Each bargaining unit of Eastern Michigan University has been asked to forfeit a 1.5 percent pay raise despite increases in healthcare coverage. President Susan Martin has also warned that 50 jobs will be eliminated if faculty does not cooperate.
The decision was recently made after the university’s state appropriation for fiscal year 2012 was figured to contain a 15 percent reduction from $76,026,200 to $64,619,100; a reduction of $11,407,100. The deficit, which is headed to the Governor’s desk for signing, and the projected increase in year-to-year operating expenses of approximately $12 million leaves a total operating budget shortfall estimated at $23 – $24 million.
“We had been preparing for it (state funding cutback) since January but none of us expected it would be this deep,” Martin admitted. “At most, I thought it would be 10 percent. It’s been a very educational experience for me and very challenging to not let it affect students.”
After reevaluating EMU’s efficiency in spending, it was figured if all employees were to forgo a pay increase this year the savings would be $3.2 million. It has already been announced that non-bargained for employees will not receive a pay increase in FY 2012 along with elimination of cell phone allowances – besides safety, security and contractual requirements.
“Given the severity of the cut, we have no other choice,” Martin said. “It’s not something we want to do but we’re trying to come up with $24 million.”
The 1.5 percent raises are based off each employee’s annual salary and were implemented to compensate for this year’s additional healthcare costs – approximately $1.9 million.
“Between the increase in co-pay and increase in prescriptions, it (a 1.5 percent loss) really doesn’t paint the picture of how hard this is going to be for people,” President of UAW 1976 William Heilman explained. “It’s going to come down to either putting food on the table or paying for health care.”
The UAW 1975, lead by Karen Hanson, has already denied Martin’s request to forego a pay increase and on June 10 branch 1976, which represents EMU’s professional technical unit including police officers, clerks and faculty, will be voting on the subject.
Heilman is planning to hold an informational meeting with the Election Committee for anyone seeking answers. As of now, he is reconsidering accepting a raise at all, given the sudden disturbance of plans.
“What else should we expect to change?” he asked. “Will they being taking a pay cut, too?”
During his meeting with the President and Human Resource Representatives James Gallaher and David Trakul last week, most details on potential terminations were not discussed.
“It was tough to get a read with how she felt because she wasn’t very forthcoming,” Heilman. “We just kept getting flat answers. I have no insight into which areas will be cut and I’m nervous for the other 414 members of our unit.”
Based on recommendations from Deans and Executive Council leadership, at least 70 non-bargained for and bargained for positions should be eradicated, 20 of which are currently vacant.
First on the list is administration. According to President Martin, 80 percent of the school’s budget deals with the workforce.
“We need to make the university more efficient and structurally balanced by operating with fewer people,” Martin said.
She explained a considerable amount of investment goes into faculty and could actually experience a slight rise in numbers – including lecturers – based on current trends of hiring and departures.
However, areas such as public safety, international and discretionary travel and honoraria can afford cuts.
The president also stressed a need to reduce spending in student and academic affairs, specifically with Study Abroad programs, and is analyzing the university’s purchasing methods. Items bought, providers and costs are also being carefully reviewed.
“The main question is: How can we do everything more efficiently?” Martin said. “We’re working hard on reconstructing our campus – Pray Harrold will be opened again soon – and we can maintain 0 percent tuition increase. We want that momentum to continue.”
A surplus of 10 percent in financial aid is a future goal but will cost $3.3 million in year-to-year disbursements. She feels a loss in pay and possible job cuts are absolutely necessary in preparing such changes in the FY 2013. A final decision will be reached by July 1.
