Giving the University of Wisconsin-Madison autonomy from the UW System could come at a high cost - a $50 million budget cut from the state and a 10% tuition increase each of the next two years for Madison students, according to a memo the UW-Madison chancellor sent to Gov. Scott Walker's administration.

The tuition boost would offset the budget cut by the state and help pay for the Madison Initiative, a program for improving undergraduate education at UW-Madison that has been endorsed by the UW System Board of Regents.

In a meeting with UW System leaders Thursday at the state Capitol, Walker said he would give UW-Madison and UW-Milwaukee some of the freedoms they're seeking from state rules on purchasing, pay and in other areas when he unveils his budget plan next week.

Walker wasn't clear in the meeting that he would go further with UW-Madison and give the school autonomy from oversight by the system, but a memo obtained by the Journal Sentinel on Wednesday indicates UW-Madison Chancellor Biddy Martin and the Walker administration discussed details of how such a split would work.

Martin said Thursday that if Walker wants UW-Madison to split from other UW System campuses, she would back him.

"UW-Madison cannot continue to be the economic driver and the gem that it is for the state of Wisconsin if it doesn't have new tools with which to deal with significant budget cuts," she said.

Former Wisconsin Gov. Patrick J. Lucey, a Democrat who led the push for the creation of the UW System in 1971, weighed in on the possibility of splitting UW-Madison from the rest of the UW System on Thursday, saying he's "quite troubled" by the prospect.

Removing UW-Madison from the system "defeats the whole purpose of unification," Lucey said. If UW-Madison is separated, he said, "I would think the budgets of other schools in the system would probably be shortchanged as a result."

But Martin said other campuses would be fine.

"I don't agree that having Madison have a separate status, if that's what it takes to make sure we preserve the strength of this great institution, will damage other campuses," Martin said Thursday afternoon. "In fact I know other campuses are avidly pursuing more flexibility that would be appropriate to their individual campuses as well."

Memo discusses tuition

On Wednesday, the Journal Sentinel obtained part of a Jan. 7 memo that Martin sent to Administration Secretary Mike Huebsch in which Martin says she would help lobby for a plan to remove UW-Madison from oversight by the UW System if Walker proposed it.

On Thursday, the paper was given another page of the memo spelling out how such a plan might boost tuition.

The additional page apparently answers a question Huebsch asks about what tuition increase would be needed to offset a $50 million budget cut. The memo says a 26% tuition increase would be necessary, which Martin described as "unacceptable."

Martin wrote that an alternative would be a tuition increase of 10% a year. UW-Madison could pursue efficiencies to make up the rest of the gap, the memo says.

The memo also outlines a structure for an independent UW-Madison that would be able to set its own tuition and write a budget without the UW System intervention.

Martin's bosses on the Board of Regents have been asking the governor for more freedom from state rules for all 26 UW campuses and the UW Extension.

They've argued the rules make it difficult for them to compete with other universities, to get the best purchasing deals and to launch new courses.

But system leaders want the flexibility while keeping UW-Madison under their oversight. They sent a letter to Walker on Tuesday saying that splitting UW-Madison from the rest of the system could harm other campuses, such as UWM.

Martin said she respects the regents, but she disagrees. She also said she does not believe she did an end run around her bosses.

"I was asked to meet with the governor's staff. I was asked to provide information to the governor's staff. That's what I did," she said. "It was my understanding at every point that it was the governor or the governor's staff that would be meeting with system administration and talking to them about what they would be interested in doing."

UWM Interim Chancellor Mike Lovell, who attended the meeting with Walker, wasn't ready to weigh in on whether UW-Madison leaving the UW System would help or harm the Milwaukee campus, UWM spokesman Tom Luljak said.

School leaders have been told that Walker's plan would at least loosen some of the administrative red tape that university leaders have complained about.

But officials also have been told they could face budget cuts as steep as those Democratic Gov. Jim Doyle imposed during his first term. About $250 million was cut from the system during that period, system officials said.

Bill Glauber and Patrick Marley, both reporting from Madison, of the Journal Sentinel staff contributed to this report.