Chancellor Douglas A. Girod

Message: KU to implement temporary salary savings plan, additional measures to address budget shortfall

Friday, June 19, 2020

Colleagues,

Last month, we announced that the Lawrence and Edwards campuses face a fiscal year 2021 estimated revenue shortfall of $120 million that necessitates difficult decisions.

Today, we are announcing our latest steps to address this unprecedented budget challenge. Our decisions continue to prioritize equity and reflect our commitment to protecting KU’s most vulnerable populations. As a result, we believe these are the appropriate next steps to ensure KU’s health, limit drastic impacts to employees, and allow KU to continue its mission well into the future.

Salary savings plan

First, we are implementing a temporary salary savings plan.

The plan will reduce the salary, for a period of six months, of nearly all Lawrence and Edwards campus employees who earn more than $50,000 annually, including those individuals funded by grants. The plan entails tiered reductions based on salary, meaning employees with higher salaries will incur a larger reduction than those who earn less.

Employees exempt from salary reductions include those with annualized pay less than $50,000, student employees (GTA, GRA, GA, student hourly), and employees working on H-1B visas.

The plan goes into effect Aug. 23 (reflected in the Sept. 18 pay disbursement) and will run for six months through Feb. 20, which covers 13 pay periods.

These temporary salary reductions will not impact employees’ health insurance coverage or premiums or leave accruals. Employer and employee contributions to the mandatory retirement plans (KPERS, KP&F and Kansas Board of Regents) will be adjusted as contributions are based on a percentage applied to your gross salary.

The chart below shows the tiered reductions based on salary brackets.

Salary Tiers

Salary Adjustment

< $50,000  

0%

$50,000 to $59,999

1%

$60,000 to $69,999

2%

$70,000 to $79,999      

3%

$80,000 to $89,999

4%

$90,000 to $99,999      

5%

$100,000 to $119,999  

6%

$120,000 to $139,999

7%

$140,000 to $159,999  

8%

$160,000 to $179,999

9%

$180,000 to $199,999

10%

> $200,000

11%

We estimate this plan will generate $7.9 million in cost savings for the university to put toward the $120 million shortfall.

For details, visit our salary savings plan FAQ page.

Spending down unit carryforward balances and savings

Our budget shortfall necessitates that we change some of our traditional internal budget practices. Moving forward, the university’s central budget office will sweep units’ general use carryforward balances, savings from vacant positions, and savings from implementing the salary reduction. We estimate these actions will enable us to identify approximately $38 million to put toward the $120 million shortfall.

Reviewing our administrative services and academic portfolio

Before the pandemic began, we had proactively launched two separate comprehensive internal reviews to ensure KU is operating efficiently and that our academic offerings align with our aspirations as a member of the Association of American Universities and our obligations to serve Kansans. This work continues. At this time, we believe these simultaneous reviews will help generate approximately $16 million in the next fiscal year to be put toward the $120 million shortfall.

No university-wide furloughs at this time

Because we are choosing to pursue a salary savings plan, at this time there are no immediate plans for university-wide furloughs. That said, it seems likely that some individual units – particularly those with employees who aren’t currently working due to reduced campus operations – may need to pursue unit-specific furloughs.

You will recall in March we committed to continue paying university employees through the final pay period of the current fiscal year. That commitment expires June 28.

We will continue sharing new information

Please note, these newest measures will not fully address our projected $120 million shortfall. Additionally, as we’ve said previously, there are still a number of unknowns that prevent us from having a full picture of the pandemic’s impact on the university. We still do not know the extent to which state funding may be decreased, whether there will be additional federal funding, or the degree to which this pandemic will impact enrollment. Most significantly, we don’t know how external circumstances will impact our plans to return to campus in the fall.

In light of these unknowns, we must continue to focus on controlling our controllables. The best thing we can do to help KU is to get our students back in classes for the fall semester – whether it’s on-campus, online or hybrid – and ensure that each course serves all students who enroll in it, no matter where they are. This is the work of not only faculty, but also advisors, registrars, staff in student services, instructional designers and technology staff. In short, every KU employee needs to be striving to help our students progress through their program of studies.

By now it’s clear we are facing one of the most challenging times in KU history. We hope it’s also clear we do not take lightly the financial decisions we have to make. We know this is a stressful situation for you, and we appreciate all you are doing for KU as we work through these circumstances together. We are trying to be as creative and compassionate as possible to address financial shortfalls in a way that continues to prioritize our greatest asset — employees like you. Thank you for all you are doing on behalf of KU.

Respectfully,

Doug and Barb

Douglas A. Girod
Chancellor

Barbara A. Bichelmeyer
Provost and Executive Vice Chancellor



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