FY 2026 Budget Update FAQ

Units across campus will need to reduce their fund 101 budgets by an amount equal to 5% or 7% of their fund 101 allocations, due to the substantial ongoing financial risk and uncertainty, especially at the federal level. Additionally, the interim provost and VCFA will be establishing an ad hoc team of leaders from across campus to help provide input and reactions on navigating current and future financial challenges over the course of the year. This ad hoc group will include representation from across the institution.

In challenging times, we want to do all that is possible to protect our core missions of teaching, research, and service. We are therefore expecting administrative units to bear a larger burden of these cuts, including the vice chancellor units. A very limited number of units may be given a longer time horizon for implementing this reduction or a reduced target reduction because of significant financial challenges.

Independent from this directive, we recognize that some units may implement additional school or unit-level cuts based on additional local priorities or financial pressures.

UW–Madison is taking action across three primary areas:

• Expenditure control: The university will continue its oversight over hiring, travel, and major expenses into FY26. We are also reducing some planned capital investments, such as pausing the Library Collections Preservation Facility project.
• Improved efficiency: Central campus is implementing new service delivery models to increase effectiveness and standardization of administrative services, and we will continue to work to improve and prioritize increased administrative efficiency.
• Advocacy: Further, campus leaders and colleagues in University Relations continue to advocate for UW–Madison at the state and federal levels. We also continue to work with our alumni and friends and with the Wisconsin Foundation and Alumni Association (WFAA) to grow philanthropic support for our mission and encourage advocacy on behalf of UW–Madison. We will also continue our legal advocacy through collaboration with our partner organizations, including the APLU, AAU, and more.

We cannot say with assurance that the cuts announced this week, even combined with careful planning and efforts to grow other sources of revenue, will adequately help us manage revenue losses, but we are confident that by acting now and working together to implement a meaningful but reasonably manageable cut, we will be far better prepared for what comes next. There is still incredible uncertainty about the future, and further reductions cannot be entirely ruled out.

School/College/Division (SCD)s will have latitude in how they decide to reduce their budgets or respond to unit-specific financial pressures separate from campus reductions, and layoffs are a possibility. Our request to campus leaders is that any layoffs resulting from this university-wide cut should be a last resort, and divisions must consult with campus leadership prior to initiating layoffs as a mechanism to meet this budget target. Units will follow all applicable university policies when communicating layoffs to employees.

Furloughs are typically useful in situations where there is a short-term budgetary concern. Indications are that the current situation will be ongoing, and thus it is not as well suited to furloughs. Further, furloughs are expensive to administer and can have a negative impact on some of the base functions of the university; thus, they are not a good option at this time.

We are continuing to explore potential options to support employees who may be considering retirement or resignation. However, Voluntary Separation Incentive Payment (VSIP) options are not currently available.

Any employee who is thinking about retirement is encouraged to contact OHR Benefits to review their available options.

Fiscal year 2026 begins on July 1.

Students’ educational experience is a top priority for UW–Madison. While students should not directly notice major changes, there may be instances where students could be indirectly impacted. For example, there may be fewer paid opportunities for undergraduate research due to decreased grant funding, or some schools and colleges may reduce some student-focused services or opportunities as a result of these cuts.

Investing in faculty hiring in areas where we have established strength and where we can make a difference in addressing societal grand challenges is an important strategic move even in the context of financial uncertainty. It is our belief that the Wisconsin Research, Innovation and Scholarly Excellence (RISE) Initiative priority areas will also position the campus to capitalize on evolving funding opportunities at the federal level and elsewhere. Wisconsin RISE operates in significant part as a matching hiring program for schools and colleges; thus, to the degree that schools and central campus elect to respond to these challenging times by reducing faculty hiring, RISE hiring will also see reduction as well.

Fund 101 is composed primarily from tuition revenues, with a secondary portion coming from state funding, and a smaller portion from federal indirect funding, reflecting that fund 101 supports a range of educational and institutional expenses.

As more details of the ad hoc workgroup are decided, we will be able to direct employees on how they can be involved or share ideas.

The state employee pay plan is decided as part of the state biennial budget, which is currently under consideration by the legislature.