UWM Budget Model Development Update UNIVERSITY OF WISCONSIN MILWAUKEE

UWM Budget Model Development Update UNIVERSITY OF WISCONSIN MILWAUKEE

Budget Model Update Update Outline Overview of Current Budget Model Need and Development Project Plan Requirements & Campus Input Review of New Budget Model Desired Features Review of BMWG Recommended Model Adjustments Overview of Model Testing Process Summary of Results of Testing Model & Lessons Learned Key Implication Next Steps?

Overview of Current Model Why a New Budget Model Current incremental budget model unable to effectively respond to: Changes in the higher education landscape: Shrinking state support Growing reliance on tuition revenue Declining or stagnant enrollments Emerging opportunities for UWM New initiatives: e.g. Fresh Water Sciences and Public Health Partnerships with the business community Expansion of campus physical footprint

Project Plan Overview of Current Model Lead Role Budget Model Working Group Budget Model Working Group Budget Model Working Group Budget Model Working Group Budget Model Working Group Budget Model Working Group Establish guiding principles Requirements gathering: campus input Review and evaluation of alternate approaches to resource allocation Define a basic resource allocation approach Develop budget model changes that will become the framework for new a resource allocation approach Campus leadership approves a conceptual framework Supporting Role Consultant BMST Consultant BMST Consultant BMST Phase 1: Data Gathering Phase 2: Develop basic Framework BMST Develop, test and propose budget model Budget Model Working Group Phase 1: Requirements and Best Practices Data Gathering Phase 2: Development and Approval of the Resource Allocation Framework Phase 3: Testing the Proposed Model (Where we are today) Phase 3: Model Testing Phase 4: Implementation BMST Approve a working budget model for presentation and review by campus community Develop an implementation plan for approved budget model Budget Model Working Group Budget Model implementation Team Phase 4: Implementation of the New Mode

Overview of Current Model Current Model Concerns: 1. Not responsive enough to overall enrollment declines 2. Developed piecemeal without regard to an overall strategy 3. Provides insufficient incentives to grow 4. Complicated and hard to understand 5. Difficult to link activities and their related costs Spaghetti Model - Flow Chart of Current Resource Allocation

DESIRED FEATURES OF THE MODEL A New Model should be: Flexible enough to adjust to the evolving landscape of higher education and the evolving needs of the UWM campus community Predictive to allow campus units to anticipate their future resource allocations and, subsequently, set long term goals. Simple and easily understood by the campus community Incentivizing for desired behaviors and outcomes Inclusive of the viewpoints of campus leadership and governance groups Strategic in nature

Recommended Adjustments Summary of Changes #1 Distinguish between the flow of state appropriations and tuition revenue. Use state appropriations to primarily fund non-academic support functions #2 Create a Subvention fund to: a. Support Academic Units b. Help fund Support units c. Help soften the impact of sudden enrollment downturns d. Provide means for exploring new strategic opportunities #3 Subvention Pool Funding: 1. 20% of unrestricted Tuition revenue to subvention Pool, 80% distributed to Schools and Colleges. 2. 80% of Federal Indirect cost recoveries should flow back to school/colleges and 20% into the subvention pool 3. 100% of unrestricted State Appropriations to subvention pool #3 Pool and Distribute undergraduate tuition & academic fee revenue based on: credit-granting school/college degree majors degrees awarded

Test Environment 1. All Funds Approach Fund Category GPR Model Testing Process Fund # Fund Description 101 General Program Operations: Doctoral Universities 104 General Program Operations: University Extension 109 General Program Operations: Energy Costs 110 General Program Operations: Principal Repayment & Interest 402 General Program Operations: Minority and Disadvantaged Programs 403 General Program Operations: Advanced Opportunity Program 406 General Program Operations: Lawton Minority Undergrad Retention Grant Program 131 General Program Operations: Academic Student Fees & Differential Tuition Tuition General Program Operations: Extension Student Fees, Special Course Fees & Fees in 189 Lieu of Tuition Auxiliary 128 User Fees, Special Course Fees & Student Segregated Fees 228 Debt Service General Ops 136 Other Operating Receipts. Examples: ESL, Remedial, etc. Fed Indirect 150 Federal Indirect Costs Reimbursement Other Restricted 123 Principal Repayment (Debt Service) 132 General Operations Receipts: Non-Credit Outreach 181 Program Revenue: Great Lakes Studies 184 Program Revenue: License Plate Scholarship Program 133 Non-Federal Grants and Contracts 134 Gifts-Student Loans 144 Federal Grants and Contracts 145 Federal Aid- Work Study 161 Trust Fund Income 190 Solid Waste Research & Experiments 233 Gifts - General 100

Model Testing Process Test Environment Organization of Affected Units Academic Affairs 05 - Academic Affairs 34 - Office of Research 35 - Graduate School 50 - Library 97 - Academic Support 10 - Health Sciences 11 - Architecture & Urban Planning 12 - Business 17 - Education 19 - Engineering 21 - Arts 25 - Freshwater Sciences 48 - Letters & Science 51 - Information Studies 65 - Nursing 70 - Public Health 86 - Social Welfare 90 - Continuing Education Central Admin Support 01 - General Educ Admin 02 - Finance & Admin Affairs 40 - UITS Student Affairs 03 - Student Affairs Campus Wide Functions 98 - Unitwide

Test Environment Model Testing Process Current State: 1. Fiscal Year 2013-14 Data (Total = $516M) 2. State Appropriation & Tuition are Combined into the GPR/Fee Pool ($234M), i.e. Fund 101 3. Tuition consists of a. 189 Revenue ($34M) b. 131 Tuition not Included in the GPR/Fee Pool Fund 101 ($38M) 4. Tuition Distribution Reflects Marginal Tuition Distribution Model 5. Hold Harmless all campus units

Grand Total 274,155,796 71,751,549 86,615,250 10,735,436 9,745,378 4,387,857 58,408,796 515,800,061 Model Testing Process Summary - All Funds FY 2013-14 Actual Modified Unrestricted Restricted Total Division GPR Tuition Auxiliary General Ops Fed Indirect Other Current 13-14 Central Admin Support 01 - General Educ Admin 7,266,971 1,305,129 48,500 129,230 - - 378,272 9,128,102 02 - Finance & Admin Affairs 35,551,266-7,913,250 (1,289,563) 933,292-863,724 43,971,969 40 - UITS 7,656,394 1,451,500 1,351,344 1,161,167 109,305-11,259 11,740,969 Total - Central Admin Support 50,474,631 2,756,629 9,313,094 834 1,042,597-1,253,254 64,841,039 Student Affairs 03 - Student Affairs 4,283,884 5,361,942 70,387,357 1,724,313 4,606 4,924 2,944,283 84,711,310 Total - Student Services 4,283,884 5,361,942 70,387,357 1,724,313 4,606 4,924 2,944,283 84,711,310 Academic Affairs 05 - Academic Affairs 10,223,651 1,668,706 2,283,473 1,287,666 84,108 4,373 3,235,139 18,787,116 34 - Office of Research 2,391,595 - - (63,179) 538,669 - (69,326) 2,797,758 35 - Graduate School 3,633,009 - - 139,229 1,552,418-890,722 6,215,378 50 - Library 7,916,495 - - 88,097 222,914-333,616 8,561,123 97 - Academic Support 3,671,100 - - - - - - 3,671,100 Total - Academic Support 27,835,850 1,668,706 2,283,473 1,451,813 2,398,109 4,373 4,390,151 40,032,475 10 - Health Sciences 8,804,818 2,067,651 6,230 208,615 252,956 177,338 1,861,408 13,379,016 11 - Architecture & Urban Planning 3,696,415 845,802 3,390 73,824 42,385 19,900 375,337 5,057,052 12 - Business 12,056,480 2,029,990-2,285,690 213,331-966,787 17,552,277 17 - Education 8,571,587 2,858,011 19,535 486,194 248,052 61,470 3,603,343 15,848,192 19 - Engineering 12,272,224 1,523,398-232,655 528,966-7,084,608 21,641,851 21 - Arts 9,778,226 2,404,004 224,906 516,091 171,442 133,668 428,030 13,656,366 25 - Freshwater Sciences 2,532,815 - - 182,700 276,834 48,983 4,485,087 7,526,419 48 - Letters & Science 37,712,350 24,872,962 113,338 2,189,234 2,327,041 (839) 21,766,420 88,980,506 51 - Information Studies 2,663,259 1,913,504-419,500 46,193 25,000 233,208 5,300,664 65 - Nursing 6,674,860 1,352,661 159,560 439,597 175,621-1,506,102 10,308,401 70 - Public Health 2,394,167 15,284-32,535 88,623-1,329,086 3,859,695 86 - Social Welfare 3,537,431 369,760 8,920 274,054 270,919 28,900 4,885,939 9,375,923 90 - Continuing Education 3,035,450 127,892 313,200 123,821 38,490 3,857,417 1,323,874 8,820,143 Total - Schools & Colleges 113,730,082 40,380,919 849,079 7,464,510 4,680,851 4,351,836 49,849,228 221,306,505 Total - Academic Affairs 141,565,932 42,049,625 3,132,552 8,916,323 7,078,960 4,356,209 54,239,379 261,338,980 Campus Wide Functions 98 - Unitwide 77,831,349 21,583,353 3,782,247 93,966 1,619,214 26,724 (28,121) 104,908,732 Total - Campus Wide Functions 77,831,349 21,583,353 3,782,247 93,966 1,619,214 26,724 (28,121) 104,908,732

Summary of Test Results Treatment of GPR/Fee Pool What We Learned Redbook GPR/Fee Total (All Funds) = $274M Of this $122M is State Tax Appropriation $152M is Tuition Revenue Distribution of the $122M State Tax Appropriation $122M GPR (All Funds) budget -$2M Fund 104 Special Purpose University Extension (restricted) -$12M Fund 109 Special Purpose - Utility Funds (restricted) -$18M Fund 110 Special Purpose - Debt Service (restricted) -$2M Fund 403 Spec. Purpose - Advanced Opportunity Program (restricted) -$2M Fund 406 Spec. Purpose Minority Retention Grants (restricted) -$3M Fund 402 Spec. Purpose Minority & Disadvantaged Prog. (restricted) -$481K Fund 150 Historic Swap (restricted) $82M Fund 101 General Operating Funds Of the $82M - $66M is budgeted for GPR Fringe Benefits (restricted)! Leaving only $16M in general purpose (unrestricted) State Appropriations!

Summary of Test Results Distribution of Fringe Benefit Funding & Expenses Distribution of the Funds 101 & 402 Fringe Benefit Pool Distributing $61M of the budgeted $66M $5M is retained in Unit Wide for end of year reconciliation Historically managed by Central Administration as part of the Unit Wide account Not originally contemplated but done in the spirit of transparency Summary - All Funds 101 GPR Fringe Benefit Allocations 402 GPR Fringe Benefit Allocations Modified Unrestricted Modified Unrestricted Division GPR GPR Central Admin Support 01 - General Educ Admin 2,975,878 47,545 02 - Finance & Admin Affairs 8,250,460-40 - UITS 2,604,028 - Total - Central Admin Support 13,830,366 47,545 Student Services 03 - Student Affairs 756,040 113,949 Total - Student Services 756,040-113,949 Academic Functions 05 - Academic Affairs 2,372,997 447,139 34 - Office of Research 647,704-35 - Graduate School 428,561-50 - Library 1,599,994-97 - Academic Support 291,244 - Total - Academic Support 5,340,501 447,139 10 - Health Sciences 2,777,959-11 - Architecture & Urban Planning 1,384,358-12 - Business 4,491,728-17 - Education 3,062,766 4,669 19 - Engineering 4,035,719 42,887 21 - Arts 3,518,951-25 - Freshwater Sciences 940,511-48 - Letters & Science 13,332,219 186,335 51 - Information Studies 984,125-65 - Nursing 2,418,050-70 - Public Health 811,702-86 - Social Welfare 1,298,975-90 - Continuing Education 406,897 1,222 Total - Schools & Colleges 39,463,960 235,113 Total - Academic Functions 44,804,461 682,252 Campus Wide Functions 98 - Unitwide 988,410 3,998 Total - Campus Wide Functions 988,410-3,998 Grand Total 60,379,276 847,744

Summary of Test Results Treatment of GPR/Fee Pool What We Learned Of the $122 in State Appropriation, $106 is allocated as restricted with only $16 was available for the Subvention Fund

Model Testing Process Distribution of Restricted Funding Division Restricted GPR Other Restricted Central Admin Support 01 - General Educ Admin 3,148,542-378,272 02 - Finance & Admin Affairs 20,420,555-863,724 40 - UITS 2,604,028-11,259 Total - Central Admin Support 26,173,125-1,253,254 Student Services 03 - Student Affairs 3,441,953 4,924 2,944,283 Total - Student Services 3,441,953 4,924 2,944,283 Academic Functions 05 - Academic Affairs 4,032,363 3,499 3,235,139 34 - Office of Research 647,704 - (69,326) 35 - Graduate School 2,353,461-890,722 50 - Library 1,599,994-333,616 97 - Academic Support 291,244 - - Total - Academic Support 8,924,766 3,499 4,390,151 10 - Health Sciences 2,777,959 141,870 1,861,408 11 - Architecture & Urban Planning 1,394,234 15,920 375,337 12 - Business 4,491,728-966,787 17 - Education 3,087,157 49,176 3,603,343 19 - Engineering 4,187,394-7,084,608 21 - Arts 3,518,951 106,934 428,030 25 - Freshwater Sciences 940,511 48,983 4,485,087 48 - Letters & Science 14,024,252 (671) 21,766,420 51 - Information Studies 984,125 20,000 233,208 65 - Nursing 2,445,704-1,506,102 70 - Public Health 811,702-1,329,086 86 - Social Welfare 1,298,975 23,120 4,885,939 90 - Continuing Education 2,713,844 3,085,933 1,323,874 Total - Schools & Colleges 42,676,535 3,491,265 49,849,228 Total - Academic Functions 51,601,301 3,494,764 54,239,379 Campus Wide Functions 98 - Unitwide 25,386,430-1,338,990 Total - Campus Wide Functions 25,386,430-1,338,990 Grand Total 106,602,810 3,499,688 59,775,907

Treatment of GPR/Fee Pool What We Learned Summary of Test Results Tuition Revenue Budgeted in GPR/Fee Pool Fund 101 $152M Other 131 Tuition Revenue $38M 189 Tuition Revenue $34M All Tuition Revenue $224M Of The $224M $41M Goes into Subvention Pool $182 is distributed to Schools/Colleges

Summary of Test Results Distribution of Facilities & Administrative Costs Recovery 80% of Federal Indirect cost recoveries should flow back to school/colleges and 20% into the subvention pool. $2M into Subvention Pool $8M distributed to Schools and Colleges

Summary of Test Results Distribution of Auxiliary Revenues and General Operations (Miscellaneous) Revenues Tax into subvention pool based on historically set amounts. $4M into Subvention Pool $79M to Non-Academic Support & Campus Overhead $3M to Academic Support $11M to Schools & Colleges w Continuing Ed

Summary of Test Results Summary of Funding Allocation s Pre- Subventio n Allocation s $453M in Base Distributions Summary - All Funds New Model Unadjusted Allocations (+ GPR Fringe Allocations) Modified Unrestricted Restricted Total General Ops Indirects Other Base - New Model Division GPR Tuition Auxiliary Central Admin Support 01 - General Educ Admin 3,148,542-48,500 129,230 - - 378,272 3,704,544 02 - Finance & Admin Affairs 20,420,555-7,913,250 (1,289,563) - - 863,724 27,907,966 40 - UITS 2,604,028-1,351,344 1,161,167 - - 11,259 5,127,798 Total - Central Admin Support 26,173,125-9,313,094 834 - - 1,253,254 36,740,308 Student Services 03 - Student Affairs 3,441,953-70,387,357 1,724,313 12,284 4,924 2,944,283 78,515,115 Total - Student Services 3,441,953-70,387,357 1,724,313 12,284 4,924 2,944,283 78,515,115 Academic Functions 05 - Academic Affairs 4,032,363-2,283,473 1,287,666 224,289 3,499 3,235,139 11,066,428 34 - Office of Research 647,704 - - (63,179) - - (69,326) 515,199 35 - Graduate School 2,353,461 - - 139,229 9,560-890,722 3,392,972 50 - Library 1,599,994 - - 88,097 11,478-333,616 2,033,185 97 - Academic Support 291,244 - - - - - - 291,244 Total - Academic Support 8,924,766-2,283,473 1,451,813 245,327 3,499 4,390,151 17,299,029 10 - Health Sciences 2,777,959 12,680,652 6,230 208,615 280,934 141,870 1,861,408 17,957,668 11 - Architecture & Urban Planning 1,394,234 4,778,029 3,390 73,824 19,692 15,920 375,337 6,660,425 12 - Business 4,491,728 27,743,920-2,285,690 35,548-966,787 35,523,673 17 - Education 3,087,157 13,207,657 19,535 486,194 386,806 49,176 3,603,343 20,839,867 19 - Engineering 4,187,394 10,904,947-232,655 1,559,726-7,084,608 23,969,330 21 - Arts 3,518,951 13,151,702 224,906 516,091 3,844 106,934 428,030 17,950,459 25 - Freshwater Sciences 940,511 177,382-182,700 722,933 48,983 4,485,087 6,557,596 48 - Letters & Science 14,024,252 77,707,765 113,338 2,189,234 3,594,777 (671) 21,766,420 119,395,115 51 - Information Studies 984,125 6,662,836-419,500 3,180 20,000 233,208 8,322,849 65 - Nursing 2,445,704 7,870,596 159,560 439,597 182,280-1,506,102 12,603,839 70 - Public Health 811,702 387,115-32,535 209,662-1,329,086 2,770,101 86 - Social Welfare 1,298,975 6,866,113 8,920 274,054 435,872 23,120 4,885,939 13,792,992 90 - Continuing Education 2,713,844 (173,122) 313,200 123,821 103,438 3,085,933 1,323,874 7,490,988 Total - Schools & Colleges 42,676,535 181,965,592 849,079 7,464,510 7,538,691 3,491,265 49,849,228 293,834,901 Total - Academic Functions 51,601,301 181,965,592 3,132,552 8,916,323 7,784,018 3,494,764 54,239,379 311,133,929 Campus Wide Functions 98 - Unitwide 25,386,430 - - - - - 1,338,990 26,725,420 Total - Campus Wide Functions 25,386,430 - - - - - 1,338,990 26,725,420 Grand Total 106,602,810 181,965,592 82,833,003 10,641,470 7,796,302 3,499,688 59,775,907 453,114,772

Summary of Funding Allocations Summary of Test Results Pre-Subvention Allocations $453M in Base Distributions a. $294M to Schools & Colleges and Continuing Ed b. $17M to Academic Support c. $142M to Non-Academic Support & Campus Overhead

Summary of Test Results Base Allocation to Schools and Colleges Tuition Revenue A. Undergrad Tuition Revenue - Pool and Distribute undergraduate tuition & academic fee revenue based on: 70% credit-granting school/college 20% degree majors 10% degrees awarded B. Distribute graduate tuition revenue based100% on school/college of enrollment Tuition Division Distribution 10 - Health Sciences 12,680,652 11 - Architecture & Urban Planning 4,778,029 12 - Business 27,743,920 17 - Education 13,207,657 19 - Engineering 10,904,947 21 - Arts 13,151,702 25 - Freshwater Sciences 177,382 48 - Letters & Science 77,707,765 51 - Information Studies 6,662,836 65 - Nursing 7,870,596 70 - Public Health 387,115 86 - Social Welfare 6,866,113 90 - Continuing Education (173,122) Total - Schools & Colleges 181,965,592

Summary of Test Results Base Allocation to Schools and Colleges Summary - All Funds New Model Base Allocations (+ GPR Fringe Allocations) Modified Unrestricted Restricted Total Base Allocations Division GPR Tuition Auxiliary General Ops Indirects Other 10 - Health Sciences 2,777,959 12,680,652 6,230 208,615 280,934 141,870 1,861,408 17,957,668 11 - Architecture & Urban Planning 1,394,234 4,778,029 3,390 73,824 19,692 15,920 375,337 6,660,425 12 - Business 4,491,728 27,743,920-2,285,690 35,548-966,787 35,523,673 17 - Education 3,087,157 13,207,657 19,535 486,194 386,806 49,176 3,603,343 20,839,867 19 - Engineering 4,187,394 10,904,947-232,655 1,559,726-7,084,608 23,969,330 21 - Arts 3,518,951 13,151,702 224,906 516,091 3,844 106,934 428,030 17,950,459 25 - Freshwater Sciences 940,511 177,382-182,700 722,933 48,983 4,485,087 6,557,596 48 - Letters & Science 14,024,252 77,707,765 113,338 2,189,234 3,594,777 (671) 21,766,420 119,395,115 51 - Information Studies 984,125 6,662,836-419,500 3,180 20,000 233,208 8,322,849 65 - Nursing 2,445,704 7,870,596 159,560 439,597 182,280-1,506,102 12,603,839 70 - Public Health 811,702 387,115-32,535 209,662-1,329,086 2,770,101 86 - Social Welfare 1,298,975 6,866,113 8,920 274,054 435,872 23,120 4,885,939 13,792,992 90 - Continuing Education 2,713,844 (173,122) 313,200 123,821 103,438 3,085,933 1,323,874 7,490,988 Total - Schools & Colleges 42,676,535 181,965,592 849,079 7,464,510 7,538,691 3,491,265 49,849,228 293,834,901

Summary of Test Results Distribution of Subvention Funds What we Learned Recall Model Test Environment: HOLD ALL UNITS HARMLESS Use Subvention Fund to return all units to their actual FY14 Funding Levels Subvention need for specific School/Colleges = $7.4M School/Colleges Allocations Summary - All Funds FY14 Actual Total Budget Subvention Need Division Base Allocations (+Fringes) (Under) 10 - Health Sciences 17,957,668 16,156,975 11 - Architecture & Urban Planning 6,660,425 6,441,409 12 - Business 35,523,673 22,044,006 17 - Education 20,839,867 18,915,627 19 - Engineering 23,969,330 25,720,457 1,751,127 21 - Arts 17,950,459 17,175,318 25 - Freshwater Sciences 6,557,596 8,466,930 1,909,334 48 - Letters & Science 119,395,115 102,499,061 51 - Information Studies 8,322,849 6,284,789 65 - Nursing 12,603,839 12,726,451 122,612 70 - Public Health 2,770,101 4,671,398 1,901,297 86 - Social Welfare 13,792,992 10,674,897 90 - Continuing Education 7,490,988 9,228,261 1,737,273 Total - Schools & Colleges 293,834,901 261,005,578 7,421,643

Summary of Test Results Distribution of Subvention Funds What we Learned Recall Model Test Environment: HOLD ALL UNITS HARMLESS Use Subvention Fund to return all units to their actual FY14 Funding Levels Subvention need for the Academic Support Units = $28.5M Summary - All Funds Division Academic Support Total FY14 Actual Budget Subvention Need Base Allocations (+Fringes) (Under) 05 - Academic Affairs 11,066,428 21,607,253 10,540,825 34 - Office of Research 515,199 3,445,463 2,930,264 35 - Graduate School 3,392,972 6,643,939 3,250,967 50 - Library 2,033,185 10,161,116 8,127,931 97 - Academic Support 291,244 3,962,344 3,671,100 Total - Academic Support 17,299,029 45,820,116 28,521,087

Summary of Test Results Distribution of Subvention Funds What we Learned Recall Model Test Environment: HOLD ALL UNITS HARMLESS Use Subvention Fund to return all units to their actual FY14 Funding Levels Subvention need for the Non- Academic Support Units = $67M Summary - All Funds FY14 Actual Budget Subvention Need Total Base Division Allocations (+Fringes) (Under) Central Admin Support 01 - General Educ Admin 3,704,544 12,151,525 8,446,981 02 - Finance & Admin Affairs 27,907,966 52,222,429 24,314,463 40 - UITS 5,127,798 14,344,997 9,217,199 Total - Central Admin Support 36,740,308 78,718,951 41,978,643 Student Services 03 - Student Affairs 78,515,115 85,581,299 7,066,184 Campus Wide Functions Non-Academic Support 98 - Unitwide 26,725,420 44,674,119 17,948,699 Total Non-Academic Support 141,980,842 208,974,368 66,993,526

Summary of Test Results Distribution of Subvention Funds What we Learned Summary Recall Model Test Environment: HOLD ALL UNITS HARMLESS Use Subvention Fund to return all units to their actual FY14 Funding Levels Total Subvention Fund Needs: Select Schools/Colleges = $7M Academic Support = $28M Non-Academic Support = $67M Total Subvention Need = $102M Calculated Subvention Pool = $63M! Not Enough to Cover all Needs! Need additional $40M.

Summary of Test Results Distribution of Subvention Funds What we Learned Recall Model Test Environment: HOLD ALL UNITS HARMLESS Use Subvention Fund to return all units to their actual FY14 Funding Levels The additional needed funding ($40M) resides with the schools/colleges Summary - All Funds FY14 Actual Budget Base Allocation Over Total Base Allocations (+Fringes) Actual Budget Division 10 - Health Sciences 17,957,668 16,156,975 1,800,693 11 - Architecture & Urban Planning 6,660,425 6,441,409 219,016 12 - Business 35,523,673 22,044,006 13,479,667 17 - Education 20,839,867 18,915,627 1,924,240 19 - Engineering 23,969,330 25,720,457 21 - Arts 17,950,459 17,175,318 775,141 25 - Freshwater Sciences 6,557,596 8,466,930 48 - Letters & Science 119,395,115 102,499,061 16,896,054 51 - Information Studies 8,322,849 6,284,789 2,038,060 65 - Nursing 12,603,839 12,726,451 70 - Public Health 2,770,101 4,671,398 86 - Social Welfare 13,792,992 10,674,897 3,118,095 90 - Continuing Education 7,490,988 9,228,261 Total - Schools & Colleges 293,834,901 261,005,578 40,250,966

Summary of Test Results Key Implication Recall Model Test Environment: HOLD ALL UNITS HARMLESS Option A Contemplated methods for making all units whole Provost (and advisors) uses additional $40M allocated to the 8 schools and colleges to: Subsidize those schools needing additional funds Fund the Academic Support Functions Provide subsidy to Nonacademic support functions

Key Implication Summary of Test Results Recall Model Test Environment: HOLD ALL UNITS HARMLESS Option B Contemplated methods for making all units whole Increase the size of the subvention pool by raising tax on tuition revenue to 40% Subvention Pool grows to $109M to meet all subvention needs Tuition Pool for Schools/Colleges shrinks from $182M to $137M More schools/colleges will need subvention funding (from $7M in need to $12M in need)

Key Implication Summary of Test Results Recall Model Test Environment: HOLD ALL UNITS HARMLESS Option C Contemplated methods for making all units whole Establish 3 Taxes on Tuition Revenues 1. Tax to Help Fund Subvention Fund for Schools/Colleges needing help and future strategic initiatives 2. Tax to help fund Academic Support Functions (~13% or $27M) 3. Tax to help fund Non-Academic

Summary of Test Results Remaining Decision - Summary Recall Model Test Environment: HOLD ALL UNITS HARMLESS Contemplated methods for making all units whole Option A Option B Option C Provost retains additional $40M allocated to the 8 schools and colleges to a. Provide funding to the Schools/Colleges needing support b. Provide funding to Academic Support functions c. Provide subsidy to Non-academic support units Increase the size of the taxes on Tuition to Create a Subvention Pool large enough to meet all subvention Needs. Have 3 Taxes 1- Fund to support Schools and Colleges needing additional support beyond base allocation and future strategic initiatives 2- Funding for Academic Support Units 3- Funding for Non- Academic Support Units

Next Steps Action Presentation of Proposed Model to UWM Campus Community for Input Reconvene BMWG to Review Campus Input and Draft Final Recommendation for Chancellor Chancellor Reviews Proposed Model and Approves or Not- Approves If Approved, Parallel New Resource Allocation Model with Current Model for FY2017 Budget Development Cycle 1 st Meeting of Campus Leadership to Plan Resource Allocations for the FY2018 Budget Full Implementation of New Resource Allocation Model for Building of FY2018 Budget UWM Under New Resource Allocation Model Due Date Summer & Fall 2015 Fall 2015 Winter 2015 Winter 2016 & Spring Summer 2016 Fall 2016 & Winter 2017 Summer 2017