June 23, 2010

Faculty-Staff Compensation Update

I wanted to share this message, which I sent to our faculty and staff yesterday:

Recently I shared with you information that all Texas state agencies have been asked to plan for a possible 10% budget reduction in the 2011-12 and 2012-13 fiscal years.  This is in addition to the 5% budget reduction that we had already made at the request of the state for the current biennium.

In light of this additional directive from the state and the increasing uncertainty about its implications for our financial future, the University Budget Council reached the decision that UT cannot afford to commit to permanent salary increases for fiscal year 2010-11.  However, the Budget Council concluded that we can prudently implement a one-time, merit-based salary payment program for both faculty and staff.  The raise pool amounts to approximately 2% of total current compensation for faculty and staff.

These merit-based, one-time salary increases will be administered in the form of a single payment, probably in November of this year.  All employees are eligible for consideration, but not all employees will receive this one-time merit payment.

There are some exceptions: For example, employees whose salaries are funded through external grants (“26 accounts”) will be eligible for permanent merit-based increases.  There may be other employees in self-supporting units who could receive permanent increases.  Salary increases that result from faculty promotions will be permanent.  Performance-based contract obligations will be honored.  And in some cases, it may be necessary to consider and respond to individual employment circumstances.

All one-time merit payments will be included in computations that determine retirement benefits in the Teacher Retirement System (TRS) and in the Optional Retirement Program (ORP).

While not ideal, we believe this plan is our best course of action.  We will continue to look for creative ways to deal with budget challenges in the future.  I appreciate your hard work, dedication, and service to UT, which are all the more crucial in this difficult economic period.  Thank you for your commitment to the University.

Bill's Signature






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3 Responses to “Faculty-Staff Compensation Update”

  1. Dear Bill,

    With regard to budgetary tightening, could you address the concerns in this recent NY Times article that I’m sure you’ll have seen (http://www.nytimes.com/2010/07/10/education/10education.html), which draws chiefly on this report (http://deltacostproject.org/analyses/delta_reports.asp). The report highlights how spending per student on non-academic areas (e.g., student services, legal fees, PR, general administrative costs) went up much faster at many elite higher-education institutions in the period 1998-2008 than spending on academic areas. It’s hard to disaggregate the data in the report, but it seems like public research institutions in Texas are doing well (chart on p. 29 of the full report): the state subsidy for core education costs is higher than the national average (54% over 51%), though spending per student, again on core education costs, is 8th from last ($11013 vs US average of $14058). Could you reassure concerned friends and supporters of the university that UT is resisting the trend toward higher spending on what I would characterize as fluff, i.e., the kinds of non-academic areas I noted above?

    Best wishes,
    Dhananjay Jagannathan (BA ’09)

  2. Drew Carls says:

    President Powers: Thank you for frequently communicating with us (staff) about compensation.