Many colleges and universities have made some significant cuts to their work force already this spring. COVID-19 is making a dramatic impact on the faculty and staffs at many universities and they are struggling to find their right size for right now. Over the next few months, colleges and universities must decide who they are, what they are and how can they financially make those realities happen?
After hundreds of colleges closed early and in many cases finished the spring semester online, dozens of major universities have approved a furlough policy and made deep reaching cuts to staff for the summer and into next fall. Ohio University, the University of Wisconsin system, the University of Oregon, West Virginia University and the University of Louisville are a few of the major universities who have adjusted staffing. In addition, many smaller colleges have announced unpaid furloughs for hundreds of staff deemed unessential at this time. Some furloughs will be felt mainly on the college campus but many like Ohio University’s cuts in Athens, Ohio will be felt deeply by the surrounding community and the local economy.
At many small colleges the assistant coaches who have been furloughed are actually looking at a pay increase. Many small college staff had annual salaries increased in January of 2020 when the US Department of Labor increased the minimum weekly pay for employees who are exempt from overtime from $455 per week to $684 per week or $35,568 annually. Several of the employees who have been furloughed this spring continue to receive medical benefits from the university while on leave.
In Ohio a furloughed employees can draw $480 per week or $647 a week with dependents. With the extra $600 per week the federal government has contributed, a furloughed employee could draw $1247 per week or $62,844 per year. This represents an increase in salary while being on furlough of over $27,000 per year for a lot of coaches and staff. Several universities are currently looking at a staged reopening which will allow them to bring back staff and coaches over a longer schedule and not return them all at once.
The furloughing of so many jobs demonstrates the tremendous financial pressures being placed on colleges and universities throughout America.
The University of Arizona announced a massive furlough starting May 11, 2020 and extending until at least June 30th, 2020. As many universities face these same tight financial times, many have followed Arizona’s model. They have furloughed employees based on the amount of salary they earn. The bigger the salary received by an employee, the longer the furlough. They also have enacted across the board percentage cuts that are in many cases based on salary. Arizona gave those making $199,999 or less a 17% cut and those making over that amount a 20% cut.
West Virginia athletic director Shane Lyons announced a 10% reduction to his salary along with several other higher paid staff and coaches for the next fiscal year. This is part of an effort to soften the blow of an anticipated multi-million dollar shortfall at Wet Virginia. Many administrators are taking the lead in sharing the burden of the financial hardships this virus has inflicted.
At many universities there has been a salary cut on average of 10% taken by administrators and higher paid athletic coaches. Some university administrations are looking into an early retirement buyout option for experienced faculty and staff to save money long term. The short-term action will most likely need to achieve buyout through a draw on the university’s endowment.
Ohio Governor Mike DeWine announced last week a $110 million cut to higher education. The largest hits were to The Ohio State University who was asked to cut $14, 291,919 and to the University of Cincinnati, who earlier this spring dropped men’s soccer, was cut $8,170,209. Every state supported university and college was cut across the board 3.80%. These cuts are in effect until June 30th, and then the budget will be revised with the new budget cycle with further cuts possible and most likely probable.
Most universities are busy preparing possible re-opening plans for fall before budget decisions will be finalized. A number of schools are looking at least five scenarios that could occur based on the increase or decrease of the virus this summer. The first option many might consider is to open fully for in person classes and/or online courses during the previously approved scheduled academic calendar date.
The second option is to open fully for in person classes but do it later in the fall, and most likely after October 1st. They will need to select a date that allows the university to meet all higher education accreditation and attendance guidelines. A third option would be to open after October 1st and host both online courses and in person classes. This could be necessary if universities face shortages in facilities and staffing. A fourth option is to open after October 1st but with only online options. The fifth option is not to open this fall at all but instead make plans to return to full operation in January.
Every plan has drawbacks and possible ramifications to the safety, health and welfare of the student, staff and faculty. Each plan will have a major impact on the economic health of the university. It is imperative that universities make decisions based on sound financial choices and not on the tugs to their heart. Staffing decisions made now will impact how readily most universities will be ready to return to operations this fall.