MADISON, Wis. – Earlier this week, Wisconsin Gov. Scott Walker indicated that the University of Wisconsin system should prepare its new budget request based on the assumption that there will be no increase in state funding in the next two-years.

That’s because Wisconsin, like most states, has a very tight budget.

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Walker and other state officials were also troubled to learn in 2013 that the UW system had quietly stashed away tens of millions of dollars in various reserve accounts over the years.

But now the governor appears willing to work with the UW system, under certain conditions. He’s announced that the system could earn more state aid if it meets some performance-based criteria that will be designed to increase its relevance and value to the people of Wisconsin.

Walker’s announcement comes as university officials express concern about their financial situation. They say Walker’s plan to protect student pocketbooks by continuing a four-year-old freeze in the cost of tuition – combined with no increase in state funding – could cause harm to the UW system.

“Continued budget cuts and frozen tuition cannot be sustained,” UW President Ray Cross was quoted as saying by Madison.com. “Wisconsin is at a crossroads. We can either choose to invest in our future, in the future of our children and in the future of our state, or we can give the university System a lower priority and put our future at risk. The choice is ours.”

Walker responded by indicating he’s willing to recommend increased funding, if certain goals are met.

“Looking ahead, I will propose an increase in funding for the UW System, and it will be connected to performance metrics,” Walker said in a press release. “Over the past few years, we increased funding for our technical college system, including performance funding, and it is working very well.

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“We believe it is important to know specific data such as how many students enroll, how many graduate, how many graduate on time, how much they take out in student loans, how much the student loans cost, how many graduates are employed and in what areas.

“New funding should help address the needs of students and employers in Wisconsin, and it should be based on performance.”

Walker has not indicated what specific criteria would be involved in performance-based funding for the UW system. The plan will be included in his new budget proposal, which will be considered by the state legislature next year.

Under Wisconsin Act 20 of 2013, a portion of state funding for technical colleges is based on nine criteria:

Job placement rates, degrees and certificates awarded in high demand fields, programs or courses with industry-validated curriculum, the transition of adult basic education students to skills training, and the success rate of adults in basic education courses.

The list also includes participation in high school dual-enrollment programs, workforce training provided to businesses and individuals, participation in collaboration or efficiency initiatives, and training provided to special populations or demographic groups unique to the district.

Each affected college is allowed to choose seven of the nine to use as target criteria.

The outcomes-based funding model was designed to determine the distribution of 10 percent of state aid funding in 2014-15, 20 percent in 2015-16 and 30 percent in 2016-17.