University System of Maryland Chancellor Jay Perman said he will cut his pay temporarily by 10% and warned system employees also could face pay cuts, or even layoffs, as the university system works to close a coronavirus-related budget gap this year.
The university system said in a news release that it expected revenues and funding would fall $500 million short of estimates for the budget year ending June 30, 2021. That includes a reduction of more than $100 million in state funding for the system that was announced earlier this year.
The pandemic’s financial impact on the state university system could mean “reductions in operating expenses, cuts to capital spending, use of reserves, hiring freezes, furloughs, temporary salary reductions, and/or layoffs” for its 12 institutions, according to the Wednesday news release.
“I acknowledge that the size of our deficit means that, to some degree, employees will likely have to share in the pain of budget cuts,” Perman said in the release.
Perman was set to earn $960,744 this year before the cut in his own pay.
The largest union for state workers — the American Federation of State, County and Municipal Employees — took issue with the system’s statement, and called on officials to negotiate about cuts that could impact union employees.
“The ... statement today took great pains to be measured and sound thoughtful. The problem is that since the pandemic began, the USM has failed to bargain about health and safety or finances with AFSCME,” wrote Sally Davies, AFSCME Council 3′s vice president for higher education, in a statement.
In the months leading up to the fall semester, union members pushed system schools to come to the table to discuss safety procedures related to the COVID-19 illness caused by the coronavirus. The union chapter representing the University of Maryland’s workers filed a complaint with the State Higher Education Labor Relations Board to that effect.
Wednesday’s news release from the system stated that “the chancellor has reaffirmed that the System will follow established union negotiation procedures.”
Meanwhile, the system said it already has frozen most hiring, eliminated vacant positions and postponed construction and maintenance projects.
The system also has frozen tuition at the same rates as for the 2019-2020 school year.
On June 19, the system’s Board of Regents voted to allow Perman and the individual school presidents to use pay cuts and furloughs to address their budget deficits.
“In the coming days, the USM Office and each USM institution will communicate its own budget decisions to faculty and staff," the news release said. “USM leaders have not ruled out additional cuts this fiscal year and next, should updated revenue estimates require them.”
The half-billion dollar budget gap for the current fiscal year follows a $230 million revenue loss for the budget year ended June 30, when the university system issued students prorated refunds for room and board after most students were sent home in March.
Schools outside the system are projecting heavy losses, too. Morgan State University, for instance, is expecting as much as $28.8 million in losses, and its president, David Wilson, has taken a 5% pay cut.
The system’s news comes as many Maryland universities are beginning unprecedented semesters with a heavy reliance on virtual learning.
Some system schools, including the University of Maryland College Park, have managed to limit revenue losses by opening dormitories for students this fall. An addendum to the university’s housing agreements stipulates that the school isn’t obligated to issue refunds if the College Park campus closes.
But other system schools, like Towson University, which switched to virtual learning abruptly just before classes were set to begin due to ballooning coronavirus cases on campus, are issuing housing refunds once more.
The university system’s statement came on the same day as a surprising announcement from the state: Despite fears of steep losses impacting the state’s general fund, Maryland ended the year with a surplus. The state made cuts to higher education in July in anticipation of a large budgetary shortfall.
In a statement, the state workers union said that Wednesday’s revenue report shows the state doesn’t need to cut jobs or salaries to balance its budget.
“We have said from the beginning that the governor needed to be prudent and not just wildly cut state services and those who deliver them,” read the statement from AFSCME Council 3.
Baltimore Sun reporter Pamela Wood contributed to this article.