UPDATE: JFC approves UW surplus policy, venture capital fund con - WKOW 27: Madison, WI Breaking News, Weather and Sports

UPDATE: JFC approves UW surplus policy, venture capital fund contract

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MADISON (WKOW) -- UW System schools will no longer be able to build massive cash surpluses without approval from the Board of Regents.

The Legislative Joint Finance Committee (JFC) approved that policy change and several other measures Tuesday.

A 2013 state audit showed the UW System and its schools raised tuition in 2012 even though they had built cash surpluses equaling 20 percent of their total expenditures.  That shocked legislators, leading to the change in policy.

Unanimous approval the JFC means UW schools will not be allowed to keep more than 12 percent of their total expenditures in reserve, unless they get approval from the regents.

"We're not forcing anyone into spending because they've suddenly got more.  If they can justify it, they're probably able to keep that higher," said Rep. Dean Knudson (R-Hudson).

"I think what we're gonna see too, is more transparency and accountability with the Board of Regents," said Sen. Alberta Darling (R-River Hills), who serves as one of the JFC's two co-chairs.

The policy also requires school's that fall into a budget deficit to submit a plan for building a surplus.

JFC Co-Chair Rep. John Nygren (R-Marinette) said the real winners will be students and their parents.

"They can have some faith that when they're writing out those checks for tuition, that the dollars are appropriate," said Rep. Nygren.

In a more tensely debated move, JFC members approved awarding the state's new $25 million venture capital fund contract to Sun Mountain Kegonsa, a partnership between Kegonsa Capital Partners of Fitchburg and Sun Mountain Capital of New Mexico.

Sun Mountain Kegonsa will be in charge of investing state money into startup companies and other businesses that apply for venture capital funds.

Democrats and some Republican members wanted the full committee to have more input on any future changes to that contract.

Rep. Cory Mason (D-Racine) cited a need for greater controls due to Sun Mountain Capital's handling of a similar state contract in New Mexico that led to greater state oversight.

"The last thing we need in terms of our economic development programs is another misstep where people question the faith and confidence of the programs," said Rep. Mason.

"Before you get in a huff about the public is not gonna be protected, there's gonna be reports, there's gonna be an audit, there are going to be transparencies and reviews that's built into this contract," responded Sen. Alberta Darling (R-River Hills).

With those safeguards in place, the committee ultimately voted to allow any future changes to the contract to be approved by its co-chairs, Sen. Darling and Rep. Nygren.

The JFC also approved an additional $10.2 million dollars for the Department of Health Services to go towards community mental health and substance abuse counseling.

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MADISON (WKOW) -- Under a new policy approved by the Legislative Joint Finance Committee (JFC) Tuesday, University of Wisconsin System schools will have to justify cash surpluses that equal more than twelve percent of their total expenditures to the UW Board of Regents.

The new policy comes less than a year after a state audit showed the UW System and its campuses finished 2012 with $142 million in reserve, which equaled 19 percent of their total expenditures. 

Under the new policy, campuses will have to maintain a cash balance between zero and twelve percent.  Going below the minimum or above the maximum would trigger an automatic review by the Board of Regents.  The Board could still approve a higher maximum amount, but would require any school with a deficit to develop a plan to build a surplus.

Capitol Bureau Chief Greg Neumann will have more on this story on 27 News at 6.



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