UW-Madison announced a second round of furloughs and expense reductions in response to the COVID-19 pandemic financial crisis in order to decrease the expected $320 million deficit this semester.
Another six months of furloughs will span from Jan. 1 through June 30, 2021, which will include a range of three furlough days (½ day per month) to six furlough days (1 day per month) and reduce employees’ pay by 2.5 to 4.6 percent during this six month period, depending on the furlough days required for each employee. This comes after UW-Madison has had to increase spending to cover the costs of additional cleaning and COVID-19 testing initiatives while enduring a decrease in state funding and tuition revenue.
Those losses, expected to total $320 million between March of this year and June 21, 2020, will not be covered completely by the new furloughs, which were not given a specific dollar amount in the UW’s press release.
Lower-paid employees such as custodial, animal care and food-service workers will face smaller reductions and higher-paid employees such as the administration team will face larger cuts. Chancellor Rebecca Blank and vice chancellors will endure a 15 percent salary cut while school and college deans will voluntarily receive a 10 percent salary reduction over the first six months in 2021.
This is the second set of progressive furloughs implemented in 2020 for most university employees. In March, to respond to the financial threat of the COVID-19 pandemic, the university implemented furloughs, salary and hiring freezes and other spending limits that saved the institution $27 million.
“This has been a year unlike any other in the history of our institution. I’m tremendously proud of the way everyone in our campus community has pulled together amid great adversity,” Blank said in a release. “Through the summer and fall, we’ve targeted October as a month where we would be able to make a clearer assessment of our finances, looking ahead to 2021.”
UW-Madison faced a nearly $50 million shortfall from the state between the current and previous fiscal years due to Governor Tony Evers’ initiative to return money to state agencies through budget lapses. Tuition funds are also down approximately $24 million and research initiatives are anticipating a $28 million shortfall.
Auxiliaries, or entities that fund themselves through their own generated revenues, at UW-Madison also faced an almost $150 million shortfall through limited athletic events and a limited Terrace season for the Wisconsin Union this summer.
With the March budget cuts, UW-Madison took other steps along with the furloughs, including freezing salaries and most hiring, holding off on spending funds planned to go towards new budget investments for this fiscal year and eliminating most travel and discretionary spending wherever possible. Those furloughs and freezes will be completed on Oct. 31.
UW-Madison also implemented work-share programs to keep employees partially working while their units were temporarily closed down in addition to using reserve funds to cover some of the losses.
Blank anticipates that the budget will face additional cuts, as furloughs alone may not be enough to balance the budget. This includes the potential for staff layoffs.
“I recognize that this is difficult news, but until we can resume normal operations, we will need to deal with the consequences of this pandemic on our organization,” Blank said in the release. “With these actions behind us, UW-Madison will be in an even stronger position to fulfill our public mission.”
Along with the budget cuts, UW-Madison is continuing to move towards implementing a $15 minimum wage for hourly employees effective Jan. 17, 2021. This increase will apply to all workers except for temporary or student employees.