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UA staff & faculty face furloughs, pay cuts; coronavirus budget shortfall predicted

The University of Arizona will cut pay and hours for staff and faculty through next June, in "recognition of the extreme financial crisis" created by COVID-19. Salaries will be cut 13-20 percent, through furloughs or overall pay reductions.

The plan will begin May 11 and run through June 30, 2021.

Employees making up to $44,449 will be asked to take 13 days off over the next year, resulting in a pay cut of about 5 percent, while employees at the top of the scale making $200,000 or more will take a 20 percent pay cut.

In an email to staff and faculty Friday, UA President Robert C. Robbins said that the university anticipates losing more than $66 million by the end of the fiscal year, and the most credible projections show the university losing more than $250 million by June 2021. 

"To put that in perspective, recall that our budget reallocations this year, 1.5% for academic units and 3.5% for administrative units, as well as RCM and administrative service charge tax increases totaled $30 million. While these changes caused incredible concern throughout our campus, even requiring layoff plans in some administrative areas, we are now predicting losses more than eight times that amount next year," Robbins said in his email.

The cuts include senior vice presidents, and Robbins' own salary, he said. 

Furlough hours can be taken over time, but the university said that all employees must take at least eight hours of furlough time every pay period, beginning May 11 until the required furlough days are fulfilled.

Furloughs taken in increments shorter than a week likely make employees unable to apply for unemployment benefits for that period under the temporary expansion of UI during the pandemic.

Robbins said that the Tucson university had already slashed spending in attempt to address an immediate cash flow shortfall of $40 million, slashing approved building projects worth about $7 million, and expenditures for the university's strategic plan, worth about $22 million. The UA will also "pause" hiring and delay merit increases, saving about $26 million, Robbins said. 

In total, the university expects to crawl back about $93 million in savings from May 11 to the end of next June. 

"I know you must have many questions about how this will affect you and your immediate colleagues, and I truly regret that this will add to an already stressful situation," he said. 

The UA is one of Southern Arizona's largest employers, and the university's economic impact for the state was valued around $4.1 billion in 2017, according to a study completed last year for the Arizona Board of Regents.  In total, the state's public university system generates around 84,000 jobs with $4.6 billion in wages and produces about $11.1 in economic activity for the Arizona economy. 

"We will adapt if conditions change dramatically or we realize significant unexpected new sources of revenue, restructuring savings or expense reductions," Robbins said. While the cuts are "significant," Robbins said it will cover less than 40 percent of the project shortfall through June 2021, even as salaries and benefits are more than 60 percent of the UA's spending. 

Robbins warned that traditional layoffs "may be necessary in the future to ensure the long-term financial stability of the University," but said that a comprehensive layoff was not the right approach for university's "immediate response." 

"With this plan, employees will retain their employment and health care benefits," he said. "We all will share in this as a team and we all will sacrifice as a team, but in a manner that respects your work, your contributions and your compensation and benefits, to the highest extent possible."

"The task ahead is not easy, and it depends largely on the resolution of our public health crisis. Along with our entire leadership team, I am grateful for the tremendous sacrifices you already have made, especially as more will be required of all of us at the university," Robbins said. 

UA employees with questions can go to the university's website

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UA coronavirus cuts

Furloughs or salary cuts at the UA are set on a sliding scale, per Robbins' email:

  • Up to $44,449 a year, 13 days of furlough, over time—equivalent to a 5 percent pay cut. 
  • From $44,500 to $75,000, 26 days of furlough, over time—equivalent to a 10 percent pay cut. 
  • From $75,001 to $150,000, 39 days of furlough, over time—equivalent to a 15 percent pay cut. 
  • From $150,001 to $199,999, a straight salary reduction of 17 percent. 
  • From $200,000 or more, a salary reduction of 20 percent. 

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