KENT, Ohio — Kent State University has announced plans to cut their budget by 20 percent amid financial struggles connected to the coronavirus crisis.
"Implementing a 20 percent budget cut will require layoffs and job abolishments," university officials said Monday. "Supervisors will work closely with their campus, college or division lead to follow university policies and procedures governing such actions."
The number of layoffs "will depend on the length and depth of the COVID-19 crisis, and on the number of current employees who are not represented by AFSCME or AAUP who participate in the following voluntary separation incentive package (more information coming in early May)":
- Three months' salary.
- An additional three months of salary or $20,000 (whichever is less).
- Retention of tuition waiver benefits for four years.
- The option of continuing healthcare coverage for up to six months .(employee continues to pay their premium contribution).
- Payout of current leave time according to university policies.
The cuts also include salary adjustments "for employees not currently represented by AFSCME or AAUP." The following pay reductions will be implemented starting July 1:
- President Todd Diacon: 12.5 percent.
- Cabinet, deans and those with salaries of $200,000 or greater: 10 percent.
- $150,000 to $199,999: 7 percent.
- $100,000 to $149,999: 5 percent.
- $50,000 to $99,999: 4 percent.
- $38,000 to $49,999: 2 percent.
- Under $38,000: No reduction.
University officials said these "reductions are temporary through Fiscal Year 2021, which ends June 30, 2021." The model will be reviewed to determine if these cuts will remain through Fiscal year 2022.
Here are other highlights of the cuts:
- Current hiring freeze will continue through Fiscal Year 2021.
- New campus construction projects will be postponed.
- University-sponsored travel is paused.
- Discretionary spending has been limited on items like office supplies, postage and printing.
- No overtime should be authorized or worked.
- Funding for canceled events should be retained and unspent.
KSU's President Diacon sent the following letter to faculty and staff regarding the cuts Monday:
Dear Kent State University Faculty and Staff,
The COVID-19 pandemic has thrown Kent State and all institutions of higher learning into unprecedented circumstances. At this point, our only certainty is uncertainty. During these unsettled times, I am so proud of the efforts you have made to help keep this university going. You stepped up, reached out and generously shared your time and talent to ensure that Kent State remains true to its commitment to student success.
I am overwhelmed by your Flashes Take Care of Flashes spirit, as demonstrated by the generosity of your response to the Kent State Emergency Grant Fund, which raised nearly $230,000 in just one month. You have remained true to our core values of respect and kindness in all that we do. Thank you.
Now I must ask you for even greater sacrifices to guarantee the long-term strength of our great university. Even as we strive to take care of one another, we must also take care of the institution and its short- and long-term financial health. Doing the latter will require implementing a series of cuts as we reduce our budget by 20% for Fiscal Year 2021, an effort made necessary by an all but certain 20% reduction in state support ($32 million), as well as anticipated declines in enrollment and in other revenue sources. In short, we will budget for a decline in revenues of $110 million compared to Fiscal Year 2020.
Make no mistake: We will retain our strong financial and academic reputation as demonstrated by our excellent bond ratings and state of Ohio financial health ratio, our continued rise in the U.S. News and World Report rankings (and many other rankings) and in the record number of graduates we are producing. Before COVID-19, we were well on track to deliver a balanced budget, yet again, and without drawing on reserves, for the third straight year.
It would be logical to ask why we are not planning to spend Kent State’s reserve funds to address our immediate needs. To begin with, we do not yet know how long the impact of the pandemic will last. Better to balance our Fiscal Year 2021 budget with expenditure reductions, leaving our reserves for use in future fiscal years. In addition, nearly 70% of our reserves are in investments that, were we to convert them to cash now, would lead to significant losses given recent market declines. These reserves took years to accumulate and expending them quickly could lead to the kinds of financial difficulties other institutions are experiencing. Finally, we would quickly reduce our reserves by 25% in just one fiscal year were we to cover our predicted shortfall in this manner.
We are strong, but now we must get stronger because of the stresses generated by the COVID-19 pandemic. Our students demonstrate their resilience every day. Now it is time to demonstrate our institutional resilience.
By following this link, you will be able to read in greater detail how we plan to balance our budget for Fiscal year 2020, which begins July 1, 2020. There is no way to sugarcoat this. We will freeze hiring, stop university travel, reduce spending on athletics and delay nearly all building projects. Furthermore, we will reduce the wages and salaries of our non-represented employees on an income-based sliding scale. I will lead this effort by reducing my own salary by 12.5 percent, and other campus leaders will see a 10 percent reduction in their salaries. We will offer a voluntary separation incentive package, and depending on how many employees accept it, we will have a better idea of how many layoffs and job abolishments will be needed. We will focus first on protecting student success efforts and on reducing administrative costs.
I grant that this may seem a far cry from Flashes Take Care of Flashes. But again, we must care not only for the individuals in our community, but also for the continued financial health of the university so that we can educate and graduate our students not just this year, and not just for the next several years, but for generations to come. With good decisions made today, Kent State will continue to transform lives through service, teaching and research.
Kent State has survived the Great Depression, the attacks of Sept. 11, 2001, and the Great Recession, bouncing back each time to rise to new heights of programmatic and individual successes and accomplishments. Our pledge is to work tirelessly to add value even while making difficult decisions. I thank you in advance for your understanding and support, and I salute each of you for the great work you do every day.