President David Schmidly said UNM employees who participate in the voluntary furlough program, which he announced this week, will help UNM avoid cutting jobs.
"We have got to hold the line on spending. If we don't, we're going to get in a situation where we can't cope with our reduced appropriations without doing something major with our payroll, and I want to try to avoid that," he said. "And so, if I can reduce expenditures, get people that want to voluntarily do some things that save on their salaries, and don't fill those vacancies that come up that we can deal with in some other way, then we can save money and be in a better position to cope with the budget downturn."
Staff Union President Terry Mulcahy said it's unlikely that many employees will be able to take unpaid time off.
"I mean, who's got the money around here to do that except the higher up administration?" he said. "I don't know too many people, especially those making $30,000 and less who are going to be able to take off a week or two without pay."
Schmidly said he is aware that many employees taking time off are likely to have side projects they'd like to work on - he'll be working on three books in his academic field - and also have an additional source of income.
"I think it will be primarily higher-paid people that are in a financial situation where they think this is something they're doing that helps the institution," he said.
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Schmidly said he will set the example when the furlough program begins in July by taking off 15 days, either all together or spread out.
University spokeswoman Susan McKinsey said this would amount to a nearly 6 percent salary cut for Schmidly, which would amount to more than $20,000.
Mulcahy said he was surprised Schmidly would be willing to give up some of his pay, after the president had said he would never consider such a measure.
"I asked him that specific question in the town hall - if he would be willing to give up any of his salary or ask his VPs to - and he said 'No way,' he would never ask anyone to do that and he sure as hell wasn't going to give back any money," Mulcahy said. "He made it pretty clear that he wasn't going to do that."
Marc Nigliazzo, vice president of Rio Rancho operations, said he will likely participate in the program but understands some employees won't be able to.
"I think we're going to have some individuals who simply can't do it, and I think we're going to have people - especially in the lower salary levels - who have financial obligations that do not make this possible," he said. "And even for some individuals who are in the upper salary range, depending on whether they have children in college . that may make it more or less difficult for them to participate."
Nigliazzo said that since his only child is already grown up, his financial responsibilities are such that he can afford to take a pay cut to help out the University.
Fighting the trend
Schmidly said he does not foresee having to start mandatory furloughs but that there's no guarantee UNM will not succumb to pressures its peer institutions have.
"This economy is changing so quickly (that) it's hard to predict what you'll do a month or two months from now. I'm certainly not envisioning anything other than a voluntary furlough program, but look at what's happened at Arizona State."
Arizona State fired more than 500 employees, and all employees including the president went on a furlough.
Nigliazzo said Schmidly's voluntary furlough program should help UNM avoid the same fate.
"I hope our situation will get nowhere near that, but always when you're in a situation where you say that the last thing we want to do is lay people off, then you look for every other conceivable option," he said. "This is a viable option, and I think those that can participate will."
Schmidly said UNM is in a safer financial situation than Arizona State because of the actions he took last semester.
"Part of what I did in the fall, when I put this pause-and-hold in place, as unpopular as it was, it has positioned us now to deal with the solvency program without having to do anything other than voluntary furloughs," he said.
However, Mulcahy said the atmosphere at the University shows signs that firings aren't so unlikely.
"We're seeing problems crop up, and my understanding is that happens when there's kind of uncertainty on the job, that you start to see an increase in problems between supervisors and staff," he said. "People's performance is being monitored more closely, and they're having to have more meetings with their supervisor to go over their plan for improvement."
Mulcahy said this could be a sign that supervisors are considering whom to cut if firings are around the corner.
Fulfilling promises
Schmidly's cost-saving measures so far have saved an estimated $500,000 each month since they began in November, he said. But those savings might not be used to pay salaries for the 10 faculty positions he has promised.
"The first thing the $500,000 a month has to do is cover the reduction in (legislative) appropriations," he said.
Schmidly said that if he is able to lower overall administrative expenditures by his 15 percent goal, and there are no further reductions in state appropriations, all the savings could go to hiring faculty.
"But if every month the state general fund declines and the state says you have to keep reducing your budget . I have to balance the budget," he said. "In an ideal world, what I would do is the state would say 'Here's your money,' and I would say, 'We're going to reduce our administrative spending over the next three years by 15 percent and we're going to convert that money into faculty.' That's what I hope I can do. But all of that is dependent upon the economy stabilizing."
Mulcahy said the federal stimulus package scheduled to come out of Washington next week is likely to help higher education and that the administration should have a more positive outlook in order to reduce fear among employees.
"The money will be coming: $200 million is earmarked for education specifically for New Mexico, so that means that there's no need to cut the budget this year," he said.
But Schmidly said he doubts the stimulus package will save UNM's budget.
"I think that stimulus package is not intended to correct budget woes," he said.
Schmidly said he was in Washington last week and that it's unlikely the University will get much help from there.
"It was made very plain to me that this (stimulus package) was primarily for shovel-ready projects to create jobs," he said. "Now, it could help education build things, but you have to realize that the governor and people like that have to devote the money to our projects, and we have no indication they'll do that."
