Furloughs at the University of Wisconsin-Madison will continue for the first six months of 2021 to offset losses caused by the coronavirus pandemic. But Chancellor Rebecca Blank offered hope for next year, telling employees on Monday that “we expect to avoid the sort of dramatic cuts that many feared.”
Blank told more than 21,000 faculty, staff and other employees in an email that the planned furloughs and a continued hiring freeze wouldn't be enough to balance the budget that's suffered a roughly $320 million hit since the pandemic began and that additional cuts will be announced in the next few weeks.
However, a “substantial share” of the cuts will be achieved through attrition, a hiring freeze and other reductions already in place, she said.
Still, because of the uneven impact of the pandemic across the campus, layoffs will be likely in some places to deal with significant budget shortfalls, Blank said. She said plans would be structured to have “as little impact on employees as we are able.”
“I recognize that this is difficult news, but until we can resume normal operations, we will need to deal with the consequences of this pandemic on our organization,” Blank said.
The flagship campus also plans to move forward with implementing a $15 per-hour minimum wage starting on Jan. 17, Blank said. That does not apply to temporary or student employees. A 2% pay increase for employees set to begin in January will also take effect, she said.
Since the pandemic hit in March, Blank said UW-Madison has frozen salaries and most hiring, eliminated most travel and discretionary spending where possible, used reserves to cover some losses and implemented one round of progressive furloughs for most employees and a 15% salary reduction for senior leaders.
In August, Blank said UW-Madison was in a financial crisis.
Furloughs and salary reductions alone saved $27 million, Blank said Monday. But tuition receipts are down $24 million and research funding is on track to bring in $28 million less than expected, she said. UW-Madison will also lose $50 million in the current fiscal year due to state-ordered cuts and other unplanned for pay plan costs. The university’s budget may also face more cuts of an unknown size as the Legislature and governor work on the next two-year budget in 2021.
“Our budget crisis is exacerbated by the fact that while many revenue sources are down, COVID-related expenses continue to climb,” Blank said.
In total, between March 2020 and June 30, 2021, UW-Madison will face roughly $320 million in combined losses caused by lower revenue and higher costs, Blank said.
The number of furlough days for UW-Madison employees will vary from three to six over the first six months of the year, based on salary. Blank and vice chancellors will continue to take a 15% pay cut, while school and college deans will continue to take a 10% reduction.
UW-Madison reopened to students this fall and has been aggressively testing students for the coronavirus to try and contain outbreaks. The virus is surging across the state, with the seven-day average of new cases more than quadrupling over the past two months.