Bill to renegotiate reciprocity with Minnesota could keep more tuition dollars in UW System

MADISON – A bill that would renegotiate the Wisconsin-Minnesota tuition reciprocity agreement and allow University of Wisconsin System schools to retain more tuition dollars amid financial strain is again moving through the state legislature. 

Under the proposal, the difference between what a Minnesota student pays to attend a UW System school and the Wisconsin in-state tuition rate would stay with the university. Currently, that amount is funneled into the state’s general fund, which pays back a portion to Minnesota.

In 2020, for example, $11.4 million in tuition money stayed in the state's general fund after Wisconsin paid out Minnesota's cut, according to the UW System. In 2021-22, UW-Madison alone could have brought in an additional $13.6 million.

Chancellors told lawmakers during a Thursday hearing that the measure would help campuses fund priorities like workforce development, rural outreach and innovation.

UW-River Falls Chancellor Maria Gallo said nearly 43% of her school's students come from Minnesota. The measure could bring an estimated $4.3 million more to the university.

"That is revenue that could we have reinvested in the university, meeting students' needs," Gallo said. "It would make a significant difference."

The Assembly Committee on Colleges and Universities unanimously approved the bipartisan measure two years ago, but it never received a full Assembly vote nor did the Senate take it up.

Rep. Dave Murphy, R-Greenville, an author of the bill and chair of the committee, called the measure "long overdue" and said he looks forward to getting it to the Assembly floor.

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Bill comes amid funding challenges

The potential new revenue source comes at a time of financial stress for the UW System, which released figures showing the university system heading toward a $60 million deficit by the end of 2023-24.

That includes $18.8 million in projected debt at UW-Milwaukee. The university estimates it could have saved around half a million annually over the past several years under a revised reciprocity deal.

UW System President Jay Rothman said campuses have the reserves to handle this year's deficits but said the approach wasn't a long-term solution.

"We are consuming our reserves at an unsustainable rate," he said.

More:University of Wisconsin System plans to raise in-state tuition by 5% next school year

A report released last month found only eight states fund their four-year university system worse than Wisconsin.

For the first time since 2012, in-state tuition for undergraduates is increasing by an average of 5% at UW System schools. Most of that money will fund employee salary increases.

GOP approval would be needed

The proposal would transfer authority to negotiate the agreement from the Higher Educational Aids Board to the UW System. The Republican-controlled Joint Finance Committee would still have to sign off on a renegotiated agreement.

Rep. Jodi Emerson, D-Eau Claire, brought up concerns that the current bill language could unintentionally jeopardize the reciprocity agreement because the Minnesota legislature is adjourned for the rest of the year.

"I've been making phone calls to Minnesota legislators and they weren't really aware of this," Emerson said. "I just want to make sure that we're walking carefully with this bill."

Committee hears bills on financial aid for veterans

The committee also heard testimony Thursday on two bipartisan bills that would help veterans with the costs of college.

One proposal would waive admissions fees at UW System schools and technical colleges for veterans and military members. Another would make changes to the residency requirements for tuition and fee remission for veterans and their families.