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Construction bonds help UW’s net worth grow

By TODD RICHMOND
Associated Press

MADISON, Wis. (AP) — The University of Wisconsin System said Monday that its net worth has increased to $6.68 billion, but school officials warned that the financial outlook is uncertain.

The fiscal report said the net worth for the fiscal year that ended June 30 rose from $6.33 billion in the previous year. Julie Gordon, the system’s interim finance vice president, attributed the increase largely to unspent proceeds from construction bonds and new accounting guidelines that called for including the system’s share of the state’s pension fund as an asset.

While the report calls the system’s financial standing “relatively strong” at the end of fiscal year 2015, Gordon told reporters that the system’s long-term financial future looks murky.

Most of the system’s net worth — $4.38 billion — is tied up in buildings and equipment, Gordon said. The system also finished the fiscal year with about $113.7 million less in unrestricted funds, meaning money that isn’t obligated for a specific purpose and can be used as officials choose, the report said.

The system also saw $127.7 million worth of losses, up from $120.9 million in fiscal 2014. Most of the 2015 losses resulted from a mix of smaller state appropriations; an anemic return on investments — the system made $58 million less than the previous year, reflecting the stock market’s troubles, Gordon said; interest on debt; and a $73 million transfer to other state agencies; and depreciation on sold assets.

The report also doesn’t take into account a $250 million cut the state budget imposes on the system over the next two fiscal years. Those cuts didn’t go into effect until this year. Gordon said system officials expect campuses to turn to their surpluses to deal with the cut but she expects to see larger losses next year. The report did not address campuses surpluses. The state budget also continues a tuition freeze for the next two years.

Other highlights from the report include:

—The system generated $1.2 billion in student tuition and fees, up from $1.1 billion the previous year.

—It spent $3 billion on salaries and benefits, up from $2.9 billion.

—Donors gave the system $304 million, up from $292.3 million.

The Board of Regents’ Business and Finance Committee is set to review the report during a meeting Thursday at UW-Madison. The panel isn’t required to take any action.

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