Wednesday, May 22, 2024

University freezes hiring and travel amidst “significant financial pressure”

NewsCampus NewsUniversity freezes hiring and travel amidst “significant financial pressure”

KONNER METZ
Editor-in-Chief




The university is instituting immediate freezes on hiring and travel, along with delays on capital projects.

In a letter sent out to faculty and staff Tuesday, university President Dennis Assanis announced a litany of cost-saving measures in order to combat rising state health care costs.

Assanis said the university is expecting fiscal year 2024 costs to increase by anywhere from $20 million to $40 million.

“Despite meeting our enrollment targets for FY24, further increases in scholarship needs and education delivery costs, especially escalating health care expenditures, have accelerated budget pressures,” Assanis wrote in the letter.

Assanis and the administration attended the state’s Joint Finance Committee (JFC) hearing last week to request additional funds not outlined in Gov. John Carney’s proposed budget. The president mentioned during the hearing that hiring would pause indefinitely.

“The university is under significant financial pressure from multiple sources this year,” Assanis told the JFC on Feb. 1. “High inflation rates have driven up prices for all the goods and services that the university needs to continue to operate.

“Most importantly, higher personnel costs, especially for health care, have made it more expensive for UD to attract and retain the excellent faculty and staff members who are essential to providing our students with great educational opportunities.”

In May of 2020, the university froze salaries during the coronavirus pandemic. Top administrators such as Assanis, Executive Vice President John Long and then-Provost Robin Morgan took 10% salary cuts

The most recent tax records, which are from 2021, indicate that Assanis made around $1.6 million, Long made about $634,000 and Morgan (who is now retired) made about $621,000. No salary cuts have been announced by the university for the current freezes.

What areas will be impacted by the freezes?

Contractual salary increases will stay in place, but any other reviews for raises will be on hold until further notice. Non-essential travel is frozen, and the university is asking employees to delay travel past this fiscal year or reduce expenses for any travel that cannot be canceled.

University events are expected to take a hit as well, with faculty encouraged to consider moving events online and use funding from gifts and outside sources.

Capital projects will be delayed, such as the demolition of the Christiana Towers on North Campus. Projects near completion or funded by outside sources and gifts can continue.

Larissa Veronica Heather/THE REVIEW

In a statement to The Review, the university explained its position regarding the cost-saving measures.

“Higher education institutions across the country are having to navigate both near- and long-term financial challenges,” the statement read. “In a message to University faculty and staff, President Assanis articulated the significance of proactive control measures that the University of Delaware is implementing in order to best contain these challenges, while supporting sustained excellence in academics and operations. 

“These steps represent a strategic approach toward balancing, conserving and growing University resources as we continue to provide the high-quality education that our students expect from UD both now and into the future.”

Increasing health care costs

During last week’s JFC hearing, Assanis asked legislators to help the university financially amidst an expected $34 million increase in FY24 health care costs. In FY23, the university paid $80 million in health care, Assanis said. 

Health premiums for state employees will continue to rise in the future. Delaware Online/The News Journal reported that a 27% increase in premiums for employers and employees is on the table of the State Employee Benefits Committee.

Carney’s FY25 budget sets aside an additional $200 million to address upcoming health care deficits the state faces. The state spends $2 billion on health care annually.

University requests funding for financial support program

At last week’s JFC hearing, Assanis also requested state assistance in funding for the First State Promise Program, which covers tuition for in-state students whose families make less than $75,000. Partial costs are sometimes covered for families over the $75,000 mark.

Assanis told the committee that around 2,300 Delawareans benefit from the program.

Carney’s budget already allotted a $2.5 million bump for the program, but Assanis requested an additional $1.7 million from the state. 

For FY24 and FY25, the university is planning to commit $15 million each year to the program. Assanis would like to see the state match that contribution.

“Since we rolled out the program, we’ve been asking the state to match UD’s investments,” Assanis said. “If we don’t get the additional funding from the state, UD would have to consider adjusting the sliding scale of financial support for families that make more than $75,000, or support fewer students altogether.”

This is a developing story and will be updated.

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