Paul L. Caron
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Sunday, April 19, 2020

Facing $250 Million Loss From COVID-19, University Of Arizona Imposes Pay Cuts (Up To 20%) And Furloughs (Up To 39 Days) On All Faculty And Staff

K Gun 9, UArizona Announces Pay Cuts, Furloughs For All Faculty, Staff:

Arizona (University)The University of Arizona announced temporary pay cuts and furloughs to its 15,000 employees Friday morning as its campus remains shut down due to the COVID-19 pandemic.

In an email to all staff and faculty, UArizona President Robert Robbins announced the changes, which vary in effect depending on employees' salary.

  • For those within the salary bands up to $44,449 a year, a furlough of 13 days to be taken over time
  • For those within the salary bands of $44,500 to $75,000 a year, a furlough of 26 days to be taken over time
  • For those within the salary bands of $75,001 to $150,000 a year, a furlough of 39 days to be taken over time
  • For those within the salary bands of $150,001 to $199,999 a year, a straight salary reduction of 17%
  • For those within the salary bands of $200,000 or more a year, a salary reduction of 20% ...

The pay cuts and furloughs will begin on May 11, 2020, and last until June 30, 2021. ...

Robbins said their models project a loss of $250 million in the university's budget due to the COVID-19 pandemic. ...

The university will also go on a hiring pause and delay plans for merit increases.

Update:  Chronicle of Higher Education, Major Cost-Cutting Begins in Response to Covid-19, With Faculty and Staff Furloughs and Pay Cuts

For complete TaxProf Blog coverage of the coronavirus, see here.

https://taxprof.typepad.com/taxprof_blog/2020/04/facing-250-million-loss-from-covid-19-university-of-arizona-imposes-pay-cuts-up-to-20-and-furloughs-.html

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Comments

Under the CARES Act's Higher Education Emergency Relief Fund, the University of Arizona will receive (or has received) $30,953,447, of which 50 percent, or $15,476,724, must be spent on "emergency student aid."

The definition of emergency student aid is up to each institution. UArizona's options may be found here: https://financialaid.arizona.edu/types-of-aid/one-time-spec-circ-funding.

From the KGUN-9 article: "[UArizona President Robert] Robbins said their models project a loss of $250 million in the university's budget due to the COVID-19 pandemic, including $66 million by the end of this fiscal year on June 30. The pay cut and furlough plan is projected to save the university $93 million over its 15-month time frame."

It should also be noted that UArizona has a charitable foundation. Investment market changes have affected this, I'm sure. However, as of mid-2018, UArizona Foundation had assets of $209 million and awarded grants of $69 million. UArizona Foundation's income from contributions and grants was $169.5 million.

Posted by: Michael L. Wyland | Apr 20, 2020 6:45:26 AM

I've said for years we don't need to do any smart things. We just need to stop doing stupid things. The bloat in higher ed is a classic stupid thing. The cost to value ratio is way out of whack.

What we are seeing is the Great Pivot. I love it.

Posted by: Dale Spradling | Apr 20, 2020 5:05:33 AM

I suspect we’ll see a lot of this, followed by universities announcing that they are spending money on new buildings, programs, etc. In other words, the crisis will be used as an excuse to do things that administrators want to, anyway. I suspect we’ll see quite a bit of litigation, as well

Posted by: Mike Livingston | Apr 20, 2020 3:21:10 AM