M E M O R A N D U M
TO: Faculty, Staff and Appointed Professionals
FROM: Robert N. Shelton, President, and Meredith Hay, Executive Vice President and Provost
SUBJECT: Furlough Plan for 2010/11 Fiscal Year
DATE: April 14, 2010
In response to the very difficult budget problems that confront our State, the Arizona Board of Regents issued a directive at their March meeting that each university reduce its General Fund salary budget expenditures by 2.75%.
For the current fiscal year, ending June 30th, no new steps are required to meet this target because the University has already implemented a wide range of personnel actions that have produced the required reduction for the 09/10 fiscal year.
However, for the fiscal year beginning July 1, 2010 and ending June 30, 2011, it will be necessary for the University of Arizona to take a combination of steps. A portion of the budget reduction will come through voluntary attrition (i.e., retirements and resignations). Eighteen months ago we implemented restrictions on hiring in positions that are funded from State appropriations, and this restricted hiring protocol will remain in effect. However, we will also need to implement, with ABOR approval, a furlough program in order to meet the $5.2 million reduction that is required.
The furloughs will be phased by income and apply to all employees who earn more than $40,000 per year, with limited exceptions that include those directly involved in public safety, patient care, graduate assistants and post-doctoral employees. A full listing of those who are exempt, along with other specific information on the implementation of the furlough plan can be found on the Human Resources web site at: http://www.hr.arizona.edu/2011/furlough/faq
The furlough plan will be tiered depending on salary, and be effective as follows:
$40,000 and below – No furlough
Between $40,001 and $60,000 – 1 furlough day for the year
Between $60,001 and $90,000 – 2 furlough days for the year
$90,001 and above – 3 furlough days for the year
All employees, regardless of funding source, are subject to the furlough. One of the underlying principles of the furlough plan is consistency. Even those employees who are not directly paid from State funds receive University benefits year-round, and must thus necessarily participate in the furlough plan. Any full-time-employee (designated as 1.0 FTE), regardless of their contract length, must take the required furlough within their salary tier.
Those employees who work less than 1.0 FTE will have their furlough prorated. For example, someone with a .8 FTE appointment would have their furlough reduced to .8 of the required time.
No one likes the idea of furloughs. Through sound fiscal policies the University has been able to avoid them the past two years, and it would certainly be our preference to avoid them for the coming fiscal year. But given the ABOR directive, we are left with no other option.
Please remember that this furlough plan is temporary. The ABOR directive is only for the 2010/11 fiscal year.
However, it is important to note that more extreme budget actions, including the prospect of additional furlough days, will become necessary if Proposition 100 fails at the ballot on May 18th. The State has approved two budgets for the coming year. The first is dependent on the passage of Proposition 100, which is a temporary three-year sales tax increase of 1 cent. There is a contingency budget that will go into effect if Proposition 100 fails, and that would result in an additional cut of $42 million to the University of Arizona.
To cut an additional $42 million from our budget would necessitate a substantial increase to the furloughs, along with a significant reduction in jobs and major cuts in other areas, including student financial aid. Obviously we will not know if these additional cuts will be required until after the May election.
We know how stressful this time has been for so many people at UA. The three ABOR universities have been confronted with the most dramatic cuts in state appropriations in our history, and depending on the outcome of Proposition 100, we could be facing the steepest, fastest decline in state funding in the history of American higher education.
There are signs that the economy is beginning to improve, and it is our hope that we are now dealing with the worst and final aspects of the State's budget dilemma.
In the face of extraordinary challenges over the past two years, UA faculty, staff and appointed professionals have continued to do exceptional work. Our most sincere thanks go to all of you for your patience, commitment and perseverance through these hard times. You have kept the University of Arizona among the very best in the world, and have helped build a foundation that will bring us a brighter and more prosperous future for our students and the State.