Baltimore-area colleges are instituting pay cuts for high-earning employees and initiating hiring freezes following a warning from the University System of Maryland this week that employees of the school system’s 12 institutions would have to “share in the pain" of coronavirus-related budget woes.
Facing a $65 million budget shortfall amid the pandemic, the University of Maryland, Baltimore County has put in place a hiring freeze and a temporary pay cut for staff and faculty with salaries of $100,000 or greater.
Towson University also announced this week that its president and her cabinet will take pay cuts, and the flagship University of Maryland, College Park, which projects a $292 million loss in revenue in its fiscal 2021 budget, said it will temporarily cut the pay of employees making more than $150,000.
University officials said the budget shortfalls were mostly due to a loss of revenue in auxiliary services. Towson, UMBC and the College Park campus, as well as other university system institutions, issued prorated refunds for dining, housing and parking in the spring, and some mandatory fees, taking a hefty hit on their budgets in the process.
UMBC, for instance, said it paid back students, staff and faculty $18 million when the campus closed in the spring as the pandemic heightened.
UMBC President Freeman Hrabowski made the announcement in an email to faculty and staff on Thursday, one day after 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 layoffs as the university system works to close a coronavirus-related budget gap this year.
“Our strategy is to avoid layoffs, if at all possible, and we have conferred with shared governance leaders about a financial path forward through these very difficult times,” Hrabowski wrote.
Hrabowski is taking a 15% pay cut, reducing his salary this year by $81,448. Hrabowski’s salary was $542,985 prior to the reduction, UMBC spokeswoman Dinah Winnick said.
About 400 school employees will have their pay cut, Winnick said.
At Towson University, President Kim Schatzel also will be taking a 10% reduction in pay, and the vice presidents in her cabinet will take a 5% reduction. Schatzel’s current base salary is $398,425, so she will be taking a pay cut of almost $40,000.
The pay cuts, which span between 2% and 10% depending on salary, also apply to Towson employees making at least $150,000 per year.
“We believe this plan demonstrates an appropriate level of financial sacrifice by the university leadership to help navigate the financial challenges we face as a university, while ensuring the overwhelming majority of faculty and staff will not be affected,” Schatzel wrote in an email to faculty and staff.
The university had already frozen new hires of regular full-time positions in the spring, unless Schatzel makes an exception for individual applicants. It has now stopped all university-sponsored business travel and eliminated nonessential capital projects.
The hiring freeze at UMBC will exempt faculty positions, student positions like graduate assistants, or any positions that are funded between 80% and 100% by grants.
UMBC also has eliminated a portion of vacancies from its fiscal 2021 budget and expects to cut costs elsewhere, like capital projects.
The college said it has lost an estimated $28 million during the fall semester after the coronavirus pandemic ravaged universities in the spring. The school returned over $18 million in room, board and other fees to students for a portion of the spring semester and waived most fees in the fall.
The university system expects revenues and funding to fall $500 million short of estimates in the fiscal 2021 budget year. That includes a reduction of $117 million in state funding for the system that was announced earlier this year, despite the state’s announcement this week that it ended the fiscal year with a surplus; Maryland levied cuts in anticipation of a large budgetary shortfall.
The university system said it had already frozen most hiring, eliminated vacant positions and delayed construction and maintenance projects.
The largest union for state workers — the American Federation of State, County and Municipal Employees — has called on officials to negotiate about cuts that could impact union employees.
AFSCME is still awaiting some budget adjustment plans, “but at any location where our membership is effected we intend to engage in negotiations with the administrations,” Stuart Katzenberg, director of Collective Bargaining and Growth Strategies with AFSCME, wrote in an email.
The university system’s other Baltimore-area schools — University of Baltimore, Coppin State University and University of Maryland, Baltimore — have not made announcements regarding budget changes.
Chris Hart, Director of Communications for University of Baltimore, said the college’s president, Kurt Schmoke, provost and chief financial officer took 10% pay cuts, and that the college does “not anticipate further budget announcements in the near future."
“As we plan for the next academic year, however, layoffs will have to be considered,” Hart wrote in an emailed response.
Calls to Coppin and University of Maryland, Baltimore were not immediately returned Friday afternoon.