President announces furlough, salary reductions for new fiscal year

President Ashish Vaidya announced financial plans for Fiscal year 21 (FY21) which include furloughs, salary reductions and a hiring freeze in a letter sent to the NKU community on Monday.

The President said the university is likely to face an $8 million deficit in the university’s budget. To prepare, he asked an Ad Hoc Contingency Budget group co-led by Mike Hales and Karen Miller to provide ideas that generate savings and revenue opportunities. 

“The budget reductions that we have to make will be painful but necessary, and in no way reflects the quality of the work that you do,” Vaidya said.

He said the group engaged with the Budget Executive Committee, the President’s Cabinet, Staff Congress, Faculty Senate Budget Committee, Student Advisory Group and Council of Chairs for feedback.

“After careful deliberation, we will be initiating the following steps to reduce our operating budget for FY21:

• Furloughs: Employees making between $50,000 and $75,000 will take 5 days furlough. Faculty and staff who joined NKU after January 1, 2020 will be exempt from furloughs. Employees whose compensation falls below $50,000 will be exempt from furloughs and any non-recurring salary reductions.
• Non-recurring salary reductions: 2% for those making $75,000 to $99,000; 3% for $100- 120,000; 4% for $120-150,000; 6% for $150-199,000; 8% for $200-250,000; and 10% for those making $250,000 and up. This will take effect on July 1, 2020. Employees who joined NKU after January 1, 2020 will be exempt from these non-recurring salary reductions.
• Hiring freeze: The current hiring freeze will be extended through FY21.
• Travel/Operating expenses: Except for essential travel and operating expenditures, all other expenditures will be frozen through FY21.
• TIAA contribution: There will be a one-year reduction in the University’s contribution to individual employees from 10% of the employee’s salary or wages to 7.5%.”

In addition, NKU’s academic structure, administrative units, programs and services, campus space to identify areas for cost savings and investments to help innovation, according to Vaidya. More information will be forthcoming.

Visit the Budget Office’s website to view the group’s full recommendation for cost savings and revenue generation.

Read the full email below:

Dear Colleagues:

During the April Spring Forum, I shared with you that the growing crisis due to the global pandemic is creating a highly uncertain and fragile economic environment. While we have faced challenging budget times before, we are in uncharted territory as we navigate unknown reductions in state appropriations, higher expenses and revenue losses due to COVID-19 and enrollment vulnerabilities.

Throughout the past few months, your dedication to the success of our students in this unprecedented environment has been nothing short of extraordinary. And yet we must prepare to not only weather this storm but emerge stronger on the other side. The budget reductions that we have to make will be painful but necessary, and in no way reflects the quality of the work that you do. That is why delivering this message is one of the most difficult things I have had to do.

Faced with what is likely to be upwards of an $8 million deficit in our budget, I requested an Ad Hoc group of faculty and staff, co-led by Mike Hales and Karen Miller, to propose ideas that not only generate savings and revenue opportunities, but also positions NKU as an innovative leader in student success. The group was asked to be mindful of the need to preserve NKU’s core mission as a steward of place, our differentiation and distinctiveness, our ability to innovate and generate revenue, and our future competitive advantage. Given the uncertain times ahead, it was also important to preserve the talent we have and avoid any permanent reductions in workforce at this time. This group engaged the Budget Executive Committee, the President’s Cabinet, Staff Congress, Faculty Senate Budget Committee, Student Advisory Group and Council of Chairs to get feedback, and I want to thank everyone who provided input on the preliminary report. 

After careful deliberation, we will be initiating the following steps to reduce our operating budget for FY21:

• Furloughs: Employees making between $50,000 and $75,000 will take 5 days furlough. Faculty and staff who joined NKU after January 1, 2020 will be exempt from furloughs. Employees whose compensation falls below $50,000 will be exempt from furloughs and any non-recurring salary reductions.

• Non-recurring salary reductions: 2% for those making $75,000 to $99,000; 3% for $100- 120,000; 4% for $120-150,000; 6% for $150-199,000; 8% for $200-250,000; and 10% for those making $250,000 and up. This will take effect on July 1, 2020. Employees who joined NKU after January 1, 2020 will be exempt from these non-recurring salary reductions.

• Hiring freeze: The current hiring freeze will be extended through FY21.

• Travel/Operating expenses: Except for essential travel and operating expenditures, all other expenditures will be frozen through FY21.

• TIAA contribution:  There will be a one-year reduction in the University’s contribution to individual employees from 10% of the employee’s salary or wages to 7.5%.

In addition to these measures, during the upcoming year, we will review NKU’s academic structure, administrative units, programs and services, and campus space to identify areas for cost savings, as well as investments to accelerate innovation in student success and regional engagement. We will hold a campus conversation focused on those ideas and will share more details on it soon.

We know these are deeply impactful measures and I understand the effect they have–even if temporary– on you. Please know this decision was not made lightly and without careful deliberation and feedback across multiple campus constituents. I would like to express my appreciation for the work of the Ad Hoc Contingency Budget group. Visit the Budget Office’s website to view the group’s full recommendation for cost savings and revenue generation.

NKU continues to serve students and the region in important and remarkable ways. I understand these difficult steps come at a most inopportune time but we will get through this crisis together. Our agility and resilience will lead NKU to a stronger, brighter future.

With deep appreciation and gratitude for all that you do,

Ashish Vaidya