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The perils of precedent

“Precedent.”

That was the cause of concern David Miller, associate vice president of capital planning for the University Wisconsin system, cited last week when asked about the possibility that Wisconsin lawmakers would shift more of the cost of a list of university construction projects onto the UW system’s budget. Miller would watch later the same day as members of the state Building Commission voted to delay by a month approvals of six university construction projects, a decision that came into response to the news that the UW system had about $648 million in its unrestricted cash reserves by June 30, the end of the state’s fiscal year.

Miller declined to say what sort of precedent he thinks might be set, but it was clear the source of his concerns was the possibility that lawmakers might decide the UW system’s large reserves warrant shifting more of the cost of UW projects from the state’s budget and to the university’s. Information from the Department of Administration, though, helps to shed a little light on what might be the source of anxiety.

According to an email from the department, the money the state puts toward academic buildings usually comes from borrowing that is paid off using the state’s general fund. If the university, though, wants to reduce the amount of debt needed for a project – which presumably might help advance a start date – it can use its own cash.

Of the six proposals for which lawmakers delayed a vote this past week, three are to be paid for in part by the university.

But what if those contributions were to become less voluntarily in the future and it instead became standard practice for the university to put cash toward every building project undertaken in the UW system? Therein, it seems reasonable to suppose, lies Miller’s concerns.

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