Updated, 4:40 p.m. Tuesday – The economic fallout from COVID-19 could cost the University of Missouri System $180 million, triggering layoffs, furloughs and other cost-cutting measures.
“The problems that we see based on the reductions in state support, also the softness in enrollment in the fall, and how the market is doing in terms of our investment outcomes, we expect a significant downtown for the university,” President Mun Choi said Tuesday during a virtual town hall for University of Missouri faculty and staff, “and that does require structural changes.”
Choi said financial decisions made in the coming weeks and months will be reevaluated when the four-campus System knows what enrollment for the fall looks like.
“We must plan for severe financial challenges for the next 60-90 days, with forward-looking realism about potential longer term impacts,” Choi wrote in an email to faculty and staff at all four UM campuses.
Along with Choi, the chancellors of the other three state universities — UMKC, UMSL and Missouri S&T in Rolla — all signed the letter.
Choi added that “contingency plans” would be made for cuts of up to 15%, which could look like “layoffs, unpaid leaves, restructuring and strict cost containment measures.”
UMKC leaders are working closely with Choi to determine how to best meet that target, spokesman John Martellaro wrote in an email.
“Our overriding priority in making these decisions is to preserve the quality of teaching and vital research at UMKC so we can continue to make valuable contributions to fighting the pandemic and rebuilding our economy in its wake,” Martellaro said.
MU Chief Financial Officer Rhonda Gibler said COVID-19 is unlike anything the university has dealt with before.
“There are likely to be impacts that change our ability to fund every position we’ve had over the last number of years,” she said at the town hall. “There are likely to be layoffs.”
Buyouts are less likely, said Vice Chancellor for Human Resources Patty Haberberger, because they could strain the UM System pension.
As of Sunday, some university employees who cannot work from home were already taking unpaid leave. After campuses closed in March, the UM System started refunding students for room and board, at a total cost of $25 million.
Christian Basi, spokesman for the University of Missouri, said students who applied for those refunds have received them. Students were eligible for a 45% refund of spring semester housing fees if they moved out of their residence hall. About 300 students, most of them international, are still living on campus because they don’t have anywhere else to go.
Basi said MU has tried to consolidate those students into as few buildings as possible – while still adhering to social distancing guidelines – to save on utility costs. He also said it is “too early” to know where the 15% of cuts Choi has proposed will come from.
For now, though, MU is not scaling back plans to build the NextGen Precision Health Institute, which Choi said will allow researchers to compete with their peers across the country. MU has $120 million allocated for the project.
Choi has said he himself would take a 10% pay cut, as will chancellors, cabinet members and many other senior administrators.
Jacob Marszalek, who teaches at UMKC and is the chairman of the Intercampus Faculty Cabinet, said it’s important for Choi and other leaders to show solidarity right now.
“That’s probably going to help save some people’s jobs,” he said.
Marszalek said that the figures Choi presented on Tuesday represent the “worst case” scenario for the UM System and the fallout from COVID-19 might not be that bad.
But if cuts are inevitable, he said it’s important to look out for vulnerable employees.
“We have contingent faculty, or adjunct faculty who don’t have any job security,” Marszalek said. “There are also non-tenure track faculty ... and then of course there’s the whole issue of our staff who support us who we really can’t do our jobs without. They’re vulnerable to furloughs and layoffs as well.”
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