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Furloughs, pay cuts proposed for UC staff and faculty

Responding to $800 million in reduced funding — and lots of employee feedback — President Yudof unveils "graduated approach" to sharing the system's budget pain

By Barry Bergman, Public Affairs | 10 July 2009

BERKELEY — With UC administrators scrambling to fill a gaping $800 million hole in next year's budget, faculty and staff have been living for weeks in the shadow of looming furloughs, straight pay cuts, or both.

This morning, UC President Mark Yudof revealed the shape of the future for many of the system's 120,000-plus employees, including faculty and staff at all 10 campuses. When the Board of Regents meets next week in San Francisco, he announced, he will propose what he termed "a graduated approach," mandating unpaid furlough days for faculty and staff that reduce pay on a sliding scale, ranging from 4 percent for those in the lowest salary band to 10 percent for those in the highest.

Instead of straight salary reductions, the vast majority of the cuts will come in the form of furlough days — as few as seven for academic-year faculty with salaries under $40,000 and 11 days for full-year staff in the same pay bracket (a 4 percent pay reduction), to as many as 26 for employees earning more than $240,000 (a 10 percent pay reduction). Members of the senior management group — chancellors, deans, and others in key leadership positions — will get only 10 furlough days, regardless of the size of their salary reductions.

The unpaid furloughs are expected to save the UC system $184 million.
If approved by the regents, they would take effect Sept. 1, reflected in Oct. 1 paychecks.

Yudof, who unveiled the plan at a press conference at the Office of the President's Oakland headquarters, said he tried his best to apply the "sharing the pain" principle, but observed that "there is no perfect justice."

The proposal is significantly different from those he put forth last month — a response, he said, to concerns expressed directly to UCOP by more than 3,000 staff, faculty, and others who responded to his request for comments on the three options floated in June.

Exempt from the provisions are academic and staff employees whose salaries are paid entirely by government or private contracts and grants, including those at Lawrence Berkeley National Laboratory whose salaries are subject to U.S. Department of Energy contracts, along with postdocs and some student employees. Those who have voluntarily cut back their hours and salary through the Staff and Academic Reduction in Time (START) program will be able to apply existing reductions against their mandated furlough days, but will not be penalized with cuts beyond those laid out in the new proposal.

Holidays will continue to be paid, and Yudof said he will recommend to the regents that pension and other benefits be protected at pre-furlough salaries "for at least this year." Employees' paychecks will be reduced by the relevant amount consistently throughout the year, no matter when the furlough days are actually taken. If the plan is approved by the regents, each campus will determine how the furlough days will be taken — through campus closures, at the discretion of units based on business needs, as each employee chooses, or a combination of these options. Faculty, however, will likely not be permitted to take furlough days when they have classes scheduled.

Accompanied by Russell Gould, the new chair of the Board of Regents, and staff and faculty representatives, Yudof kicked off the press conference with a warning about the impacts of a 20 percent reduction in state funding. "The potential of this cut is devastating," he said. "There will be program cuts, probably job losses, and virtually everyone will be affected."

More than 700 employees have already been laid off systemwide. In an e-mail message to the Berkeley campus, Chancellor Robert Birgeneau estimated that Yudof's proposal would save enough to spare some 450 staff positions here "that would otherwise have to be eliminated immediately." Such a loss, coming on top of existing cuts, "would have rendered many units virtually dysfunctional," he wrote.

The chancellor promised to "quickly begin to consider how to best implement the furlough days at Berkeley, in consultation with the campus community."

Both Mary Croughan, chair of the systemwide Academic Council, and Bill Johansen, staff adviser to the regents, praised Yudof for his commitment to what Croughan called a "consultative process" in adapting the proposal to staff and faculty concerns. "Shared governance has been strengthened" at UC, Croughan said.

Gould, a former director of finance for the state of California, warned that the furlough proposal — part of a package of systemwide measures that include student-fee increases, $60 million in cuts to OP operations, and debt restructuring — is "a solution for the short term, not the long term." Vowing to "forge a new path for the future of the university," he said Yudof has made "great progress, but clearly there's more work to be done."

Yudof expressed "a lot of confidence we'll get through this," but noted the dire risks facing the UC system as it is now financed.

"The university is not broken," he declared. "But the funding model is broken."