Dear faculty and staff,
In late April, I invited members of our faculty and staff to complete a survey that asked how the college should make budget cuts when the time came to cut. At that time, we were asked by the university to provide plans for how Arts and Sciences would meet budget cuts of 5%, 10% and 20%. I write to outline your responses then and to explain our budget-trimming choices now.
The time to plan for a cut has come, as outlined in the budget announcement from the provost and chief operating officer this week.
The college conducted the survey in April for three reasons: to understand your views, to empower you with a voice in the process, and to help you understand the magnitude of the potential financial obstacles.
More than 1,400 of you responded, and about half of the responses came from tenured and tenure-track faculty. Shared sacrifice was the strategy most of you favored. Instead of permanent and potentially divisive measures like eliminating entire programs, most respondents suggested that spending be cut across the board.
Significant majorities of you said that members of the faculty and staff alike should share the burden. Also, different groups of faculty—tenured or tenure-track versus instructors—favored a share-the-pain approach. And you favored deeper cuts for those who earn more money.
Since then, the campus has enacted 5% furloughs and temporary pay reductions for employees making more than $60,000 annually, and 10% for top campus leadership, including deans, vice chancellors and associate vice chancellors.
Still, some members of the campus community wonder if cuts could have been made elsewhere, if cuts to faculty and staff could have been less if top administrators’ salaries had been cut more, or if whole programs had been cut.
Addressing these questions requires some background on the campus—and college—budget. Here’s a rough scale of the problem: The campus incurred unexpected costs and revenue losses of about $69 million in the spring when we had to close the campus, and the 2021 fiscal year budget includes an additional $102.1 million cut (about 5%) from the previous year. Even though this amount included general fund, auxiliary, and restricted funds, the focus of the 5% cut plan is the general fund. Auxiliaries like Housing and Dining and Athletics are likely to face larger reductions but will need to self-balance their expenses based on revenue reductions.
That general fund shortfall must come from somewhere, but where? The 2020 annual academic general fund for all colleges at CU Boulder is $342 million, and the College of Arts and Sciences spends about half of that, $170 million.
The first, and most important thing to know is that the college budget is primarily salaries. For the College of Arts & Sciences, tenured and tenure track faculty salaries are 49% of the budget, graduate student salaries and tuition remission accounts for 19% of budget, and instructor salaries compose 7% of budget. Staff salaries are 11%, so, salaries plus tuition remission account for 86% of our spending. Operating expenses (14%) account for the rest. Central college administrative support, mostly salaries, is less than 2% of the budget.
When the college has previously faced lean but not as deeply challenging times, it has cut from operating expenses, discretionary spending such as on travel, XQK research and building repairs. But it’s unwise to tap that well every time: Such cuts tend to become permanent, and problems of deferred maintenance and inadequate faculty support only worsen with time, like compounding interest.
Because our budget is mostly devoted to salaries, when budget cuts are relatively large, for example 5% to 10%, which are common numbers in economic downtimes such as 2008 and is the level of cut we face today, reducing salary costs is the only large lever we have to pull.
Why can’t we simply cut the administration and staff? This was a common question asked in the poll. The college is staffed at about half the rate (in number of staff per student) as our peer institutions in the Association of American Universities, and our college’s staffing (and administration) costs are well below that of the average of all colleges at CU Boulder.
Cutting staff has been a lever the college has pulled in the past, and repeating the move is simply not viable. One complaint we hear frequently from faculty is that staff support is badly inadequate. We agree with this sentiment and believe that more staff cuts will damage the college, both in the short term and in the long run.
You might ask whether we could make the necessary cuts by using obvious measures such as leaving faculty and staff lines vacant or by consolidating some functions. The simple answer is that the scale of the budget reduction is much larger than the scale of normally vacant lines, or what we could save through consolidation. As a large organization, a 5% budget reduction is $8.5 million, and we simply don’t leave that kind of money unallocated and unspent on worthy needs. That said, we intend to continue our efforts to be an efficient organization that finds savings where possible.
So, in broad terms, when times are tough, we have three main levers to pull:
- Incentivized retirements
- Temporary salary reductions
- Program elimination with faculty layoffs
With respect to retirements, about 30% of our 720 tenure-track faculty are over the age of 65. For every 10 full professors who elect to retire, the college would save about $1.8 million. To meet a 5% budget reduction with retirements alone, about 45 tenure-track professors would need to volunteer to retire.
The temporary salary reduction of 5%, as enacted in our college, will save approximately $4 million. Because of the $60,000 floor for temporary salary reductions, a move very widely endorsed by A&S faculty, staff, and students, this salary reduction is not 5% of total salaries, but rather about a 3% to 4% budget reduction.
Program elimination with faculty layoffs is a lever of absolute last resort and is one we would need to pull only in the direst of circumstances. We can lay off tenured faculty only under very narrow conditions. Program elimination is quite rare, but the most common reason for laying off faculty members. Needless to say, eliminating programs and laying off faculty is highly disruptive and a mechanism we would resist until forced to use it.
As the provost and chief operating officer noted this week, the campuswide planning target for general fund reduction is 5%, on top of the already implemented temporary salary reductions and furloughs.
With the scale of the shortfalls we face, there are only so many levers to pull, and we’ve begun planning for the ones best suited to our circumstances and your expressed desires. We don’t know yet what exact cuts we will need to take but expect campus guidance on this in the coming weeks. We also don’t know yet what the next few years hold for us, but we intend to be ready to meet that challenge.
We do know that we are obliged to leave the college and the university stronger—and more resilient—than we found it. And regardless of how we meet our budget shortfall, we must not short-change our efforts to promote diversity, equity and inclusion. With your help, that is exactly what we will do.
Finally, we remain committed to transparency and open communication. As the unusual situation forced on us by COVID-19 becomes clearer, we will share with you our plans to adjust and adapt and seek your input. We welcome questions and comments.
Sincerely,
James W.C. White
Interim Dean
This was originally an email sent out to all faculty and staff on July 24, 2020.