Monday, November 29, 2021

MSU Faculty Senate members call for retroactive restoration of salary, benefit cuts

November 22, 2021
<p>The Hannah Administration Building on Sept. 20, 2020.</p>

The Hannah Administration Building on Sept. 20, 2020.

A Michigan State University Faculty Senate resolution proposed on Nov. 16 called for a “retroactive restoration” of all salary reductions and retirement matches, as well as a reinstatement of merit raises to non-union academic managers, faculty and staff.

These benefits were originally cut in September 2020 following a university estimation that predicted approximately $300 million in losses for the 2020-21 fiscal year.

The pay cuts ranged from 0.5% to 8%, averaging 2.3%. Retirement plan matching contributions were halved from 10% to 5%. Normal annual merit raises of 2% were halted completely.

The 10% match for retirement and 2% merit pay raises are planned to be reinstated in January 2022. The salary reductions were removed this summer, MSU Deputy Spokesperson Dan Olsen said.

However, the senate, as well as non-member faculty, claim that the losses that inspired these cuts never came to fruition — and therefore a pay-back dating back to the enactment of them is appropriate. 

Senate member Jack Lipton detailed the supporting evidence for the proposal in a presentation given at the Nov. 16 meeting

According to Lipton, MSU received $137 million more than projected in its 2021 budget.

The reasons for this higher amount are varied. The university received approximately $87 million in federal aid, sourced from the Higher Education Emergency Relief Fund and American Rescue Plan Act.

The Michigan state legislature protected higher education funding from cuts in its 2020-21 budget. Lipton’s presentation said the state budget protection in particular allowed the university to avoid a projected $43 million loss in state funding.

Additionally, the university lost approximately $7 million less from tuition losses than projected. The tuition losses totaled around $56 million, compared to the $63 million projected.

“So it’s about the promissory note, right?” Lipton said. “They were like ‘This is what’s going to happen. We guarantee we’re going to have this financial burden.’ The burden didn’t happen.”

Lipton cites the university’s record return of 41.7% on investment for its endowment as another indicator of financial health. He points to the $1.79 billion in unrestricted funds that could potentially be used to assist in the financial restoration.

“So because it was such a huge amount, the university has more than enough to be able to cover the cost the faculty feel,” Lipton said. “The university won’t feel (the cost) the same way the faculty feel it.”

Provost Teresa Woodruff responded to endowment-related statements during the meeting by saying the university is restricted in its spending of those funds.

“We are governed by the laws of fiduciary care, which does limit the reasonable payout,” Woodruff said.

Lipton also highlighted the reach the benefit cuts have had on the financial situations of faculty and staff across campus.

In his senate presentation, Lipton estimated that the average professor at MSU with a 25-year retirement horizon would lose $70,000 in lost returns from the 5% cut to retirement matching. As for the loss of the 2% merit pay raises, his estimation for professors with 20 earning years left was a loss of $73,000.

“MSU’s administration is rightfully concerned about the prudent use of reserves,” Lipton said during the presentation. “They have a responsibility to the future of the university and its ability to thrive. But also, part of what is the university’s intellectual assets include the faculty and the academic staff. What about their need to thrive?”

In light of these estimations, some faculty, such as College of Communication Arts and Sciences professor and faculty senator David Ewoldsen, are planning on retiring sooner than planned.

“I know a number of colleagues, my age or older, who are talking about retiring much sooner than they (planned to) retire,” Ewoldsen said during the meeting. “Myself, I had planned to work here well into my 70s. I will be here until I’m 65, and that’s it — and that’s five years because of how we’re being treated.”

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While these estimations talk about the future, many faculty and staff are experiencing the financial effects of the cuts right now. Faculty senate chairperson Karen Kelly-Blake said child care, for example, has been difficult for many to obtain.

“Some of the big issues has been centered around caregiving and the loss of additional resources to attend to extra expenses related to caregiving,” Kelly-Blake said. “So that’s been a key issue in the faculty senate.”

Lipton has heard of junior faculty getting parental financial support — something he sees as a sign of big financial problems.

“(Junior faculty) were in such financial straits as a result of the pandemic and these additional cuts … that they were getting financial assistance from relatives,” Lipton said. “And so I think when you’re at the point where you have a full-time job at a Big Ten university ... and you have to ask family members to make ends meet, there’s something wrong right there.”

While the faculty senate is an advisory-only body, the members hope to work together with the administration in order to come to a solution for these issues, Lipton said.

Secretary for Academic Governance Tyler Silvestri, who is not a senate member, said that the senate has been “team players” during this process. He said this includes when the benefit cuts were initially made and when other faculty organizations pressed them to ask administration for pay rises—such as in April 2020.

“This isn’t this greedy thing where they’re like ‘Oh, we see there’s money we want it,’” Silvestri said. “What this stems from … is the data came out, right? And now we look and go ‘It seems like they probably could’ve gotten paid.’”

A petition was created shortly after the meeting, calling for the provisions of the senate resolution to be enacted by MSU administration. It has received 946 signatures at the time of publication.

The university said they are continuing to look at the budget, and are open to working with the senate on this issue.

“The pandemic has been incredibly difficult on many throughout our community, including financially,” Olsen said in an email. “We continue to evaluate our financial situation and we are pleased to be able to notify faculty of a 2% increase in their base pay in addition to restoring full retirement benefits.”

Editor's note: This article was edited on Nov. 23 at 9:14 a.m. to correct the merit pay raises' reinstatement time frame.

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