The University of Toledo is implementing salary reduction initiatives as part of the effort to address a budget deficit of at least $20 million for the current fiscal year exacerbated by the global COVID-19 pandemic.
The budget reduction steps include furloughs, salary reductions and temporary layoffs.
“These are difficult, but necessary measures to ensure the financial stability of our institution,” said Matt Schroeder, executive vice president for finance and administration and CFO. “Recognizing that our people are our greatest asset, UToledo has committed to ensuring that employees maintain their health insurance during these temporary workload adjustments.”
The furlough time ranges from one to three days total through the end of the fiscal year, which ends June 30, 2020. The next pay period is the first to be impacted.
Employees with an annual salary range of $75,000 to $99,999 will have three furlough days with one day taken each of the next three pay periods. Employees with salaries of $50,000 to $74,999 will have two furlough days taken over two pay periods and employees who make less than $50,000 will have one furlough day.
All senior leaders and academic deans have already taken an immediate 20% pay cut through the end of the fiscal year. In addition, some senior professional staff and administrators with faculty appointments, such as associate or assistant deans and department chairs, and 12-month faculty who do not belong to a bargaining unit will take a salary reduction rather than furlough time. The salary reductions will be taken over the next four pay periods.
Lastly, supervisors will implement temporary layoffs of up to 29 days increments for some employees. Those workload reductions will be in effect between May 11 and July 3.
The salary reductions will save the University at least $2.5 million to help address the current budget deficit. Supervisors will inform their impacted employees by Thursday, May 7.
While the full financial impact of the COVID-19 pandemic is not yet known, to date UToledo has experienced at least a $20.93 million loss due to a potential reduction of state support, credits for housing and dining fees, lost revenue in auxiliaries without campus events, and decline in revenue from tuition and fees due to expected declines in summer enrollment.
The University has already taken a number of cost-saving measures, including implementing a hiring freeze; releasing intermittent call-ins and student workers; canceling most capital projects; and reducing expenditures.
One-time support from the federal government through the Coronavirus Aid, Relief and Economic Security (CARES) Act is expected to offset about 30% of the expenses due to the pandemic.
The University is working to address the deficit for the current year as well as the ongoing financial challenges heading into the next budget year with a projected deficit of $36 million.