Wednesday, May 31, 2006

Who Owes the Veterans?

Just about everyone seems to be on board with providing free UW and state tech college tuition to veterans. There's no debating that they deserve it -- risking life and limb in war is payment enough.

A question still looms, however, over funding. A Journal-Sentinel article from today discusses that question.

Estimates put the cost of the new law at between $6-$8 million per year, although I find that to be a conservative range. After all, the cost of half-price UW and tech college tuition, which veterans are afforded under current law, runs around $4 million per year.

Simply applying the new law to existing veterans taking advantage of the plan would bring the cost up to $8 million. But since free tuition is more appealing than half-price tuition, I imagine even more veterans will jump on board under the new law starting in 2007. Plus, since we are currently in a war that appears indefinite, the number of Wisconsin veterans is only going to increase in the coming years.

Governor Doyle, who recently signed the bill, wants to allocate funding for the free tuition in the next budget cycle.

The Republican leadership, who shepherded the bill through the legislature, appears to be against any additional state funding for the new law.

To consider the question of funding is really to ask the question: Who owes the veterans?

Unless additional funding is allocated, tuition for non-veteran students will increase to pay for the new law. But are other students really the only ones who owe the veterans?

It seems to me veterans pay the price of fighting in war for all of us. Every single citizen in Wisconsin benefits from the sacrifice made by Wisconsin veterans.

Doesn't that mean we all owe them?

If so, then it's only right that we all pay for their higher education. And that means we need to find the money to pay for the tuition waiver in our state budget.

13 Comments:

Anonymous Anonymous said...

I agree. Every Wisconsin resident benefits, and every Wisconsin resident should contribute to helping veterans successfully reintegrate with society.

May 31, 2006  
Blogger Interloper said...

This is an excellent example of a dishonest means to a worthy end. Legislators who pushed this bill wanted political credit for supporting veterans, but they were unwilling to cough up the dough to pay for it. This should have been built into the state budget, not passed along as an unfunded mandate.

May 31, 2006  
Anonymous Anonymous said...

The UW's budget is something like $3 billion (with a B) every two years. If the people running it can't find a way to absorb a few million (by my math, $10 million would be about a 1/3 of one percent of their entire budget) for this program without having to jack up tuition or cry to the legislature (and the media) for more money, they should all be fired and replaced with people who can actually do the job responsibly.

May 31, 2006  
Anonymous Anonymous said...

Many years ago, the Veterans Trust Fund managed by the Wisconsin Department of Veterans Affairs was set up to take care of educational benefits for veterans. There are millions of dollars in that account to pay for, or contribute to, this benefit. Why pass it on to the Wisconsin taxpayer or to student tuition increase?

May 31, 2006  
Blogger Seth Zlotocha said...

The issue is more complicated that just saying the UW System budget is $3 billion so it should be able to afford the tuition waiver. Much of that money comes in the form of dedicated federal grants and other specified funds for research, public service, financial aid, etc.

The state contributes 25% of the UW System budget, tuition accounts for about 21%, while the rest comes from the feds, gifts & trusts, etc. (See here, page 16, for a revenue breakdown. And see page 19 for a breakdown of where that money goes.) That means the annual state allocations for the system are actually around $990 million, not $3 billion.

Out of the state contribution, currently $12 million goes toward financial aid, which is the category that most appropriately encompasses the tuition waiver. By adding $4 million per year to that budget item (a conservative estimate of the cost difference between the current law, 1/2 tuition, and the new law), it would increase the size of the financial aid budget (the part that comes from the state) by 33%. That's hardly a miniscule amount.

On top of it all, it's an issue of principle. Since 2003, the UW System has had $250 million cut from its state allocation. The fact of the matter is any increase in cost (particularly unpredictable ones) will be transferred to the price of tuition unless it's specifically allocated elsewhere. If it's supposedly such a small amount for the UW budget, it's an even smaller amount in relation to the rest of the state budget -- so why not just dedicate the funds in the next budget?

In terms of the Veterans Trust Fund, the bill provides no mechanism from transferring money from the VTF to the UW System to pay for the tuition waiver. If that was the case, this would be a moot point.

Plus, as a Jan. 2005 Legislative Fiscal Bureau report makes clear, the VTF is currently barely breaking even on it's balance sheet (see page 14). As the report notes bluntly, "The Department projects that the current cash balance in the veterans trust fund will be depleted during the 2006-07 fiscal year. The agency is currently developing proposals to improve revenue flows to the fund and to decrease outlays from the fund" (see page 16). Sounds to me like increasing the burden on the fund at a time when the Department of Veterans Affairs is trying to decrease outlays wouldn't be looked upon too kindly.

May 31, 2006  
Anonymous Anonymous said...

As it relates to the VTF, wouldn't it be nice if every agency could reduce outlays by shifting their fiscal responsibility to another agency? Isn't the UW System also trying to reduce outlays, especially unforeseen ones like additional veterans education benefits (on top of their GI Bill education benefits)? One has to ask how the VTF got into a situation in which it's cash balance is going to be depleted. Is the legislature minding the VTF store?

May 31, 2006  
Blogger Seth Zlotocha said...

The LFB report notes that declining interest rates in recent years (although that trend is changing) contributed to the decline in VTF revenue. I'm not sure if there was any mishandling going on, as well.

I'm also not sure how much we want legislators minding the inner-workings of our various agencies. Certainly there needs to be oversight, but it seems like the strongest suit for most politicians is creating and then riding a wave of public outrage into office rather than actually solving policy issues. I guess the trick is balancing the needs for balanced oversight with the wants of our legislators to get reelected. One would like to think we could have both.

May 31, 2006  
Anonymous Anonymous said...

If the UW hadn't flushed almost $30 million down the toilet on a computer system that doesn't work, they'd be able to fully cover the cost of tuition for the vets and have money left over. All without raising tuition or pointing fingers at the governor or the legislature.

May 31, 2006  
Anonymous Tonya said...

Translation of Anonymous's 4:25 comment:

The University owes the veterans their tuition; I owe them nothing.

May 31, 2006  
Blogger Seth Zlotocha said...

The Lawson deal was a poor decision on the part of the UW, but that happens with systems of its size. But it has nothing to do with the current situation.

The UW lost about $26 million over 6 years in the Lawson deal -- that's a little more than $4 million per year. A lot of money, yes, but not nearly as much money as the system would loose without extra allocations for the mandated tuition waiver over decades.

The $8 million annual estimate for the tuition waiver is a conservative figure, and one that will surely increase as the population and number of veterans increases. Plus, it's an indefinite increase in costs for the system, unlike the Lawson deal which was short-term.

May 31, 2006  
Blogger Seth Zlotocha said...

Thanks for your comment, Tonya. I didn't see it before putting up my last comment.

It does surprise me a bit to see the hostility my post has elicited for suggesting the entire state pay equally for the higher education expenses of our veterans. It seemed to me to be a reasonable, fair expectation.

May 31, 2006  
Anonymous Anonymous said...

Please don't be confused on the definition of 'veteran'. Wisconsin has about 500,000 veterans. Many never served in combat and never will. They trained for that possibility and for that, they should be admired. But most never left 'society' so they don't need to be 'reintegrated' through additional education benefits paid by taxpayers or other students but they will still be eligible for 100% tuition remission in 2007. Let's hope that after they receive that benefit that they don't head out-of-state for a job.

May 31, 2006  
Blogger Seth Zlotocha said...

Thanks for your clarification.

Just to add a little, under the definition of the law -- like other programs for veterans in the state and country -- the benefits pertain to "a person who has served on active duty under honorable conditions."

According to the WI Department of Veterans Affairs, in addition to meeting a residency requirement, the person needs to have completed two continuous years of active duty to be eligible for benefits (active duty for training does not count toward the two years). There are some exceptions to this time requirement, including participation in a recognized wartime period for at least 90 days and for those who earned an expenditionary medal.

For those who are interested, the full military service eligibility requirements from the WI Department of Veterans Affairs can be found here.

May 31, 2006  

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