The University of Vermont has announced a new round of budget cuts.
In a community-wide email on Tuesday, Richard Cate, the school’s vice president of finance, told staff and faculty that the university would be cutting salaries and exploring furloughs.
UVM expects to incur about $8.7 million in pandemic-related expenses by June 30, the close of the fiscal year, Cate said, and is expecting another $6.4 million in direct expenses to follow. Demand for financial aid will probably go up, he added, as tuition and fee revenues decline.
“The primary long-term budget challenge confronting us, however, is not related to COVID-19,” Cate added. “Our position as a public flagship university located in a state that has a very small population and limited ability to support the university financially is the key ongoing challenge.”
All non-unionized faculty and staff will be subject to reductions in pay, depending on their salaries, starting July 1, according to Cate’s letter. Those earning less than $45,000 will receive no cuts; those earning between $45,000 and $60,000 will receive a 2.5% reduction in pay; those paid between $60,000 and $80,000 will see a 3.5% reduction. Anyone making over $80,000 will see a 5% cut.
About 2,000 employees will be affected by the salary reductions outlined in Cate’s memo, according to UVM spokesperson Enrique Corredera. The university estimates it will save about $4 million.
The university is also phasing out the practice of paying for accrued vacation when someone ceases to be employed, Cate said, and is exploring both buyouts and mandatory furloughs, the latter of which “may occur in instances where this short-term strategy will alleviate a one-time budget shortfall.”
The school has already enacted several belt-tightening measures in the wake of the pandemic. Parents learned last week that UVM’s on-campus child care center would close. And in April, the school said that it planned to reduce the course loads – and therefore pay – of non-tenured faculty by a quarter next year. Senior administrators, including university President Suresh Garimella, will forgo one month’s pay.
The university is receiving some financial help from the federal government, and is likely to receive more from the state.
The college received a little over $7 million from the federal CARES Act, but half of those funds must go directly to students. And in their second budget adjustment, Vermont lawmakers earmarked $8.7 million to the school to help pay for Covid-related expenses, though Gov. Phil Scott has yet to sign off on the bill.
Rebecca Kelley, a spokesperson for Scott, said the governor’s office had not yet had a chance to review the spending plan, which only received the final go-ahead from legislators earlier this week.
Julie Roberts, the president of United Academics, the faculty union, did credit the school for choosing to enact progressive reductions in this latest round. The cuts to non-tenured and part-time faculty pay were widely criticized for being lopsided compared to those imposed on the college’s senior administrators.
But she added that UVM had yet to show why the cuts were necessary, particularly given the administration’s insistence that the school’s financial challenges were not primarily related to coronavirus expenses.
“Before the pandemic, our enrollments were good. And as far as I know, they’re still good,” Roberts said. “There’s no evidence to support these cuts – or at least none that we have seen.”
Corredera would not say directly whether the school’s deposits from students were trending up or down compared to last year. But he argued that even such “tried and true methods” for predicting enrollment were no longer valid in the current context.
“Recent national surveys say four-year colleges and universities can expect up to a 20% drop in enrollment and should not rely on deposits as a predictor of the number of students who will show up in the fall,” Corredera wrote in an email.
He added that if the school experienced even half of the enrollment decline predicted by national surveys, UVM would lose $26 million in revenue, about 7% of its general fund budget.
