Faculty and staff at the University of Arizona will be subject to temporary furloughs and pay cuts through June 30, 2021 due to the financial strains of the COVID-19 pandemic, according to a statement released by the university’s department of human resources on Friday (April 17). Like many institutions, the university had previously moved all spring classes online and canceled or rescheduled its events. It is also weathering increased technology costs and a projected decline in tuition revenue. The press release states that the changes in employee compensation, set to begin on May 11, are necessary because of an “extreme financial crisis resulting from the unprecedented impact of the COVID-19 pandemic.”
The furlough program for 2020 and 2021 will be implemented based on salary range. Employees who earn up to $44,499 will take 13 furlough days totaling 104 hours; those who earn between $44,500 and $75,000 will take 26 furlough days totaling 208 hours; and employees earning between $75,000 and $150,000 will take 39 furlough days totaling 312 hours, the press release states. Equivalent pay reductions are 5 percent, 10 percent, and 15 percent, respectively.
In lieu of furloughs, highly-compensated employees will have their pay reduced. Those earning between $150,000 and $199,999 will receive a 17 percent reduction, while those earning over $200,000 will receive a 20 percent reduction in pay.
University president Robert Robbins confirmed in an email that employees would keep all benefits throughout the furlough and pay cut period, including health insurance.
Models predict a $250 million loss in the university’s budget due to the COVID-19 pandemic, he writes, with $66 million lost by the end of the current fiscal year on June 30.
Robbins said during a conference call on Wednesday that “40% of our students are from outside of Arizona, and about 15% of those are international students,” reports Tucson.com. “Our net tuition revenue is derived greatly from out-of-state and international students,” he said, “so we’re going to have significant shortfalls in the projections of what we’re going to have from tuition revenue.”
Pam Scott, University of Arizona spokeswoman, tells AZ Central that the university has issued “substantial” refunds for housing, meals, and parking, and that other revenue sources have been “severely reduced,” including recreation centers, bookstores, and ticketed events. The technology expenses associated with moving 45,000 students to online learning have further strained the budget, according to Scott, as have cleaning expenses during the pandemic.
The employee compensation measures, applied during a 15-month period, are intended to save $93 million, according to Robbins’ email, a figure that covers less than 40 percent of the shortfall projected through June 30, 2021.
The university has also issued a hiring freeze and delayed plans for merit increases, which is projected to save $26 million, the email states. Robbins and other senior vice presidents took pay cuts in March, he writes, and the university is scaling back new construction and FY20 strategic plan funding, with a projected savings of $29 million.