The future of some UW campuses are at risk without major changes, new financial reports show

Newly released reports raise questions about the financial viability of Wisconsin's public universities and signal additional cuts coming to some campuses in future years.

The University of Wisconsin System paid outside firm Deloitte $2.8 million to assess the financial health of its individual campuses. The reports released this week underscore the difficult financial forces facing most UW campuses and their unsustainable reliance on reserves to cover year after year of budget deficits.

None of the reports raised the possibility of consolidation or closure. UW System President Jay Rothman said he isn't entertaining the idea of closing any four-year campus. The struggle for chancellors is finding a path to remain financially sustainable while enrollment declines, concerns about college affordability grow and state funding in the most recent budget remained flat.

"I'm confident that all of our universities can get there," Rothman said. "The question is, what is the depth of those cuts going to have to be, because we have a responsibility on the expense side of the ledger to run as efficiently as we possibly can be. But in terms of having additional state support so that we can invest in things that are going to be important for our state going forward, I think that's what the balance is."

The nonpartisan Wisconsin Policy Forum found Wisconsin's four-year university system ranked 43rd in the country in per-pupil funding. Rothman said it would take an additional $440 million annually to move to the median level of funding nationally.

"Ultimately, it is up to the state to decide whether it wants and can afford a weakened (UW System)," Rothman said. "The adage is that you get what you pay for."

Here's what the campus reports show:

UW-Oshkosh

Deloitte painted a dire picture for UW-Oshkosh, saying "without significant and immediate change ... the future of the institution is at risk."

The report called UW-Oshkosh leaders "responsive and decisive" when faced with a $15 million deficit at the beginning of this school year. Hundreds of painful layoffs and early retirements whittled the deficit to $3 million, which the report said has "substantially changed the trajectory of its financial situation."

Even so, the report said overcoming the ongoing deficit will be "challenging."

UW-Oshkosh is at "a critical moment in its history" and must "chart a course back to financial sustainability before the remaining resources are fully depleted." The report called for a "fresh approach" to student recruitment and retention, and adoption of a new academic organization plan that will reduce administrative costs.

UW-Green Bay

Deloitte implored UW-Green Bay leaders to "act with urgency."

The report said UW-Green Bay needs to "right-size" its operations. If the university continues operating at its current rate, Deloitte projected UW-Green Bay spending down all of its reserves and being unable to support itself by 2027.

UW-Green Bay Chancellor Michael Alexander pushed back on the report, saying it took the university's worst financial year in the past six to make future projections and didn't take into account the revenue earned from one of its divisions. He said UW-Green Bay purposely spent down some of its reserves and is on target to close its deficit by the end of next school year. Undergraduate enrollment has held steady, despite demographic trends.

Deloitte's report was a "snapshot" from last fall and more current data presents an optimistic outlook for UW-Green Bay, Alexander said.

UW-Parkside

Declining enrollment and rising expenses are the key drivers to UW-Parkside's deficit. The university has cut 50 jobs, or nearly 10% of its workforce.

Assuming current trends continue, Deloitte forecasts the university's reserves will be fully depleted by the end of next school year and the campus will need UW System's support to remain operational.

UW-Parkside should "seek to re-align operations." The report suggested increasing enrollment and improving reention.

UW-Platteville

UW-Platteville's report included the same ominous line as UW-Oshkosh: "Without significant and immediate change, the future of the institution is at risk."

The university has less than a year of reserves left and needs to "immediately right-size," Deloitte said. The report asked what size UW-Platteville should be in the future.

UW-Platteville is already shrinking its workforce by eliminating 111 positions, a move Deloitte said showed the university's willingness to tackle challenges. Its student retention rates are another strength.

Some university units operate in a way to protect their own budget. The report encouraged approaching challenges as a single institution instead of siloed departments.

UW-River Falls

UW-River Falls is "on a trajectory of financial unsustainability" and needs to "right-size," the report said. The university should identify $7 million to $9 million though a combination of revenue-generation actions and cost-savings decisions soon.

Among the challenges cited in the report were a "perceived disconnect" between administration and academic units about the university's financial reality. In addition, "key tools such as enrollment projections and long-range plans do not yet exist" though leaders are working to build out infrastructure.

To save money, UW-River Falls has merged two of its colleges and initiated a hiring freeze. It will look to enroll more students in existing class sections.

UW-Superior

Declining undergraduate enrollment, low retention and financial instability at UW-Superior "threaten its future," the report said.

Deloitte's model projects the university will deplete its reserves within five years without any changes to existing operations. The report said it was "critical" that leaders evaluate how to grow revenue and cut costs.

UW-Whitewater

UW-Whitewater is in a "critical moment." At its current rate and without changes, the university will deplete its reserves by 2028.

Getting onto a path of financial sustainability will require "bold strategies." The report suggested boosting student retention. Bringing the rate back to pre-pandemic levels could generate up to $2.6 million annually.

The report also called for equpping the university with better financial tools to identify and resolve long-term financial problems.

What about other universities?

Reports on the remaining universities — UW-Milwaukee, UW-La Crosse, UW-Eau Claire, UW-Stevens Point and UW-Stout — will be released later this year. UW-Madison was not part of the review.

Contact Kelly Meyerhofer at kmeyerhofer@gannett.com or 414-223-5168. Follow her on X (Twitter) at @KellyMeyerhofer.

This article originally appeared on Milwaukee Journal Sentinel: Some University of Wisconsin campuses need to right-size, report says