USU administrators taking 3 percent pay cut

In a letter sent to USU faculty and staff members this week, USU President Stan Albrecht announced that in an effort to deal with upcoming budget cuts, all university administrators would be taking a 3 percent cut in pay. The pay cuts, and additional financial belt-tightening at the school, are the result of Gov. Gary Herbert’s mandate that all state agencies cut their budgets by 3 percent. “While there has been some discussion about the possible use of furloughs, we believe that we have identified a way to address the current reduction without resorting to furloughs for the vast majority of our campus community,” Albrecht wrote in the e-mail. “We will, however, implement a voluntary one-time salary reduction by our leadership team that is equivalent to five days of work and will apply those salary savings to the cut.” The full text of Albrecht’s e-mail to faculty appears below. “Dear Members of the USU Faculty and Staff: I do hope that the holiday season has been a special one for each of you and that, for all of us, 2010 will be a good year. As you return to campus and prepare for the beginning of a new semester, let me take the opportunity to provide you with a brief update on recent events that impact the financial status of our university. As you are no doubt aware from various media accounts, Governor Gary Herbert released his budget proposal for Fiscal Year 2010-11 in December. The Governor’s budget reflects a continuing decline in state tax revenues for this fiscal year (FY 2009-2010) which he addresses through a 3% one-time budget cut on all state agencies, including higher education. This cut applies to the state-supported personnel portion of our budget and, for us, results in a $4,055,000 additional recission in our 2010 budget. Because this cut is made through an Executive Order, it does not require legislative approval and is effective immediately. On the more positive side, the Governor’s proposed budget reflects a strong commitment to protecting future higher educational opportunities for our state’s citizens and acknowledges the critical role of our institutions in facilitating an economic recovery. This commitment is reflected in his proposal to hold higher education harmless from additional reductions for FY 2010-11 by using one-time monies, including a portion of the state Rainy Day Fund. In effect, this would mean that the backfill we were allocated this year from federal stimulus funds would be extended at least one additional year, with the hope that some of this backfill could become permanent as the economy improves. If the legislature supports this recommendation in the upcoming session, this would be very good news for us. However, it is important to note that legislative leadership has expressed some skepticism about this component of the Governor’s budget proposal. One of our most important tasks for the upcoming legislative session will be to try and garner support for the Governor’s recommendation. Our immediate challenge, however, is to address the 3% recission from our current year’s budget reflected in the Governor’s Executive Order. We have spent considerable time over the holiday break examining ways in which we can do this while limiting, to the extent possible, the effects on core mission and programs of our institution, and on our faculty, students, and staff. While there has been some discussion about the possible use of furloughs, we believe that we have identified a way to address the current reduction without resorting to furloughs for the vast majority of our campus community. We will, however, implement a voluntary one-time salary reduction by our leadership team that is equivalent to five days of work and will apply those salary savings to the cut. Other actions we will take will include some or all of the following: • We will use half of the interest earnings that are generated by the various quasi-endowment accounts that are spread across the university. Currently, our quasi-endowments are generating approximately a 4% return, which is very good in today’s economy. By using half of the earnings generated on one-time basis, account holders will still experience a return of 2% for their use at the unit level. • We will delay by one year the distribution of the $1 million strategic investment account that was created in the last round of the budget eduction process. Units that had been designated to receive support from this account will still receive those monies, but on a delayed basis. • We will utilize modest one-time funds that have accrued in a central reserve account. • We will use some one-time funds that have accumulated in our Tier Two Tuition account. • Several of our Vice Presidents and Vice Provosts have been asked to make additional reductions in their operations to assist us with this effort. • Some portion of the reduction may be distributed to units other than those that have been given specific reduction targets (see above bullet), though we anticipate that this will be at a level that the impacts will be minimal. By implementing this series of actions, we believe we can address the current reduction in our budget without having significant direct impacts on the quality of our programs. We will schedule time over the next couple of eeks to meet with faculty, staff, and student leadership groups to explain, in greater detail, the actions that are proposed. Let me also provide a quick update on how the information provided above affects other budget-related actions being taken. As you may know, the Budget Reduction Committee has recently completed a series of individual budget hearings with each of the deans and vice presidents. Following these hearings the Committee delivered to me recommend cuts that would be enacted on July 1, 2010 to address that portion of our budget that was backfilled by the legislature using federal stimulus funds. While I appreciate the hard work and efforts that have been invested in developing this plan, I have decided not to act on those recommendations until we have a clearer idea of how the Legislature will respond to the Governor’s proposal to backfill these cuts for an additional year (delaying their implementation until July 1, 2011 at the earliest). I am pleased that we have a plan “in hand” if these cuts need to be made by July 1, 2010; but I believe that it is prudent not to announce the implementation of these cuts until we have a clearer understanding of if and when those cuts would need to be put into place. While there are some signs of the beginnings of an economic turnaround, there are still important challenges ahead. In the meantime, we are committed to continuing to find ways both to minimize the impact of the continuing economic downturn on our core mission and to position our institution to move forward in significant ways when the economy improves. There is much work ahead as we approach the new legislative session. Fortunately, we go into that session with strong support from groups like the Salt Lake Chamber of Commerce, members of the business community who have created a Friends of Higher Education lobbying group, and many others. We will provide regular updates on progress as the session evolves. Again, thanks to each one of you for your tireless efforts to make this great institution even better. My best wishes for a happy and more prosperous new year. Sincerely, Stan L. Albrecht President”

Free News Delivery by Email

Would you like to have the day's news stories delivered right to your inbox every evening? Enter your email below to start!