Screenshot of the email
In response to already present financial challenges worsened by COVID-19, UVM has announced further budget cuts for fiscal year 2021.
Limited state support and a high reliance on out-of-state tuition, along with extra costs caused by the COVID-19 pandemic, have caused long-term budget challenges, according to a June 4 email to UVM faculty and staff from Richard Cate, UVM vice president of finance.
Costs associated with COVID-19 will reach $8.7 million by June 30, plus an additional $6.4 million direct COVID-19 expenses, according to the email. Higher demand for financial aid and lower income from tuition and student fees will also cost the University.
However, the costs of COVID-19 is not the biggest budgetary challenge UVM faces, according to Cate.
“Our position as a public flagship university located in a state that has a very small population and limited ability to support the university financially is the key ongoing challenge,” he stated.
Along with currently employed strategies such as hiring limits, salary cuts and the deferral of borrowing $30 million for the new multipurpose center, new budget cuts for FY 2021 will be introduced.
One new strategy will be incremental salary cuts to staff and faculty according to base pay.
Those making $45,000 or under will receive no reductions; $45,000 to $60,000 will receive a 2.5% reduction; $60,000 to $80,000 will receive a 3.5% reduction; and $80,000 and over will receive a 5% reduction.
These actions will be implemented July 1, and will be “topics of discussion and negotiation with each of our bargaining units”, according to Cate.
“We have considered an array of personnel actions to create a sustainable budget while doing our best to protect our employees,” Cate stated.
Other strategies include possible mandatory furloughs, early retirement options for faculty who are over the age of 60 and have worked at UVM for at least 15 years and phasing out vacation accruals for those no longer employed by the University.
Though the first quarter of FY 2021 will operate under a temporary budget plan, the full-year budget plan will be approved by the Board of Trustees in September.