Walker says he won't reduce funding request for Wisconsin universities

MILWAUKEE -- Gov. Scott Walker said Monday that he won't seek to reduce funding for the University of Wisconsin System in his proposed budget amid reports of a $650 million surplus, but he hopes the money will be used to freeze or reduce tuition.

Republican lawmakers reacted with outrage Friday after receiving a nonpartisan Legislative Fiscal Bureau memo that said the system finished the fiscal year that ended June 30, 2012, with nearly $650 million in reserve across a number of accounts, including $414.1 million in tuition. They were particularly offended because earlier in the day System President Kevin Reilly issued a statement saying he planned to recommend the Board of Regents impose a 2 percent tuition increase in each of the next two years.

"I think in light of this, I -- as well as many other lawmakers, I think, in this state -- would like to see these resources used at a minimum to freeze tuition if not lower it going into the next school year, and I think there is going to be a dramatic push to do that," Walker said.

Some lawmakers have called for an investigation into system finances, noting that it amassed the surplus while raising base tuition across the system's four-year schools by 5.5 percent annually since the 2007-08 academic year. Walker said he is willing to "look at the details" of how the surplus developed, but he wasn't looking for a scapegoat.

"Some people may want to try to single somebody out," Walker said. "I'm going to try and spend my time figuring out the best way to manage this going forward to keep tuition under control and still keep the University of Wisconsin one of the premier universities in the world."

UW System spokesman Dave Giroux has defended the surplus, saying the extra money gives the system a safety net during volatile financial times and only about $82 million of the tuition surplus isn't committed to a specific purpose. The Legislative Fiscal Bureau's memo noted system officials identified specific purposes for about $332 million of the tuition surplus, including technology purchases, financial aid and investing in a new program to give students credit for work experience and other life knowledge.

System officials had asked Walker for $37 million in his two-year budget for new academic programs and initiatives; he gave them about $27 million for those items as part of an overall increase of $181.3 million. Giroux said most of the $181.3 million will go toward salaries, benefits, utilities, debt and other costs.

Speaking at a news conference following his return from a 10-day trade trip to China, Walker said he had no plans to reduce the amount allocated to the university system because much of the money was for economic development projects that he considers essential.

"We'd like to see those initiatives go forward," he said.

Walker said during his trip to China, he met the developer doing the largest new building construction in Shanghai and that man's son is a freshman studying civil engineering at UW-Madison. He also noted that the number of Chinese students attending the University of Wisconsin has increased 90 percent in the past four years. Walker said he wanted that to continue.

The governor also recapped his trip to China, saying a $200 million deal to sell Wisconsin-grown ginseng to one of China's largest medicine companies was probably the biggest achievement. But he also said a deal in the works to sell animal feed products to a Chinese dairy company could be just as big.

Walker said China offers opportunities for Wisconsin manufacturers too, with growing demand for iconic products like Harley-Davidson motorcycles as well as technology that can be used to improve air and water quality. He pointed to the growth of Arcadia-based Ashley Furniture as another example of demand for Wisconsin goods, noting the company could have as many retail outlets in China as it does in the United States in the next five years.

Walker said it would likely be difficult to put a final figure on the amount of business the trip generated, but he thought it made a difference.

"Often times, presence via a trade mission, no matter where it is, gets people off the dime to get things done," he said.