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Madison — Gov. Scott Walker on Friday proposed freezing the University of Wisconsin System tuition for another two years, adding on to a similar hard cap enacted last year.

The GOP governor said he was extending the freeze in light of projections released Thursday showing that the UW System still expects more than $1 billion in cash balances in June despite efforts by state officials to substantially lower it.

In doing so seven months out from his re-election bid, Walker is pushing a proposal that won support last year from liberal student groups, Republican lawmakers and even some Democrats.

Speaking to reporters in Milwaukee on Friday, Walker made it clear that the proposed tuition freeze was tied directly to projections that UW campuses will end the year with significant cash reserves built up in part through repeated increases in tuition over more than a decade.

He said he believes the money should be used to help students by freezing how much they pay to attend UW campuses.

"In light of the fact that they still have a sizable surplus, we think it makes sense going forward," Walker said of the proposal to extend the freeze and try to make college more affordable. "Most people weren't seeing their wages go up anywhere near what tuition was in the past."

Walker made the proposal while the UW System Board of Regents was wrapping up a two-day meeting in River Falls, catching the system's top leader off guard.

Newly appointed UW System President Ray Cross said he wouldn't have been surprised if Walker called for a one-year tuition freeze but hadn't expected a two-year freeze.

Cross said he contacted Walker's staff about a month and a half ago and said that based on December's cash balances, he might be open to extending the current tuition freeze to the 2015-'16 school year.

"It was a very casual thing," Cross said. "We didn't know where we were going to be the second year (of the current two-year budget), but I was feeling it would possibly be (an additional) one-year freeze."

Cross did not alert Walker in advance of Thursday's release of cash balances and projections, saying he had intended to share that information first with the UW System Board of Regents.

Legislative support

Democrat Mary Burke, Walker's challenger and a former state commerce secretary, has called for increasing state aid to the UW System to keep college affordable; increasing income tax deductions; and helping refinance student loans. Reacting to Walker's announcement, she showed openness to the idea of a freeze.

"Given the reserves that the UW System has, another short-term freeze is reasonable. But that doesn't address the long-term need for the UW System to remain a core driver of our state's economy and of ensuring access to higher education for Wisconsin students," Burke spokesman Joe Zepecki said. "Burke's proposals to make college more affordable will make education more accessible and provide certainty into the future — well beyond a two- or four-year freeze."

UW System officials were cautious about Walker's proposal. But GOP legislative leaders of the Assembly, Senate and budget committee immediately hailed the idea, making it clear that they would seek to enact the plan next year if they retain control of the Legislature as expected.

"An additional two-year tuition freeze makes sense following the budget report from the UW System. I expect that the Legislature will consider this option during the budget process next session while working with UW officials to maintain one of the finest university systems in the country," Assembly Speaker Robin Vos (R-Rochester) said in a statement.

When lawmakers and Walker approved a two-year freeze last year as part of the state budget, it marked the first two-year tuition freeze for the four-year campuses in the 42-year history of the UW System.

Before that, the last time students at the 13 four-year public universities saw a tuition freeze was more than 10 years ago, in the 2000-'01 academic year.

Tuition more than doubled within eight years as state tax support dramatically decreased and families were asked to pick up a much larger share of the cost of a college education. Increases in those years ranged from 5.5% to 16.7%.

Lost confidence

The early projections for the UW System's balances from tuition and other sources apart from state taxes for June 30 of this year are $1.256 billion in cash or assets easily converted to cash, slightly down from $1.273 billion in June 2013. That figure includes more than $1 billion in money that is not restricted and another $205 million that is.

But the university's "not restricted" label can be misleading. In fiscal 2013, 75% of those funds had been obligated for specific, planned purposes, or were categorized as reserves to give campuses a buffer from unexpected expenses and revenue losses, such as a drop in enrollment.

Cross said that in the current fiscal year, 80% of the $1.256 billion is committed on some level.

Of the amounts set aside for specific campuses, UW-Madison has a projected cash balance of $600.4 million, or nearly half of the projected gross surplus for the statewide system from tuition and other nontax sources. By contrast, UW-Milwaukee has $83.4 million.

Walker said he would consider cutting tuition in the future. But he also said he hoped holding the line on tuition, along with new accountability measures, would help restore people's confidence in the UW System, something he noted was lost last year when news of the large surplus leaked out.

Last year, the governor recommended increasing taxpayer funding for UW schools by $181 million over the next two years.

He reversed course and dropped most of the increase in the following months after learning the UW System had cash amounting to hundreds of millions of dollars — more than a quarter of its unrestricted budget — in thousands of accounts across campuses. The cash balance was uncovered by GOP lawmakers and nonpartisan legislative staff during an audit.

Campuses that are in a position to survive three to four years on cash balances — without requiring significant cuts — include Madison, La Crosse, Oshkosh, Platteville, Eau Claire and Whitewater, Cross said. A number of campuses — UW Colleges, Superior and Parkside — already are making cuts because they couldn't absorb the first-year reduction to their budgets prompted by the current two-year tuition freeze, he said.

UW-Madison Chancellor Rebecca Blank was out of town Friday, and UW-Madison spokesman John Lucas said that officials at the flagship campus were deferring to Cross and the Board of Regents on the question of tuition.

Blank previously has advocated for raising tuition for out-of-state students and for those attending professional schools to bring them more in line with peer institutions.

UWM spokesman Tom Luljak likewise deferred to Cross and the regents.

Jason Stein reported for this story in Madison with Karen Herzog and Daniel Bice reporting from Milwaukee.