Catholic University Releases Operational and Financial Update, Plan for Faculty Salary Cuts “Off the Table” for Now
Photo Courtesy of The Catholic University of America
By Jessica Fetrow
The Catholic University of America released a more in-depth breakdown of its operational and budgetary plans for the 2020-2021 academic year Tuesday morning, clarifying concerns on measures for combating the COVID-19 financial crisis. In an email addressed to the members of the Catholic University community, President John Garvey announced that the university was expected to experience a “net shortfall of $25-$35 million” from enrollment and auxiliary impediments, as well as additional spending on COVID-19 preventative safety measures.
“Over the last four months we have tried to address the crisis with four principles in mind: the health and safety of our community; the financial health of the University; the quality of our educational experience; and the preservation of faculty and staff jobs,” said Garvey in his email to the Catholic University community.
In his statement, Garvey clarified how the budgetary restrictions will impact faculty and staff at the university, confirming that the scheduled faculty raises will be postponed until after this fiscal year, saving the university an estimated $1.7 million, and that it will be temporarily suspending 403(b) contributions for 12 months, saving the university an estimated $7.4 million.
In an interview with The Tower, Garvey said that the decision to postpone the scheduled raises and temporarily suspend 403(b) contributions came after a “strong preference for preserving current income” was articulated by faculty and staff. The university will not be implementing salary cuts on faculty and staff at this time, although “if furloughs or salary adjustments were to be necessary” once the fall semester began, “they would be planned for and announced at that time.”
According to a financial austerity plan shared with academic deans and faculty on June 8 and discussed at the faculty town hall meeting on June 9, the university decided against faculty and staff furloughs as a part of Action Group B of its Austerity Action Plan. The tentative plan for the reduction of faculty and staff salary, as well as additional reductions to leadership salaries, is listed under Action Group C of this proposed austerity plan, with the target decision date listed as September 1. Since the announcement of this plan, salary reductions for faculty and staff have recently been moved “off the table for now,” according to Garvey.
“[The plan to reduce faculty and staff salaries] is now at the very end of the list of possible economizing measures. I am grateful for the many ideas and suggestions of our faculty and staff on these topics, and I look forward to more productive discussions,” Garvey said.
President Garvey told The Tower that all plans revolving salary reductions for staff will depend on the final enrollment figures and tuition, the number of students who ultimately decide to return to campus, and the total amount invested on classroom equipment for hybrid instruction, as well as testing services, personal protective equipment, and extra cleaning services. The university will have a better understanding of these costs, as well as the standing of the university’s endowment and liquid assets, by September.
Garvey also stated that he had attended “at least twenty sessions with faculty, staff, and trustees on the topic of budget adjustments” over the past three months, and plans to meet with the Budget and Planning Committee of the Academic Senate this week. He also stated that the administration has “carried on this deliberative process in public, and have changed our proposals in response to suggestions offered at dozens of consultative meetings.”
“When we began to work remotely because of the COVID pandemic, I wondered how this would affect our teamwork and ability to work collaboratively,” said Garvey in his interview with The Tower. “I would like to mention how impressed I have been with the work of our faculty and staff to come together in what I would call a phenomenally consultative and collaborative process. I am confident that we will continue to face more challenges together in the same spirit.”
President of the Faculty Assembly Dr. Binh Tran expressed his concern with the communication between the faculty and administration.
“The announcement that came out on Tuesday is something that I thought would have come out two weeks ago,” said President of the Faculty Assembly Dr. Binh Tran. “This plan was shared with the academic deans and faculty on June 8 and was discussed at the Faculty Town Hall on June 9. It is unclear why it took another two weeks to make the announcement to the broader community.”
After the initial announcement of budget adjustments in May, the university implemented a 3% reduction in its operating budget, in addition to the redirection of capital project funding to the university’s operating reserve, a $10 million draw on the operating reserve, and a reduction in administration’s leadership salaries, according to the statement. These combined efforts have saved the university an estimated $18 million.
In addition to these measures, the increased enrollment at the Columbus School of Law is expected to provide “$1.5 million in overhead toward mitigation efforts,” while other departments are working to create solutions to lessen the financial burden of the school in addition to the previously implemented 3% budgetary restrictions.
“We can expect that the University’s financial response to COVID-19 will continue to evolve,” said Garvey in his email to the Catholic University community. “With each significant development, we will keep the community engaged and informed. This next year will be filled with unique challenges, but I am sure we are taking the right steps to move forward with confidence.”