April 16, 2020

Dear University of Oregon community,

At the virtual town hall for faculty and staff earlier this month, we told you that we would follow up regarding how we can implement principles of shared sacrifice during these uncertain times—lessening the burden on the few by spreading it among the entire community. President Schill indicated that we had started down this path by announcing voluntary pay cuts for himself and the vice presidents and athletic director—a decision quickly mirrored by our deans. We were deeply gratified that, after his announcement, many of you indicated you would also volunteer to take a pay reduction to help protect our community. We cannot tell you how proud we are that so many of you are willing to selflessly give back to this institution and its community members. As many of you have recognized, unprecedented times necessitate approaches that are not typically contemplated. It is in that spirit that we write to share with you the outline of a preemptive plan that we have been discussing with union partners and employee groups that is founded on the principle of shared sacrifice.

Before talking about that plan, it is important to emphasize something that many of you know: the University of Oregon is facing extraordinary budget uncertainty due to the COVID-19 pandemic. Our two biggest sources of revenue—state appropriation and tuition—are in question. While we cannot predict the future, the Oregon Legislature’s response to the last recession was to cut our budget by 45 percent, and some experts are predicting a 15 percent enrollment drop across higher education nationally as a result of COVID-19. Cuts of that magnitude, individually or in some combination, would create grave financial challenges for the UO. As many of you know, approximately 80 percent of our expenses are personnel. To date, our auxiliary operations have suffered the most immediate impacts of COVID-19, with many facilities and services closed for the term and net losses projected at more than $25 million; these realities necessitated the employment actions announced earlier this week.

While the uncertainty we face is daunting, we don’t know whether state appropriation cuts and/or enrollment reductions of the magnitude that some predict will actually materialize. Rather than take drastic action without real information and data, we hope to establish a very progressive pay reduction (PPR) plan now as a contingency. The plan would only be implemented if we end up facing significant drops in state appropriation or enrollment. This plan would help to share the burden of reductions across our community—protecting our lower-wage workers to the greatest extent possible. While we would rather not be discussing temporary pay decreases, the reality of our budget means that, should the university experience significant drops in state appropriation or enrollment, we have to talk about reducing personnel expenditures as a mitigation approach. Again, this is a contingency plan that would only be triggered by a large budget challenge that occurs before the end of FY22. The details of the draft PPR plan are available in this document.

While we wanted to begin to share this plan with the broader campus, we are still talking to our employee groups about it and other budget-reduction measures, so the details of this plan will likely change in the coming months. If we move forward with this plan, in the interests of equitable and shared sacrifice, our goal would be to apply it across all of our employee groups, with the exception of undergraduate and graduate student employees, and those supported on grant funds, in keeping with federal regulations. We will keep you updated as discussions progress.

We also want to take this opportunity to address the way uncertainty related to enrollment will impact upcoming contract renewals for a number of our instructional faculty for next year. To prepare for what we expect could be an enrollment drop, we must either put in place a plan such as the PPR or retain the ability to quickly align our instructional capacity to the number of enrolled students. We are working with United Academics on these options. If we are not able to get the PPR or a similar plan in place, please know that we will issue contracts for the length of time provided for under the CBA and our policies. However, we will likely need to make final FTE assignments later in the summer—giving us time to understand what our actual enrollment will be for next year. In that event, we will be messaging our faculty about the timing and decision-making underlying FTE increases for the next academic year.

We are facing very challenging times for our community. While the news we share today may be unwelcome, we felt it best to openly communicate with everyone some of the risks that we are facing and our current thinking about how to approach them. We view the entire community as partners in this work and will continue to keep you in the loop as these plans develop.

Patrick Phillips
Provost and Senior Vice President

Jamie Moffitt
Vice President for Finance and Administration and Chief Financial Officer