Michigan State University President Kevin Guskiewicz told faculty and staff Thursday that the school would reduce its general spending budget by 9% over two years, blaming rising healthcare costs, operational expenses and declining state support.
However, the Union of Non-Tenure Track Faculty says those explanations lack transparency and don’t match the data it has — or hasn't — been shown. The UNTF represents close to 900 teaching faculty on campus and an additional few hundred MSU Extension employees by next year.
In an email to faculty and staff, Guskiewicz, alongside MSU’s finance office, said he and the university’s executive vice presidents have started to carefully review administrative unit and college budget reviews.
"We can clearly see the care with which unit leaders and their financial teams have proposed spending cuts, focusing first on things like external contracts, hiring freezes, travel allotments, programmatic costs and other areas before considering actions that would impact current personnel," Guskiewicz wrote in the email.
Guskiewicz called the cuts "a moment of sacrifice," saying that the Office of the President will absorb the 9% cut in the coming fiscal year, as well as additional cuts the following year. He also said that there are plans across units to not fill vacancies while eliminating executive positions to reduce "administrative layers" within the organization.
"Our structural deficits stem primarily from double-digit increases in the cost of centrally funded employee health care and other operating cost increases, plus a general fund budget deficit from un-budgeted headcount and financial aid at the end of last year,” Guskiewicz said. “While MSU has operated with modest recurring deficits that we’ve been able to cover in prior years, we now view these as unsustainable.”
Guskiewicz also gave notice that MSU is anticipating reduced income from federal actions such as research cuts, restrictions on international student enrollments and possible additional state appropriations shortfalls, saying the magnitude of the effects is uncertain. These effects will add to "our financial and planning challenges," Guskiewicz said. “So, we must address our current budget and the significant increases in health care and operating costs to better navigate uncertainties."
Guskiewicz said other budget considerations include state appropriations and the university’s provision of student financial aid, noting appropriations per resident undergraduate student have fallen by 44% since fiscal year 2000 when adjusted for inflation.
Still, Guskiewicz praised MSU's ability to "hold tuition increase rates to the lowest level of all Michigan public universities" and consistently increase university-funded financial aid, the latter of which has grown by an average of 7% annually.
Continuing on in the email, Guskiewicz addressed questions about continued investments in the university’s infrastructure, noting that facilities projects are often funded through non-general fund sources, public-private partnerships or the recently launched comprehensive fundraising campaign.
"Such investments in our future are critical to generating new opportunities, expanding our reach and contributing to Michigan State’s long-term success," Guskiewicz said. "At a time when general fund resources are limited, it is more important than ever to tap into other revenue sources to advance our university in creative and innovative ways, but those sources often come with more restricted uses."
As far as financial planning, Guskiewicz said MSU’s budget office had been working on structural improvements to its financial planning and practices before his arrival in March 2024.
"When I became president, I shared that one of my initial priorities would be to comprehensively assess MSU’s financial health and consider how we can best invest our resources to achieve operational excellence," Guskiewicz said. "Since then, I have looked closely at our budget model and the state’s appropriations formula and have examined stress points, available reserves, hiring and spending trends, and forecasted operating budget trends."
Guskiewicz said the university has brought its deans and vice presidents into “more detailed discussions” around identifying strategies, potential budget savings and specific actions that could be taken to relieve the budget pressures, asking all units to submit its budget proposal before June 6. These budget proposals aim for general funding reductions of 9% over the next two years.
The proposal review process will take into consideration its "alignment with university goals and priorities," Guskiewicz said. In particular, executive leaders will be looking for "potential economies of scale" and "potential conflicts or overlaps across unit submissions." Executive leaders will be in direct contact with units by the end of June.
Towards the end of the email, Guskiewicz said he recognized the concerns about how the university’s financial challenges will impact the Spartan community, making clear that MSU is not in a financial crisis, but making "thoughtful, proactive reductions" to avoid more severe and reactive cuts in the future.
"I know this has been difficult, and I am grateful to all Spartans for showing patience and continuing to advance the university’s critical teaching, research and outreach missions amid uncertainty," Guskiewicz said. "We are all in this together, and through our collective efforts, we will ensure the university’s financial health moving forward."
For Victor Rodríguez-Pereira, the president of The Union Non-Tenure Track Faculty, there’s been a lack of transparency and difficulty in getting straight answers about the university’s financial situation throughout the entire process.
"There have been no clear answers as to the impact these cuts will have on the quality of education offered at MSU," Rodríguez-Pereira wrote in an email to The State News. "Most of the information I know about these cuts has been through word of mouth, people at other units sharing information not available to the wider university community (most importantly, to the faculty) and this all led to widespread misinformation."
Rodríguez-Pereira said the timing of the announcement was troubling as well, since President Guskiewicz announced the cuts and the process through which the cuts would be made in early May when faculty was “neck-deep” in finals, and students were gone, stating there was no time to even ask questions until it was too late.
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"We have been in communication with several people across many different offices on campus, and are still getting in touch with others so that we can get as much information as possible," Rodríguez-Pereira said. "We have also expressed our concerns publicly through our communications with our members, and I have done the same in my capacity as Faculty Senator."
MSU Faculty Senate Chair Angela Wilson said about two weeks ago, the University Steering Committee supported a resolution regarding the budget, saying the resolution expressed some of the faculty's concerns.
"Today's messaging followed a discussion that the President had with Faculty Senate leaders last week to follow up on the resolution, where we encouraged further communication," Wilson said in an email to The State News. "Overall, I am sure that all of us are surprised about the significant budget issues."
Wilson however said these types of challenges are occurring at universities all over the country, stating that there is a balance between the rising costs of what it takes to run a university, from teaching, to support services, to buildings and trying to keep costs down.
"A 9% reduction is significant," Wilson said. "Any trim impacts the university in some way. At this point, not all of the reductions have been shared yet, as these are still being determined."
Noting other concerns UNTF has with the budget cuts, Rodríguez-Pereira said they are concerned that "MSU is using (or is trying to use) the real danger posed by the assault on higher education by the federal government as a pretext for austerity measures that to this day they have failed to justify with data or any other information."
"We've heard from different sources that part of the deficit is caused by MSU's legal settlements from the last decade, as well as other similar liabilities," Rodríguez-Pereira said. "It's concerning that MSU might be passing the bill on its employees for the failures of our leaders." (Rodríguez-Pereira would later say that during a May 27 meeting, University Steering Committee Vice Chairperson Jack Lipton referenced the reasons behind MSU’s budget deficit.)
Rodríguez-Pereira acknowledged MSU being vocal about wanting to avoid personnel cuts. However, he said many academic units have been cutting their budgets since the COVID-19 pandemic. As a result, there are many academic units where faculty have already been teaching courses above their usual workload because many of the units were already understaffed.
"These cuts are going to force many departments to have to cut personnel, at which point I wonder: who's going to teach those classes, faculty members who are already overworked and underpaid? UNTF represents some of the lowest-paid faculty on campus," Rodríguez-Pereira said. "Connected to this, and most importantly, what quality of education can we offer, considering all this? We see this, while seeing MSU approving spending money building new athletic facilities and similar attractions, and it makes us wonder if we are a university or an athletic franchise."
In response to today’s email sent by Guskiewicz, Rodríguez-Pereira said the contents inside are new information for people in his camp, stating they don't know what it means, asking if MSU made a mistake with last year’s budget.
The confusion and dissatisfaction with MSU has led the UNTF to launch a petition with the goal of putting the cuts in the university’s general spending budget on pause.
"MSU exists as a public investment made by the people of Michigan," the email sent to UNTF members reads. "MSU students and their parents have an immediate interest in the damage being done to the school, and alumni deserve to know about the devaluing of their degree."
