Bipartisan Partners

Photos: Jeff Miller (left); Bryce Richter

Chancellor Biddy Martin believes that UW-Madison can help Wisconsin on the road to financial stability. The best path, she says, lies in greater flexibility for the university.

Biddy Martin PhD’85 has spent her entire career in higher education, and the experience has taught her to keep an eye on her peer institutions.

“The university,” she says, “is not just another state agency.”

Lately she’s been saying this often — to alumni, faculty, students, donors, and especially state politicians. She wants them to remember this message, because she senses change in the air.

“The financial model for public research universities is broken,” she says, and this “requires changes in the traditional partnership” between state governments and the schools they sponsor. This is true all over the United States, she believes, though her focus is on UW-Madison, where a decreasing share of the budget derives from state funds.

As recently as fifteen years ago, money from state tax revenue accounted for some $333.9 million, more than 30 percent of UW-Madison’s budget. By 2009–10, the number of state dollars increased to $457 million, but the amount supporting core mission activities has declined. Further, the university’s budget has grown faster than state contributions, and today the state’s contribution is only about 18 percent of UW-Madison’s income. Because Wisconsin faces a looming budget deficit as it tries to climb out of the recession, the percentage of state funding is likely to decrease in the foreseeable future.

And so Martin is proposing that the UW and Wisconsin rewrite their relationship. Over the last few months, she has been talking about a new partnership — the New Badger Partnership (NBP), as she calls it — in every forum she can find: through articles and interviews; in speeches to students, faculty, and staff; and in conversations with alumni, business leaders, and the leadership of Wisconsin’s state government.

The essence of the partnership is that the state and its flagship university should work hand in glove to improve the general wealth and welfare of the state and its citizens. To that end, NBP would aim to make the university better able to deal with reductions by offering increased flexibility. It’s a partnership, Martin believes, that would make people happier at both ends of State Street.

The New Badger Partnership is centered on flexibility: to gain more control over its own revenue and expenses, the university would like to have greater ability to manage its budget, especially in four areas: tuition authority, governing personnel and salaries, managing contracts for construction and capital projects, and procuring supplies and equipment. But if the proposal is new, the four requests embedded in it aren’t; UW-Madison has desired change in each of these areas for decades.

“The New Badger Partnership includes things the university has wanted for a long time,” says Darrell Bazzell ’84, UW-Madison’s vice chancellor for administration and the person who oversees issues of personnel and budgeting. “But this is the first time we’ve made a strong case for an integrated, comprehensive plan.”

Bazzell was part of the committee that conceived of NBP, a group that included Vince Sweeney ’78, UW- Madison’s vice chancellor for university relations. The group began work nearly two years ago, as the depth of the recession was becoming clear and as the political situation in the Capitol became less stable.

“This really began shortly after Governor [Jim] Doyle [’67] announced he wasn’t running for re-election, back in August of 2009,” says Sweeney. “We saw that this was an opportunity: for the first time in many years, we knew for certain that there would be a new administration, whichever side won the [2010 gubernatorial] election. We knew that we would have the chance to establish a new relationship with each candidate, and we knew that there would be a fight over the budget. We wanted to prevent UW-Madison from being made into a political football during the budget process.”

That budget process promises to be difficult. According to an analysis by Andrew Reschovsky, a professor in the UW’s La Follette School of Public Affairs, Wisconsin faces a deficit that may be as large as $3 billion over the coming biennium, more than 10 percent of the state budget’s general fund each year.

Knowing that Wisconsin would face a sizable deficit, Sweeney, Bazzell, and others looked at what UW-Madison might want and need, and at ways that public universities in other states were dealing with their own legislatures and similar financial difficulties. (See chart, below.) They found that other states were responding to budget crises by trying to operate more efficiently. Picking the items they liked from among these state’s plans “almost a la carte,” according to Sweeney, they found options that could aid the UW.

“We knew there would be no more money coming from the legislature,” he says, “so we figured the answer was to ask for flexibility.”

Over the following months, they sought input from various parties — students, faculty, donors, and legislative candidates. “They all seemed intrigued,” Sweeney says.

From December 2009 through February 2010, as Wisconsin’s gubernatorial race was heating up, Martin met one-on-one with the three leading candidates, Democrat Tom Barrett ’76, JD’80, and Republicans Mark Neumann and eventual winner Scott Walker, and shared her vision. Throughout these conversations, Martin made sure to point out that the UW wants to cooperate with the legislature — not obstruct it — and that it can be an asset to Wisconsin’s economy, not a drain for dollars.

“I … emphasized the importance of UW-Madison’s economic role in the state, the fact that we are a thriv- ing export business for Wisconsin, bringing in well over a billion dollars a year from outside the state, creating public- and private-sector jobs with our research and discovery,” she says. She found a receptive audience and says that Walker “seemed committed to bold ideas about how to grow the state’s economy, create jobs, and take advantage of the asset that higher education represents.”

As Walker and his new Republican majority approach the task of tackling a state budget for the 2011–13 biennium, proponents of the New Badger Partnership hope that they have opened the door to negotiating a better relationship between the state and university.

“The idea was not to develop a plan and put it on the table,” Sweeney says. “Rather, we wanted to put some ideas out as a way of shaping the conversation. We wanted people to think about what we need to do to preserve and protect the university as a world-class institution.”

As a result, NBP is far from a detailed program. Instead, it currently exists as a set of principles, to which Martin, Sweeney, and the partnership’s supporters hope the new governor and his legislative allies will respond favorably

Flexibility, NBP backers argue, will enable the university to reap financial dividends. For example, notes Alan Fish MS’01, UW-Madison’s vice chancellor for facilities planning and management, consider the university’s Microbial Sciences building, which opened in September 2007 to great fanfare. Microbial Sciences is a $121.3 million, state-of-the-art facility for conducting microbiology, immunology, and food safety research — and a key element in the state’s BioStar Initiative, an effort launched more than a decade ago by Governor Tommy Thompson ’63, JD’66 aimed at making Wisconsin a center for research in biology and biotechnology.

As with all state construction projects, regulations specified that the UW had to request separate bids from contractors for construction, electrical work, plumbing, and mechanical systems, and then take the lowest bid for each job. The rules are designed to save state money by taking the least expensive contractors, but in practice, they sowed confusion and produced a bureaucratic headache. When the university took possession of Microbial Sciences, it discovered that the work done didn’t meet the needs of the scientists whose labs were to be located there.

“It took us fourteen months and $1 million to fix the errors,” says Fish. He believes that NBP, by freeing the university from state rules on hiring contractors, could avoid repeating such mistakes.

Still, the key to convincing Walker and legislative leaders to support NBP is making them see UW-Madison as Martin does: as not just another state agency. NBP proponents argue that a more flexible university would not only help ease the state’s budget woes; it would also foster a higher-quality institution. The university faces forms of competition that the rest of state government doesn’t, and the UW wants to keep the student, faculty, and research talent that will let it thrive.

“Think of the Department of Natural Resources, for example,” says Sweeney. “Wisconsin’s DNR isn’t competing with Illinois’ DNR. But the UW is in direct competition not only with the University of Illinois in Champaign, but with the best universities all over the world — for faculty, for students, for federal dollars, and for private sector dollars. We’re in a very competitive marketplace. With the DNR, other states aren’t trying to actively recruit their leadership, but other institutions around the world are trying to recruit ours. To maintain excellence, we have to be able to better deal with that competition for talent.”

And excellence is ultimately what the university believes it offers the state. “The UW has an important impact in the state of Wisconsin, an economic impact,” Sweeney says. “The $1 billion in research funding we brought in last year — that’s money brought into the state, jobs that we’ve created. The point of the New Badger Partnership is to try to preserve that impact, because Madison really is part of the solution.”

Martin believes that the need for change in Wisconsin’s relationship to its flagship university is growing more acute.

“Given the state’s budget deficit, global economic changes, and the state’s consequent need for a world-class research university as it builds its knowledge-based industries, it is time to do more than tinker on the edges,” she says. “The state needs bold thinking about how it can preserve the quality of UW-Madison, one of its primary economic drivers.”

John Allen is senior editor for On Wisconsin.

Published in the Spring 2011 issue