UW-Madison Announces Furloughs To Address $100M Shortfall Caused By COVID-19 Pandemic

The University of Wisconsin-Madison has announced campus-wide furloughs for faculty, and academic and university staff to help address a $100 million budget deficit caused by the COVID-19 pandemic.

The length of furloughs depends on an employee’s wages, and ranges from three days of mandated, unpaid time off for those earning less than $50,000 per year up to six days for those making more than $150,000 between May 15 October 31.

In a statement released Wednesday, UW-Madison Chancellor Rebecca Blank said she, along with the provost and vice chancellors, would voluntarily take 15 percent pay cuts over the same six-month period.

A work share program is also being developed for campus units and employees particularly impacted by financial losses or major interruptions to their on-site operations. Blank said the goal of the program is to keep those employees partially employed by sharing available work.

“Under the program, employees will see a reduction in their working hours of between 10 and 60 percent and will share shifts to cover remaining work in the units,” said Blank.

UW-Madison will also offer voluntary leave without pay, said Blank.

Blank said UW-Madison has already canceled new investments, frozen travel and non-essential expenses, deferred some infrastructure projects and enacted a partial hiring freeze to address COVID-19 budget impacts.

“We are fortunate to have confronted this crisis from a relatively sound financial footing and prior to allocating new budget dollars as part of the FY21 budgeting process” wrote Blank. “This money, in combination with drawing on our limited reserves and other cost-control actions, will allow us to address most of the $100 million shortfall through central campus actions.”

But Blank said the initial COVID-19 budget impacts of $100 million, announced March 30, is likely a conservative number.

“It’s possible that the shortfall could be much larger,” wrote Blank. “As we have continued to respond to this pandemic, the financial impacts have grown. Indeed, just last night the state announced that all executive branch agencies, including the university, will be asked to cut 5 percent of its state tax dollar funding yet this fiscal year (which ends on June 30).”

Blank said the furloughs, work share and cost-cutting measures will save UW-Madison up to $30 million toward the $100 million shortfall. She said she doesn’t anticipate any further cuts between now and the fall semester.

Terry Warfield is a professor in UW-Madison’s Wisconsin School of Business and chair of the campus University Committee. He said the furlough announcement was expected. Adding that Blank and other campus administrators sought input from campus governance groups and that the current plan has support from faculty members.

“We all realize that everybody is going to have to take a little bit of pain here,” said Warfield. “And we want to make everybody share in that pain. And I think that’s how this is set up.”

Other UW System Schools Grapple With COVID-19 Related Deficits

UW-Madison’s furlough announcement follows UW System projections that campuses would lose $170 million in revenue during the spring semester alone after classes were moved online and students were told to stay home after spring break. Campuses then refunded around $78 million to students for unused housing and dining fees.

The UW Board of Regents Executive Committee voted unanimously April 16 to give chancellors authority to create employee furlough plans as a means to address budget shortfalls tied to the new coronavirus.

Furlough plans have already been announced at UW-Oshkosh, UW-Milwaukee, UW-Whitewater, UW-Superior, UW-La Crosse, UW-Stevens Point, UW-River Falls, UW-Green Bay, UW-Eau Claire and UW-Stout. They range from intermittent furlough days for faculty who are able to teach classes online to what are called “consecutive day furloughs” for staff members unable to do their jobs remotely. Some of those staff members received notices that they would face consecutive furloughs of three months or more.

The UW System furlough policy doesn’t allow campuses to assign consecutive-day furloughs to faculty members.

After all the tumult caused by students leaving campuses this spring, UW administrators are now working on contingency plans for the fall semester. UW System Administration has set a July 10 deadline for deciding whether to hold classes in-person this fall or continue offering remote instruction.

Another wildcard for campuses is how the COVID-19 pandemic and the economic fallout from mass closures of businesses deemed non-essential will affect fall enrollment.

Prospective students generally have until May 1 to commit to enrolling in a college or university. In a briefing Thursday, UW-Eau Claire Chancellor Jim Schmidt said administrators had developed “contingency scenarios” aimed at allowing the university to continue operation even in the face of a more than 10 percent decline in enrollment. Schmidt said the figure was for planning purposes and not based on hard numbers.

Some universities have extended the commitment deadline to June 1 in recognition that students and families may need more time to decide amid uncertainties created by COVID-19. They’ve also moved campus tours and other student recruitment efforts online. Surveys of high school seniors, including one conducted by consulting firm Arts and Science Group suggested that one in six were second-guessing enrolling in a four-year university this fall.

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