UW-Madison announces budget cuts for all departments up to 7 percent

Facing funding cuts from the Trump administration and uncertainty from the Wisconsin Legislature, the leader of the state’s flagship university directed all departments Monday to cut their budgets between 5 percent and 7 percent next year.

All schools and colleges must implement a 5 percent budget reduction in fiscal year 2026, while administrative and other departments must reduce their budgets by 7 percent, according to a letter sent to University of Wisconsin-Madison employees. 

“Our expectation is that many of the necessary reductions can be borne by trimming non-personnel expenses, leaving some vacancies unfilled, and, in some instances, moving existing expenses to alternative funding sources,” Chancellor Jennifer Mnookin wrote. “Still, we recognize these cuts will not be painless and that a number of units will face difficult choices.” 

The university has paused most travel and nonessential expenses and is reviewing capital projects and hiring. 

“We continue to face immense financial uncertainty and risks,” Mnookin wrote.

According to the letter, concerns include: 

• Potential changes to the federal indirect reimbursement rate, which is projected to cost the university between $65 million and $130 million. 
• The risk of additional grant terminations, freezes and stop-work orders. Since January, the university has seen more than 90 awards or subawards terminated or ordered to stop work, Mnookin wrote. 
• Questions about international students’ ability to study in the U.S., which might affect enrollment numbers, budgets and personnel. 
• Proposed changes to federal financial aid, including cuts to Pell Grants.
• Uncertainty regarding potential tariffs, which could have “cascading impacts” on the university’s construction and operations costs, Mnookin wrote.
• Uncertainty around funding in the state budget. 

Last week, Assembly Speaker Robin Vos, R-Rochester, said Republicans in his caucus support cutting the Universities of Wisconsin budget by $87 million. 

Lawmakers are expected to unveil the details of their higher education budget this month. The remarks by Vos were a stark departure from the funding increase leaders of higher education had asked for.

The Universities of Wisconsin ranked 44th out of 50 states in public funding in 2024 — a drop of one spot from 2023.

“These considerable uncertainties and risks require us to take additional steps today to help protect our long-term financial viability,” Mnookin wrote. 

In March, UW-Madison leaders asked all units to submit draft plans for a 5- to 10-percent budget reduction. 

On Monday, Mnookin said she recognizes some departments will have to “supplement” the university-directed reduction with additional cuts. 

University deans and vice chancellors will begin reviewing budget reduction plans soon. Mnookin said UW-Madison is prioritizing its core elements of teaching, research and outreach. 

“We understand this budget news may be disappointing and concerning, even if it is likely not entirely unexpected or surprising,” Mnookin wrote. “Higher education is in the midst of tremendous upheaval. Like our peers, we are not insulated from the impacts.”

Editor’s note: WPR is a division of UW-Madison.