Study: UW-Madison chips in $12B to Wis. economy

By Jason Smathers
Associated Press / March 30, 2011

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MADISON, Wis.—The University of Wisconsin-Madison released a report Wednesday claiming that the campus contributes $12.4 billion to the state economy, as officials argued for flexibility measures in the next state budget to preserve that impact.

The NorthStar Economics study also credits the university for creating, directly or indirectly, some 128,000 jobs across the state. The study estimated direct or indirect spending from the campus's students, staff, faculty, visitors and the institution itself pumps $9.6 billion annually into the state economy. Another $2 billion is generated from 283 startup companies formed under UW-Madison's umbrella. The remaining $862 million comes from UW-Madison's affiliated organizations such as the University Research Park, UW Foundation and Wisconsin Alumni Research Foundation.

The figures are nearly three times greater than those calculated in 2003, when NorthStar estimated UW-Madison contributed $4.7 billion to the state economy. The UW System has not commissioned such a study since 2002, when NorthStar estimated a $9.5 billion impact, including UW-Madison.

UW-Madison Chancellor Biddy Martin said the university's impact has grown despite shrinking state funds, but that further state budget cuts would halt progress unless the state grants the university more operational flexibility. The study claims the university generates $21 of economic activity for every state tax dollar invested in UW-Madison.

"Most of the growth since the 2003 impact study has come from federal research funding and that is a testimony to the strength of our faculty," Martin said. "If we are unable to retain and recruit the most talented faculty in the world, these benefits ... are in peril."

The report comes as the university continues its pitch to split from the UW System. Gov. Scott Walker's proposed budget would split the flagship Madison campus from the rest of the UW System, turning UW-Madison into a separate public authority. The proposal would relax campus procurement and building regulations, create a separate board of trustees and allow the campus to set its own tuition.

The budget also proposes $250 million in cuts, evenly divided between UW-Madison and the rest of the UW System.

Martin has supported the plan, saying Wednesday that UW-Madison needs the flexibility to absorb the cuts without an "astronomical" rise in tuition. Martin previously said in a letter to the campus that she would not raise tuition by more than 8.5 percent in the next year.

"I think that when the economy improves, the governor and the Legislature will want to be investing in higher education, for the reasons for (the study) has just shown us," Martin said. "So no, our effort is not to prepare for some inevitable decrease in state funding, it is meant to allow us to deal with what we've got now."

UW System officials have opposed the split, saying it would weaken the system and possibly raise tuition rates.

A group of 13 UW System chancellors sent a letter to state lawmakers March 24 asking them to support the UW System's alternative plan, which would provide similar flexibilities for all UW campuses but keep UW-Madison in the UW System.

Martin said the plan does not provide enough of the flexibilities the Madison campus needs to thrive.