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Chancellor column: UWSP reserves invested in student, campus needs

1:42 PM, Apr. 26, 2013  |  Comments
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The Legislative Fiscal Bureau's report on April 19 regarding University of Wisconsin revenue balances has generated a flurry of reaction in recent days. I'd like to share the Pointer perspective and provide some context to the discussion.

Approximately 16 percent of the University of Wisconsin-Stevens Point's budget comes from the state and 26 percent comes from tuition. The rest of the funds are generated on campus or through federal aid, gifts and grants.

Let's focus on tuition. On June 30, 2012, UWSP had $10.7 million in tuition reserves. This represents 2.6 percent of the $414 million in total tuition reserves throughout the UW System.

The reserve balance on June 30, 2012, was a snapshot in time that changes daily. Since then, of the $10.7 million in tuition reserves at UWSP, the university invested just less than $5.8 million for various operating costs, including student retention initiatives, investments in our infrastructure and salary equity adjustments, as well as our share of UW System-wide software costs that alone totaled $931,000.

In recent years, UWSP has used tuition reserves for items such as extra class sections (296 just this year), disability accommodations and classroom upgrades. We also have set aside funds for a student information system and campus security enhancements.

Here's why reserves are necessary: As state support has dwindled and become less predictable, UWSP has increasingly relied on tuition to pay operating costs. The danger with becoming more reliant on tuition is tuition revenue can fluctuate dramatically from year to year. For example, if UWSP enrolls 150 fewer students in a given year, we lose more than $1 million in tuition and fees alone.

Like most businesses and households, the university recognizes the need for a reserve fund for unexpected expenditures or fluctuating income.

UWSP is committed to sound, responsible management practices. Our reasonable financial reserve is part of how we prudently manage our money. We have positioned the university where we need to be for our students to succeed and our community and region to thrive.

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