsin taxpayers about $15 million per year and contributes to our brain drain of 10,000 college graduates per year. Most of the Gophers educated here go back home, while many of the Badgers educated there don’t.
• If the 26 campuses can be realigned along regional lines in Wisconsin to achieve better alignment with where the action is on economic development. Regional universities would draw in more regional business support.
• If the new authority can be given some kind of long-term commitment from state government for continuing financing. Somehow, some way, the concept of using the state sales tax made its way into Gov. Walker’s budget proposal. You have to wonder if the governor knew that clause was in there, because he has always run against tax increases, including sales tax increases. That revenue source never came up in his campaign for governor.
A cardinal rule in management says that when you give someone the responsibility for an assignment, you have to give that someone or some entity the authority to do what is necessary to get the job done.
You are asking for failure if you tie the hands of the responsible party. You can’t create an authority that lacks authority, at least not a successful authority.
John Torinus is chairman of Serigraph Inc. in West Bend. He is involved with several business and civic organizations and is the author of “The Company That Solved Health Care.”
