USAO News Bureau

State Budget Cutbacks Force USAO Cuts in Benefits, Salaries

Wednesday, November 4, 2009

With no end in sight to state budget cuts to higher education, the University of Science and Arts will trim benefits for all employees and implement furloughs and salary cuts for the remaining eight months of this fiscal year, which ends in June 2010.


USAO President John Feaver convened all employees on Monday morning to discuss the news.

“As these cuts from the state started coming in August, we tapped our reserves, then restricted travel budgets and cut spending,” he explained. “This next austerity measure is necessary to protect our people from layoffs or cuts to programs.”

As part of the plan to make up a projected $360,000 cut in state allocations to USAO this year, college officials also will suspend payments to annuities for all USAO employees, a special benefit program launched in the 1990s to enhance retirement benefits. This week’s decision will not affect base retirement plans for all employees, but only the 5 percent annuity payments made by USAO for its employees through Lincoln Financial.

As state and national recovery occurs slowly, USAO officials hope to end austerity measures – and renew annuity payments – in July 2010.

“I feel highly conflicted right now,” Feaver said. “I deeply regret the steps we are forced to take in order to balance this year’s budget, but we have made fantastic progress on every parameter of the 10-year Mission Enhancement Plan. As we look to Fall 2010, we are recruiting some of the finest students ever to set foot on campus. We have raised our admission standards to the highest in the state, and we have recalibrated the institution to better serve students and academic priorities. It’s difficult to be discouraged when I look at the institution as a whole.”

Under the plan announced Monday, furlough days for staff will occur in December and March.  To lessen the impact on students, those furlough days will occur during the holidays and spring break.

In exchange, employees who earn less than $20,000 will surrender 1 percent of their annual salary. Employees who earn $20,000 to $29,999 will get a 1.5 percent cut. Employees earning $30,000 to $49,999 will lose 2 percent. Employees earning $50,000 to $59,999 will surrender 2.5 percent, and employees earning $60,000 and more will be cut 3 percent. These salary reductions will take effect Nov. 1.

Faculty members expressed concern for students and how the budget plan might affect academic needs.

Because faculty cannot cut back on their commitments to students, their pay cuts will come without furlough.

“There is no way we can pretend that faculty can do less, teach less, prepare less or be available to students less,” said former Faculty Association President Darryel Reigh.  “It is imperative that students receive no less than our full attention for all their academic needs. As faculty, we will need to accept the same work for less pay, no doubt.”

President Feaver and the USAO Executive Council met with students to explain the situation and answer their questions and concerns Tuesday afternoon.

"I'm impressed that the administration chose to talk with students about the issue before going completely public with it. The meeting was pretty depressing, but it made me feel really good when Dr. Feaver said that, even in the midst of a potential financial disaster, he wouldn't want to have any other job in the world," said Laron Short, a communication major from Midwest City and managing editor of the USAO student newspaper, The Trend.

"I think we all felt a sense that we're in this together and, for those of us who love this university, we really need to be understanding and sympathetic about what's happening to the staff and faculty members. The journalist in me wants to ask a lot of questions, but the activist in me wants to find a way for students to raise money for USAO," Short said.

The first notice of budget tightening came in August, when USAO was asked to surrender $30,000 or 5 percent of its state allocation for that month. Other state agencies received cuts too. Cuts continued in September and October and are projected through the end of the fiscal year.

While USAO maintains a healthy reserve above the 7 percent of its annual budget, under state guidelines, the college cannot absorb the annualized cut without taking stricter measures, said Mike Coponiti, vice president for business and finance.

“More than 75 percent of our budget is people, their salaries and benefits,” Coponiti said. “After the brutal cuts to us and to most state agencies back in 2002, it took six years for our budgets to recover. We are in no position to absorb any more trimming now. Most office budgets for supplies, materials and travel have remained flat for a decade.”

So far this fall, the harshest cuts were in library and technology acquisitions, Feaver said. Limits were placed on travel and equipment purchases. In the summer, USAO Regents approved a standstill budget of $13.1 million that included no staff raises for the third year in a row.

Understanding its impact on students, USAO did not raise tuition and fees this year, despite rising fuel and insurance costs. In addition, some of the current year’s state appropriation is coming from federal stimulus funds.

“Because of the Mission Enhancement Plan,” Feaver explained, “we anticipate a very bright future once we get past this current negative budget cycle. Faculty, students and staff are doing so many things right that it’s hard not to be optimistic.”