May 29, 2020
Dear faculty senators,
We write to you in our capacity as officers of the University of Minnesota, Twin Cities chapter of the American Association of University Professors (AAUP). As you are surely aware, President Gabel has scheduled a special meeting of the Faculty Senate for June 1 to discuss a proposal from the Finance and Operations Work Group for meeting the financial crisis arising out of the pandemic. This proposal identifies salary reductions and incentives for early retirement as means for meeting budgetary shortfalls in the immediate future. A vote on this proposal will be taken at a second special meeting of the Faculty Senate scheduled for June 9.
We applaud the Work Group for its care in following the principles advocated by the university community as well as President Gabel to structure the salary cuts that it has proposed. However, we believe that the proposal falls short in certain respects. We write to highlight these matters and urge you to pose questions and voice your views in the discussion that will take place on June 1.
Our primary concern with the proposal is that it focuses almost exclusively on what may be asked of us as university employees to address the crisis. The draft report provides no information on any of the other steps that the university could be taking in addition to cutting compensation. In particular, we believe the following points should be addressed, to enable us to properly understand and possibly approve what is being asked of us:
Reserves: The cover memo accompanying the Work Group’s draft report stated that “we will use as much of our financial balances and reserves as is prudent in these uncertain times to solve our budget challenges.” How much money is currently in the reserves, how much has the University drawn on since the pandemic began, and what are the plans for future use of these reserves?
Endowment: Has increasing the rate of withdrawal from the endowment been considered? How might a small increase in this rate of withdrawal—a step already taken at Northwestern and Princeton Universities—contribute to addressing the budgetary shortfall?
Debt renegotiation: Renegotiating debt-servicing is happening throughout the US, from corporations to personal mortgages. Could the University glean some savings by doing this? If so, how much?
Sunset clause: The draft Work Group report states that “Should the budget outlook for the second half of FY21 look more favorable than anticipated, the University could potentially dismiss the second half of the furlough schedule, and roll back pay reductions, for January through June of 2021.” What metrics will be used to assess whether the budget outlook is “more favorable than anticipated”?
Our view is that full transparency on these and other steps that have been considered, adopted, or rejected, together with an argument for taking the chosen course, is essential to a collaborative approach to resolving the crisis. If these details are not presented at the June 1 meeting, we suggest you require them to be presented before the vote is taken on June 9.
In addition, the AAUP chapter recommends changing the proposal for salary reductions to make them more equitable. Considering that the living wage for a family of two adults and two children in Hennepin County is estimated to be over $58,000 (https://livingwage.mit.edu/counties/27053), we suggest that the floor for these cuts be raised from $40,000 to $60,000. Any shortfall created by raising this floor could be offset by slightly increasing the cuts in salary ranges of $100,000 and beyond, where the impact of such cuts would be felt much less acutely.
With best wishes,
Eva von Dassow, President
Sumanth Gopinath, Vice-President
Teri Caraway, Treasurer
Gopalan Nadathur, Secretary
Ruth Shaw, Member-At-Large
American Association of University Professors, Twin Cities Chapter
* Posted with written permission.