SALEM — Salem State University has proposed five weeks of furlough for all of its employees in an effort to close an $8.5 million budget gap.
In a letter Tuesday to faculty, administration and staff, Salem State President John Keenan said the university faced a $26 million revenue deficit for fiscal 2021 due to the financial impact of the COVID-19 pandemic. Officials were able to find savings and refinance debt to make up for much of the lost revenue, but were still left with an $8.5 million gap.
The furlough proposal, Keenan said, will help close that gap. It calls for 25 days of unpaid time off, a standard level that Keenan said would affect union and non-union employees, administrators and even himself.
"The most important thing is to realize that, at this point, it's just a proposal," said Keenan, who said he fully respects the unions' contracts and the need to bargain. "At the same time, it has been a devised plan so we can minimize any impact to our operations on campus and believe we can do that, especially if we're able to frame some of the time for some of our staff in the summer and winter breaks."
The university's board of trustees approved the plan and other budget-saving measures on June 10.
The plan was sent to three union chapters on campus: the Massachusetts State College Association, Association of Professional Administrators and the American Federation of State, County and Municipal Employees. It's not clear when talks will start, but Keenan noted that one of the unions already has a meeting scheduled for July.
The furlough days would save the university roughly $7.4 million.
A similar process took place in Salem's public school system, where union negotiations resulted in Salem Public Schools teachers agreeing to one day of furlough, no general wage increase and less professional development time in the coming school year in an effort to cover a budget gap without resorting to layoffs.
Keenan said, depending on union negotiations, there are other ways the university can make up for the revenue deficit. But that also depends on some moving targets, including state funding.
"Ultimately as well, as I keep talking about the uncertainties, the enrollment for the fall isn't certain at this time," he said. "Deposits are strong, but we won't know what happens until they show up in September."
The furlough days could affect some employees' retirement benefits. In his letter, Keenan said a person "can use up to 20 days of furlough per calendar year with no impact on creditable pension time. However, if an employee is close to retirement, the furlough could impact their pension's average earnings calculation."
Health insurance benefits will remain in place so long as employees continue to pay their portion. Employees can also apply for unemployment benefits while on furlough.
The letter also firmly stated that furloughed employees are prohibited from working during their time off.
"Supervisors are to work with their staff to reduce workload expectations," Keenan wrote. "This is not a pay cut program; it is strictly a furlough."
Last year, Salem State offered a buyout program to save money in response to ongoing "demographic, economic and state funding trends." A total of 82 employees accepted the voluntary buyouts. The university planned to fill about one-third of those positions, and the program ultimately saved Salem State roughly $6 million. Those savings, however, were for the fiscal year that ended Tuesday.