Last updated on June 24th, 2020 at 11:48 am
Marquette University is suspending its employer contributions to the university’s retirement plan, reducing leaders’ salaries and implementing other cost-cutting measures to close current and future budget shortfalls.
A smaller than expected incoming freshmen class, combined with increased expenses related to the COVID-19 pandemic, have contributed to a $15 million budget shortfall for fiscal 2020, president Michael Lovell said in a campus-wide email Monday.
It cost $11 million to refund a half semester’s room and board when the university converted to remote learning this spring during the pandemic. Meanwhile, undergraduate enrollment for the fall is 16% below what the university budgeted for incoming students.
“It’s important to understand that this decline in freshman enrollment does not simply impact this year; rather, its effects will be sustained over the next four years. That is why we must take both short- and long-term risk mitigation steps,” Lovell said.
The university anticipates “known financial risks” of about $20 million to $25 million in fiscal year 2021, and that number could be higher depending on final first-year student counts, attrition among returning students and whether the university has to return to a virtual format for any part of the year. Marquette plans to resume on-campus operations in the fall, with an adjusted academic calendar to mitigate the effects of a possible second COVID-19 wave in the winter.
The university unveiled its short-term cost-cutting plan for the upcoming year, which includes suspending its employer contribution to Marquette’s retirement plan, for a savings of $10 million.
About 35 leaders – those included in the University Leadership Council – will take a 5% salary reduction for the fiscal year. The leaders include all vice presidents, deans and vice provosts. Head men’s basketball coach Steve Wojciechowski and head women’s basketball coach Megan Duffy also volunteered to take reductions. Lovell, along with provost Kimo Ah Yun and chief operating officer Joel Pogodzinski, volunteered to take a 10% salary reduction.
Additional measures include canceling merit increases for faculty and staff – for a savings of $4 million – and reducing discretionary spending by 10% campuswide, for $6 million in savings. Nonessential hiring will also remain paused.
“As we considered what potential actions to take as a campus, our principal goal was to keep everyone employed and to equitably have everyone do their part,” Lovell said.
Lovell noted that more than 250 donors contributed a total of $40,000 to the university’s employee emergency grant fund for temporarily furloughed employees during COVID-19.
Lovell said the university is preparing for a “wide range of scenarios” in the fall, with safeguards including smaller class sizes, some online instruction, using PPE, symptom checking and other measures.
“No matter what happens, it’s clear the fall 2020 semester will look and feel different than past semesters,” he said. “We should all anticipate changes to how we interact with each other so that we may demonstrate care and concern for the most vulnerable among us and help limit the spread of the coronavirus.”