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Lawmakers question UW System president

Reilly under fire for multimillion-dollar reserve fund

MADISON, Wis. - The president of the UW System was in the hot seat in the state capitol Tuesday as lawmakers wanted an explanation of a multimillion-dollar reserve fund.

To say that lawmakers were angry would be putting it lightly. They accused UW System President Kevin Reilly of mismanaging taxpayer and tuition dollars. Reilly appeared with the UW-Madison interim chancellor and other officials at the Joint Committee on Employment Relations, for a hearing that was supposed to be on approving a new personnel program for the system. Instead, lawmakers said they wanted to hold off after learning through a state report last week that the system has a $648 million reserve fund, with $414 million of that coming directly from tuition.

"Continually time after time you have embarassed the state of Wisconsin," said Rep. Robin Vos, R-Burlington. "Your actions by creating this billion-dollar slush fund by having huge tuition increases are shameful."

"Obviously this is most unfortunate," said Rep. Peter Barca, D-Kenosha. "While surpluses are good, it's not good if it comes at the expense of our students."

Reilly explained that some funds were already committed to future projects, but they were also saving up because the long-term trend is likely lower state funding and lower enrollment.

"That trend combined with the huge recession the country went through really made folks at the campuses say 'we have to have more and more in the bank because we know the long-term trend is that state funding is not going to go up it will go down long term, and we have costs to cover,'" said Reilly.

Lawmakers were frustrated with the answers, and said they wanted to know why UW said cuts in the last budget would be "devastating" while it was carrying such a large balance.

"It seems to me like you're telling me the exact scenario we went through is what you're saving the money for," said Vos. "But only you were smart enough to know that the money was set aside, and you didn't share it with the Legislature so elected officials could help make that decision."

"We're not smart enough to know exactly what's going to happen with enrollment from year to year and that's part of what we fear," said Reilly. "We're not smart enough to know what will happen with the economy and state budget. The message has been, you don't need to be smart but be good long-term managers."

Lawmakers are still skeptical and want more information from the university and Board of Regents on who knew what, and why these decisions were made.

"There's a degree of arrogance here on the part of the University," said Sen. Mike Ellis, R-Neenah. "They all think they are PhDs and we ought to be working at a Jiffy Lube."

Reilly told lawmakers he planned to create a policy with the Board of Regents that would decide how much to keep in reserve and how to report it more publicly.

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